Extreme Toyota

HIROTAKA TAKEUCHI, EMI OSONO, and NORIHIKO SHIMIZU are business school graduates from the University of California, Berkeley, The George Washington University, and Stanford University, respectively. They are professors at one of Japan's top business schools, Hitotsubashi University, Graduate School of International Corporate Strategy (www.ics.hit-u.ac.jp). Takeuchi works closely with Professor Michael E. Porter of Harvard University, with whom he coauthored Can Japan Compete? (2000). All three authors are also frequent speakers at conferences and seminars around the world.

• Preface xiCHAPTER 1 Extreme Toyota: An Organization Powered by Creative Contradictions 1An Amazing Track Record 1The Hard Side of Toyota 3The Powerful and Mysterious Soft Side 3How Toyota Is Like a Failed, Stagnant Company 4Management Orchestrated Contradictions,Opposites, and Paradoxes 8Embracing Contradictions as a Way of Life 19Conclusion 20CHAPTER 2 Six Opposing Forces That Drive the Company’s Expansion—and Keep It from Breaking Apart 23Forces of Expansion 25Forces of Integration 30Six Forces Working Together 34Resource Base 35Six Forces in Action: Case of the Lexus 38Conclusion 42CHAPTER 3 The Force of Impossible Goals 43Meet Every Customer Need 45The Finest Cars, the Finest Dealers 51Bypassing Japan to Make a Global Car 57Conclusion 64CHAPTER 4 Eagerness  to Experiment 67Experimentation Hardware:The Eight-Step and A3 Processes 73Experimentation Software: Values 86Conclusion 92CHAPTER 5  Local Customization 95The Underdog Even at Home 98Customizing the IMV in Asia 99The Challenges and Benefits of Local Customization 100Customizing the Yaris for Europe 102Customizing the Scion for the United States Youth Segment 105Customizing the Tundra for the United States 115Disseminating Local Best Practices throughout the World 116Conclusion 118CHAPTER 6 The Founders’ Philosophies 121Tomorrow Will Be Better than Today 124Everybody Should Win 129Customer First, Dealers Second, and Manufacturer Last 135Genchi Genbutsu 139Conclusion 141CHAPTER 7 Toyota’s Nerve System—A Human Version of the World Wide Web 143Open and Lateral Dissemination of Know-How 146Freedom to Voice Contrary Opinions 149Frequent Face-to-Face Interaction 154Making Tacit Knowledge Explicit: The Toyota Way 2001 158Formal and Informal Support Mechanisms 161Conclusion 163CHAPTER 8 Up-and-In Human Resource Management 165Stable, Long-Term Employment 169Emphasis on Training,Training, and More Training 172Power in Teamwork 177Action Orientation 178Learning-Based Evaluation 180Conclusion 183CHAPTER 9 Toyota’s Resource Base 185Investing in Efficiency 187Cultivating Organizational Capability and People Required for Growth 191Making a Long-Term Commitment to People 198Conclusion 206CHAPTER 10 A Company Always in Danger 211Organizational Growth Pains 212Employee Complacency 214Cultural Rigidity 216Workforce Diversity 218Insular Approach to the Capital Markets 220Rise of New Competitors 221Conclusion 223CHAPTER 11 What Your Organization Can Learn from Toyota: Ten Powerful Contradictions 225Embrace Contradictions 229Conclusion 238Appendix A Selected Auto Industry Figures and Comparisons 241Chapter 1—Extreme Toyota 241Chapter 2—Six Forces 248Chapter 3—Impossible Goals 253Chapter 9—Resources 254Appendix B Literature Review 257Literature Review Methodology 258Notes 263References 287Index 297

"Heavily footed and studded with graphs and charts, this insider's view of one of the world's leading manufacturers is somewhat academic in tone yet has enough anecdotes to make it interesting." (Library Journal, May 15, 2008)