2. Abstract -
Toyota Case
• Companies throughout the world are engaging
in ‘lean’ programs for manufacturing, product
development, office work, and even the
enterprise following Toyota as a model.
• The goal is to eliminate waste. Generally
speaking these programs have had success at
driving impressive dollar savings, but we
believe the results are still far below what is
possible and generally not sustainable.
• The problem is a fundamental
misunderstanding of what has made Toyota so
successful.
• Keywords:
• lean management; human resource
development; culture change.
3. Introducti
on
• Toyota Motor Corporation is a Japanese multinational
automotive manufacturer headquartered in
Toyota, Aichi, Japan. It was founded by Kiichiro Toyoda
and incorporated on August 28, 1937
• From the founding of Toyoda Loom Works in the
1920s to the creation of Toyota Motor Company in
the 1940s, its leaders believed that the key to
success was investment in its people (Liker, 2004).
• The Toyota culture has evolved since the company’s
founding and is the core competence of the
company.
• The Toyota Way is first and foremost about culture –
the way people think and behave deeply rooted in
the company philosophy and its principles.
4.
5. The HR Processes That Contributed to Toyota’s Downfall
REWARDS AND RECOGNITION — THE PURPOSE OF
ANY CORPORATE REWARD PROCESS IS TO
ENCOURAGE AND INCENT THE RIGHT BEHAVIORS AND
TO DISCOURAGE THE NEGATIVE ONES. IT’S
IMPORTANT FOR THE REWARD PROCESS TO INCENT
THE GATHERING OF INFORMATION ABOUT
PROBLEMS.
TRAINING — THE PURPOSE OF TRAINING IS TO MAKE
SURE THAT EMPLOYEES HAVE THE RIGHT SKILLS AND
CAPABILITIES TO IDENTIFY AND HANDLE ALL
SITUATIONS THEY MAY ENCOUNTER. TOYOTA IS
FAMOUS FOR ITS FOUR-STEP CYCLE —
PLAN/DO/CHECK/ACT — BUT CLEARLY THE TRAINING
AMONG MANAGERS NOW NEEDS TO FOCUS MORE
ON THE LAST TWO.
HIRING — THE PURPOSE OF GREAT HIRING IS TO
BRING ON BOARD TOP-PERFORMING INDIVIDUALS
WITH THE HIGH LEVEL OF SKILLS AND CAPABILITIES
THAT ARE REQUIRED TO HANDLE THE MOST
COMPLEX PROBLEMS.
6. Restructuring HR as a result of a critical problem
• Understanding the problem
As the first wholly owned Toyota assembly plant in the USA, TMMK was looked at as an important source
of learning for future overseas plants. In 1997, the plant had its first real HR crisis that revealed serious
weaknesses in the system and a lack of awareness by management about these weaknesses.
• Back to the basics – values
For the improvement activity of following the values, more management and member focus groups
were held, the values of the company were specifically defined, and then ideas were generated on how to
better hold everyone accountable for following them.
• The HR re-organisation
At the same time the values activities were going on, HR was also looking at itself in the mirror to
determine what needed to be done. In proper Toyota fashion, there was an honest look at the situation as
compared to the standard.
7. Trust and
improvement culture
make it all work
• There are many distinctive characteristics
of Toyota culture but one at the centre is
that Toyota people trust each other to an
unusual degree for a large corporation.
Moreover, it is assumed that everyone is
responsible for continuous improvement
via Plan-Do-Check-Act (PDCA). PDCA has
gone beyond a tool and become integral
to the culture–probably one of the most
difficult things to teach in the USA.
8. TRAINING
AND
DEVELOPMEN
T AT TOYOTA
AND ITS
INEFFECTIVE
NESS
• As identified above that the whole purpose of
training is to ensure that the employees have right
set of skills and the capabilities that match the job
requirement and that help them to handle all
situations they may encounter. Toyota has been
following a four step cycle i.e. plan, do, check and
act (PDCA) (Lodgaard & Aasland, 2011). It is
considered to be a continuous improvement tool
that evolves around the testing of training
programs, detailed analysis of its outcomes and its
integration into the system
9. Recommendations aimed at
improving HRM Issues at Toyota
Motors
• The above are part of HRM issues that Toyota Motor Company
was faced with. To avoid such a problem, a number of scholars
believe that hard model or version of human resource
management should be adopted. The hard model or theory is
also known as theory X and it is based on the notion that tight
strategic controls should be designed by the HR department
and put into practice so as to ensure that organizations do not
have to deal with a lot of HR issues that are lately on the
increase (Guest, Michie, Conway and Sheeman, 2003, p. 293).
However, the above identified problems can be resolved
through a number of ways hereby outlined. HRM Issues Facing
Toyota Sample Paper
10. Final
Thoughts
• Toyota’s problems are not the result of a single individual making
an isolated mistake, but rather due to a companywide series of
mistakes that are all related to each other. So many corporate
functions were involved, including customer service, government
relations, vendor management and PR, that one cannot help but
attribute the crash of Toyota to systemic management failure.
• Unfortunately, in this case, the famous Japanese saying is true.
“The nail that stands out” was not encouraged to be different,
but instead it was “pounded down” to conform.
• The key lesson that others should learn from Toyota’s mistakes is
that HR needs to periodically test or audit each of the processes
that could allow this type of billion-dollar error to occur.
• Note: I invite comments about what other human resource
factors may have contributed to Toyota’s downfall.
