The Toyota corporate strategy is one of the most studied models in the business environment; this is the fourth (that I can remember) time I’ve studied Just In Time and the Toyota Production System in a business class. Before reading the articles, I knew Toyota was extremely efficient at producing quality products with a minimum of mistakes or material waste. Having read the article on Kiichiro Toyoda, I see his emphasis on genchi genbutsu (a trial and error method of finding the best process by being hands on) inspired Toyota’s efficiency. As Kiichiro was very hands on and detail oriented, any gains in efficiency would markedly improve his work time.
While reading the articles, the leader-member exchange, normative decision, Fiedler’s contingency, and the Path-Goal theories and models popped into my head. Looking through my classmates posts, it seems there is a wide variety of theories discussed, but a heavy emphasis on the models I listed above. There is one more model I see aspects of at work at Toyota and will thus discuss, the Substitutes for Leadership (SLM) model.
Though it seems counter-intuitive given the articles’ notes on the Toyota strategy and culture, there is evidence of follower, task, and organizational characteristics which act as leadership substitutes and neutralizers. From the pro-Toyota viewpoint, the use of family members as leaders shows a very rigid structure which discourages the average employee from seeking a leadership position at the top of the company. Otherwise, the family leadership is a betrayal of the substitutes for leadership model, as the family members breed a cult of personality that revolves the company around their way of thinking. As the Liker article [pg. 4] states:
With this system of beliefs and values, it would be unimaginable to hand over the company to a son, cousin, or nephew who did not get his hands dirty and truly love the automobile business. The company values shaped the development and selection of each generation of leaders.
This focus on the top leadership’s style, does neutralize the power of leaders below them, as they are expected to emulate the family-leaders style and belief, rather than being encouraged to critically analyze their leadership situation and act accordingly. This organizational rigidity, as evidenced by the family leadership at the top, and their commitment to their beliefs, as well as the seniority based ranking system discussed in The Darker Side of Lean article, neutralizes the need and effect of a structuring leader (at all levels one below the CEO).
We also see standardization and formalization acting as a substitute for structuring leadership. The essence of the Toyota Production System is to encourage efficiency in production time and resource use, as well as conformity in product quality. The TPS is set up in such a way to remove any need for creative analysis from the factory workers. The factory workers know how to use the equipment to make the necessary parts and need very little guidance on manufacturing processes. The engineers likewise are affected by standardization. The attempted perception of Toyota to the outside world is that they are leading innovators, and I too assumed this viewpoint before reading Darius’ personal experiences. Toyota has exemplified creativity in their Toyota Production System and Just In Time methods; however, in day to day engineering, creativity is substituted for by proven designs. Managers constantly denounced ideas engineers had and instead would focus on using existing designs which had proven successful at other companies.
The layout of the office discussed by Darius Mehri also points to neutralizing effects on leadership consideration and structure. For one, the way the desks are set up, with the managers on the outside and the followers on the inside points to a lack of respect for privacy, and is constantly used by the managers to humiliate the followers on the inside. It also eliminates the need for the managers to institute formal structures on who outranks who, because you can simply see where they sit to know how much power and respect they command.
In the pro-Toyota viewpoint, we see an emphasis on the Japanese team mentality being a big part of the TPS and a leading reason for its success. In the anti-Toyota viewpoint, Darius states that the team mentality is merely a perception, and in reality there are no teams and every individual works on their own work. In the pro-Toyota viewpoint, team cohesiveness acts as a replacement for both consideration and structuring needs from a leader. By giving employees kaizen (a participative say in decision making), Toyota eliminates the need for managers to dictate how a team should operate and eliminates the need for managers to actively engage employees, as they are expected to add their opinions. The reality, according to Mr. Mehri, is that kaizen is simply not used by leaders and that teams do not exist. The SLM structure is awkward to apply here, as the appearance of a cohesive team, indicates a substitute for leadership, but the reality shows a severe need for leaders who will actually work to improve worker safety, and ensure good people are promoted.
It seems there is a trend, where the pro-Toyota viewpoint and the tatemae encourage a structure where leadership is substituted by a cohesive team, standardization, professionalism (quality control and belief in the Toyota system) and direct feedback from a task (the getting your hands dirty approach). However, the honne and negative view of the Toyota system show that leadership is neutralized by organizational rigidity (seniority and the informal ranking of all employees), physical distance between leaders and followers, a leader’s lack of power (to encourage followers to act creatively, as they must have hard data to institute changes), and lack of value for goals (seen in the way safety is touted as a priority but never truly focused on).
Although there is clear leadership in place at Toyota, as seen by the family leaders and their beliefs, it’s also quite interesting to see how the rest of the organization falls into a substituting or neutralizing pattern depending on if you are viewing the tatemae (perception to outsiders) or the honne (the reality of the situation). We can even see the Substitutes for Leadership model in place in how employees discuss their work; while on company grounds, they maintain a positive attitude, but once they are engaging in their personal lives (at drinking parties), they are much more apt to criticize the strategy and philosophy at Toyota.
Mehri, Darius. The Darker Side of Lean: An Insider’s Perspective on the Realities of the Toyota Production System. The Academy of Management Perspectives. 20.2 (2006) : 21 – 42.
The assignment was to:
…compare these readings using one of the contingency theories discussed in the textbookÂ’’s Chapters 5 and 6. Choose a theory and try to apply it to each perspective on Toyota, and then in your analysis see what that application reveals about the two points of view on Toyota, and why they are so different.