Toyota Production Systems: The ‘Toyota Way’ and Labour–Management Relations

Abstract

The Toyota production system (TPS) is spreading worldwide. This paper looks into the TPS and the associated transfer of the so-called ‘Toyota Way’ from a perspective of current and traditional human resource management (HRM) and labour–management relations within Toyota in Japan. Toyota considers that the foundation for competitive strength is ensuring that every employee understands and accepts the Toyota Way, and that it is necessary to expend much effort towards this end. For this purpose, Toyota has established a comprehensive in-house system of education and training, covering all aspects of labour–management relations and HRM. However, the Toyota Way's own characteristics exacerbate difficulties of transferral to US and European companies. By evaluating Toyota's motivational approach to management and training, and its labour–management relations, this paper elucidates the ‘Toyota Way’ underpinning the TPS. The three crucial aspects to Toyota's management are: (i) financial stimulation; (ii) management of personnel requirements; and (iii) labour management on the basis of behavioural science. A further important aspect of Toyota managerial development is the ad hoc training of key technical personnel. Toyota's ‘mutual trust and mutual responsibility’ approach to labour–management relations are also discussed.