Because I drive a Toyota (a cute blue Corolla, if you must know), I followed the Toyota safety scandal pretty closely last year. I love my little car, and I was concerned that at some point I would need to trade it in or even change to a different company. Thankfully, my model didn’t have any recalls and it seemed like Toyota fixed their issues – everyone moved on.
But a report that came out last week indicated otherwise. According to a panel Toyota asked to evaluate the company’s actions after the safety crisis, several elements need to be reassessed, including ways decisions are made, its overall culture, and leadership models within the company.
The idea of changing Toyota’s leadership model struck me as quite the challenge. This is, after all, a nearly 80-year-old company that recently overtook GM as the world’s largest automaker. It seems as though they have a pretty successful operation on inside their headquarters. But Toyota’s “top-down management style,” in part, led to the 2010 acceleration scare.
The panel suggests the company eliminate the “silos” between its North American executives, who all head different divisions of the company, by appointing one person in charge of operations. Another suggestion included giving “regional managers more autonomy.” Toyota’s hierarchical leadership model apparently hinders anyone but senior leadership to feel comfortable speaking up – and even that seems like it is against company culture. This seems contradictory to an intra-company philosophy known as the Toyota Production System, which encourages workers to speak up and even stop production on the manufacturing floor when they notice something isn’t right.
However, as Bauer and Erdogan (2009) describe in their case study of Toyota, “it is not uncommon that individuals feel reluctant to pass bad news up the chain within a family company… No Toyota executive in the United States is authorized to issue a recall” (p. 346). Obviously, the panel was correct in its suggestion of giving more authority to North American executives and regional managers.
But while focusing on removing silos will help remove communication barriers between the North American operations, I wonder how much this would work for Toyota. Without having read the entire 60-page report myself, I’m not sure if panel members took Toyota’s culture into account when considering its existing leadership model.
Culture is something that can’t be discounted. Toyota is headquartered in Japan, where characteristics such as masculinity, collectivism, and low uncertainty avoidance are regarded highly. Indeed, Toyota’s board of directors “is composed of 29 Japanese men, all of whom are Toyota insiders” (Bauer & Erdogan, p. 346, 2009). Highly favoring masculinity means also highly favoring competitiveness, achievement, and making money above most other elements, which could have factored into someone not speaking up about a safety issue. A collectivist culture tends to value the group over themselves as individuals, and this extreme loyalty to Toyota may also have led to a reluctance to bring up any issues that would cause unfavorable views of the company. And low uncertainty avoidance, specifically in Japan, can mean that people try extremely hard to keep their jobs. Revealing a problem in the manufacturing of automobiles may be looked down upon by the Toyota culture. Bauer and Erdogan point out that Toyota’s flow of information is one-way – from managers to executives in Japan, where they make the decisions: “Authority is not generally delegated within the company; all U.S. executives are assigned a Japanese boss to mentor them” (p. 346).
And how does that mix with its North American counterparts? Is the culture the same in both countries (probably not), or is that part of the problem? I haven’t researched Toyota in-depth before, so I’m not sure. But I’d be interested in your thoughts. What do you think Toyota could have done differently in the safety crisis? Do you think the company should reassess its leadership model or focus on another element the panel suggested?
Traci Finch
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