Toyota's corporate structure is extremely distinctive. Toyota has a strict and flexible system. The hierarchical structure of Toyota makes its rigidity clear. Being a family-owned company, Toyota has a chain of command that is based on relationships within the family. 29 Japanese men who work inside Toyota make up the board of directors for the corporation. The corporation also has a strong concentration of power, giving the impression that the top executives make all the decisions. Toyota's usage of the Toyota Production System (TPS) throughout all of its manufacturing processes is another aspect of the corporation that adds to its rigidity. TPS operates under the Just-in-Time (JIT) production tenets. JIT advocates for zero inventory and stockless production. Toyota states on its global website that it has created close relationships with its suppliers and arrange for more frequent deliveries of supplies in small quantities. The objective of JIT is to purchase goods so that delivery is made immediately before their use. Under this system, there is no room for slack resources, and efficiency on the part of employees is emphasized. This causes a semblance of rigidity as employees are on a constant strive for efficiency that could compromise quality at times.
On the other side of the coin is flexibility which is promoted by the TPS system as well. Because of the lean production advanced by TPS, assembly line and other front line employees at Toyota are empowered to pull a cord and stop the manufacturing line when they see a problem. This promotes flexibility in the making of decisions around manufacturing and production. Besides, the JIT production ensures customer demands are met as they come. Toyota informs on its automobile museum that vehicles are manufactured as orders come through, which allows a great deal of customization and client-specific tailoring. Even though these two sides of the TPS system may be considered contradictory, they actually support each other leading to a very seamless business operation at Toyota. Various authors have observed that the very flexibility of Toyota as an organization is in its rigidity. Toyota’s rigidity of operations is what makes flexibility possible in that the company’s operations are regarded as a continuous series of a controlled experiments. Whenever the company defines a specification, it is establishing a hypothesis that is to be tested. The testing of this hypothesis is through action that is actual production. Rather than imposing this scientific method of hypothesis testing on employees, it is engrained in them. With the TPS system in play, employees at all levels in Toyota operate in a culture where they constantly grapple with challenges and problems and have to solve them on their feet. As they generate solutions to these challenges and come up with fresh ideas, they internalize the scientific method of operation resulting in overall flexibility. In the long-run all activities, connections, and production paths at Toyota are designed according to a strict set of rules of experimentation and hypotheses testing. These rules have built-in tests in which problems are signaled as soon as they occur, and solved by employees regardless of their level in the organization. Such continual and real-time responses to problems make a system that is seemingly as rigid as the TPS to be very flexible and adaptive to changing circumstances.
For organizations to be as adaptive as Toyota, they ought to empower their entire workforce to be wary of changing circumstances at any given time and respond accordingly. The responses to these changes may take varied forms such as changing the mode of operation or consulting with the superiors. At the core of adaptability in any company is the ability to read signals of change and duly act on them (Reeves & Deimler, 2011). This is especially important in markets that are faced with globalization, rapidly changing technologies, and shrinking markets. Just like Toyota, organizations should adopt experimentation as opposed to the previously favored pilot studies. Companies should not shy away from experimenting with business models, new products and services, strategies, and even markets. In an interconnected world, there also is the need to manage systems that are complex and with multiple stakeholders. Lastly, organizations need to recognize that their greatest assets are human resources, and seek to empower them. The same way Toyota has empowered employees at all levels in the organization through TPS, companies should only adopt systems that promote learning and innovation and thereby empower employees. An empowered employee is highly likely to pick up on a change in the environment and appropriately inspire action towards adaptability unlike a less empowered employee.
The March 2011 Tsunami in Japan was a major hurdle to the management and people at Toyota. The Tsunami forced Toyota to stop production at its subsidiary plants that produce parts and vehicles. There were four plants that were listed as affected by the Tsunami including the Hokkaido, Tohoku, Miyagi, and the Kanto Auto Works Iwate Plant (Norio et al. 2011). In addition, there were severe disruptions in the company’s supply chain, ports, damaged facilities, and stocks. The greatest highlight of this disaster, however, is how Toyota handled this unexpected natural disaster. First, the company took on the creation of a robust supply chain that is less likely to be affected in the event of such a disaster in the future. It is said that this supply chain that was created is able to resume after only two weeks of a similar disaster occurring. The specifics of this supply chain include asking players at the lower ends of the chain to keep enough inventory, using standard parts in the vehicles as other Japan automakers to allow outsourcing, and developing technology that provides more options for materials and parts. Immediate measures that were taken by Toyota after the disaster included provision of free labor to its suppliers, use of less electricity, and reduction of the number of parts bottlenecks.
In conclusion, Toyota is successful in various concepts of organization behavior. The company uses a highly praised TPS system that enables rigidity and flexibility at the same time. The people and Toyota have been empowered in decision-making and problem-solving, making them significant contributors to adaptability in the company. The company is also very adept in handling unexpected situations as witnessed after the March 2011 Tsunami in Japan.
References
Norio, O., Ye, T., Kajitani, Y., Shi, P., & Tatano, H. (2011). The 2011 Eastern Japan Great Earthquake Disaster: Overview and Comments. International Journal of Disaster Risk Science, 2(1). 34-42.
Reeves, M., & Deimler, M. (2011). Adaptability: The New Competitive Advantage. Harvard Business Review. Retrieved from https://hbr.org/2011/07/adaptability-the-new-competitive-advantage.
Toyota Global Site (2017). Production System. Retrieved from www.toyota-global.com.
Toyota Motor Corporation (2017). Toyota Automobile Museum. Retrieved from http://www.toyota.co.jp/Museum/english/
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