Abstract
During the past six decades, the Toyota Motor Company established a ‘lean’ production and management system (the Toyota Way), which has become an iconic template for a high performing and learning organization. The massive recall crisis of 2009/2010 distorted Toyota’s image of a role model for a lean organization heavily. This case study analyzes retrospectively how the carmaker deviated from their original organizational configuration that was distinctive for its lean management system. We illustrate how managerial decisions geared towards extensive growth and globalization distorted complementarities among central elements of the Toyota Way, and ultimately caused organizational misfit. Whereas most of the literature on complementarities and organizational fit has emphasized processes of adaptation and evolution toward internal fit or misfit that are triggered by exogenous environmental changes, our case study of Toyota shows that external misfit can also be the unintended consequence of deliberate changes in the firm’s system of interdependent choices.
Highlights
In 2009 Toyota found itself in the deepest and most dramatic crisis of its history that culminated in a recall of over 9 million cars worldwide, including 5,3 million cars in its most important North American market, due to burgeoning quality problems that involved most if its product line-up
This case study analyzes retrospectively how the carmaker deviated from their original organizational configuration that was distinctive for its lean management system
Whereas most of the literature on complementarities and organizational fit has emphasized processes of adaptation and evolution toward internal fit or misfit that are triggered by exogenous environmental changes, our case study of Toyota shows that external misfit can be the unintended consequence of deliberate changes in the firm’s system of interdependent choices
Summary
In 2009 Toyota found itself in the deepest and most dramatic crisis of its history that culminated in a recall of over 9 million cars worldwide, including 5,3 million cars in its most important North American market, due to burgeoning quality problems that involved most if its product line-up. Our analysis will focus on the most central principles of lean production, i.e., built in quality, and trace internal complementarities among organizational design choices made in manufacturing, supplier management, and human resources.
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