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Toyota Culture Case Study

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Toyota's dominance of global auto industry has often been attributed to the

culture of customer centricity supported by cultural values, systems and processes that

permeate the company (Liker, 2003). When cultural values are strong enough, the roles

of people, processes they need to manage and systems all combine to make challenging

organizational objectives attainable (Nelson, Quick, 2008). The case study illustrates

how successfully Toyota has been able to create a scalable, highly effective values-based

framework that standardizes processes, eliminating the potential for error. Toyota has

defined the intersection of people, processes and systems so they can continually be

improved over time, mitigating risk and variation in each area as well. The Toyota

Production System (TPS) is the framework that the company relies on for managing its

supply chain, coordination, planning and execution throughout its manufacturing

operations. Studies of the TPS indicate that the knowledge sharing is so pervasive

throughout this loosely coupled framework of suppliers, that it is typical to see

intelligence and knowledge transformed into competitive advantage over time (Dyer,

Nobeoka, 2000). Toyota has learned how to transform collaboration and shared task

ownership into several significant advantages, including reducing their time-to-market

and through cross-supplier collaboration (Liker, 2003). The chinks in the Toyota armor

are considered in the case to be from a lack of scalability and agility of the systems,

processes and roles that comprise the TPS. The most glaring example of this is an

analysis of competitor's cars to the component level where Toyota finds they are superior

only 50% of the time, or every other component. That's a mediocre position for the

company to be in, and one that requires strategic change to fix.

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QUESTION 1. Describe Toyota's culture from the perspective of espoused values and

ANSWER: The espoused values of the Toyota culture are captured in the fourteen

Toyota Way principles mentioned in the case (Nelson, Quick, 2008) and expanded upon

in a related book that explores each of the principles in detail (Liker, 2003). Analyzing

the fourteen principles, the five dominant themes of long-term philosophy, the right

process producing the right results, adding value to an organization by developing people,

and how continuously solving root problems drives organizational learning (Liker,

2003). These five foundations groups illustrate the espoused values of the company

and also are shown through analysis to be critical to the formation of the TPS (Liker,

2003) and the capacity of this network to create a knowledge sharing network over time

(Dyer, Nobeoka, 2000). The foundation of the fourteen principles is based on a strong

customer-centric culture throughout the company, which is what many consider to be its

greatest strength in terms of staying agile or able to transform itself over time (Hannagan,

2004). As with many organizations however, there is a dichotomy or disconnect between

espoused values and those that are enacted. The premise of the case study is based on

the dichotomy of espoused quality values and the actual results being attained by the

TPS and its suppliers (Liker, 2003). While there are many, many factors that contribute

to this disconnect, the majority of them are based on processes over time becoming less

relevant and useful to customers and the company itself (Davenport, 1992). Losing focus

on the customer and their needs can quickly lead to confusion and a myriad of competing

objectives and goals over time (Nelson, Quick, 2008). This is what happened to Toyota

on the quality and customer-focused dimensions of their business.

Student Network Resources Inc. ©2003-2009

QUESTION 2.Using the perspective of the functions of organizational culture, explain

ANSWER: The functions of organizational culture work together to enable greater

stability, behavioral control throughout an organization, and also provide a strong sense

of identity as well (Nelson, Quick, 2008). Often these three strategic aspects of culture

are also defined in terms of the level of cooperation, control, commitment, decision

making autonomy and quality, clarity of communication, and perceptual congruence

throughout an organization. When these factors are applied to The Toyota Way, it is

apparent that the functions of the organizational culture are very effective in galvanizing

the many manufacturing,



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