Toyota Motor Corporation - Losing 'The Toyota Way'?

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

Case Details:


Case Code : BSTR385 For delivery in electronic format: Rs. 600;
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Organizational Culture / Globalization
Case Length : 20 Pages
Period : 2005-2010
Pub Date : 2011
Teaching Note : Available
Organization : Toyota Motor Company
Industry : Automotive
Countries : Japan; Global


Japan-based Toyota Motor Corporation is one of the leading automobile companies in the world. In addition to adopting various lean manufacturing practices such as Just-in-time, Kaizen, Kanban and Jidoka, which came to be known as the Toyota Production System (TPS), to achieve high efficiency in vehicle production, Toyota cultivated a culture that posed employees with constant challenges enabling them to come out with fresh ideas. The mentorship, social networks, teamwork, training and simple communication ensured that the culture was spread uniformly all across the organization. Toyota had very few suppliers and they played an important part in maintaining high quality of Toyota's products.

Since the 1990s as Toyota's concentration was on growth and spreading its operations globally, TPS started to dilute. In order to reduce costs, Toyota introduced a program called Construction of Cost Competitiveness for the 21st Century, which intended to reduce the costs across the company's operations by 30% and also expand overseas production. Then a more aggressive version of the program was introduced to reduce production costs and time to market.


Understand the importance of organizational culture in the success of an organization.

Examine how the culture can become inflexible over a period of time and its impact on the organization.

Conduct strategic analysis of Toyota's markets and business.

Analyze the reasons for quality lapses at Toyota and the impact of such instances on its brand image.

Debate whether Toyota emphasized growth at the cost of quality.

Examine the way Toyota managed the crisis and debate whether the response by the company was adequate and timely or not.

Analyze the measures to be taken by Toyota to rebuild its brand image.


  Page No.
Crisis at Toyota 1
Background Note 2
Organizational Structure and Culture At Toyota 4
The Problems 5
Toyota Loses Its Way 7
And Quality Deteriorates 9
Managing Crisis 10
The Aftermath 11
Exhibits 12


Organizational culture, Toyota Way, Toyota Production System, Core competency, TQM, Quality Issues, JIT, Globalization, Automotive industry, Toyota

Crisis at Toyota - Next Page>>


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