Toyota’s Organizational Culture: An Analysis

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A 2014 Toyota Corolla Ascent. Toyota Motor Corporation’s organizational culture (company culture) supports innovation, high quality, and organizational learning in automotive business. (Photo: Public Domain)

Toyota Motor Corporation’s organizational culture defines the responses of employees to challenges that the company faces in the market. As a global leader in the automobile market, Toyota uses its work culture to maximize human resource capabilities in innovation. The company benefits from its organizational culture in terms of motivating workers to adopt effective problem-solving behaviors. The characteristics of the organizational culture indicate a careful approach in facilitating organizational learning in the automotive business. As Toyota’s organizational structure (company structure) evolves, so does its business culture. The automaker’s company culture highlights the importance of developing an appropriate workplace culture to support global business success.

Toyota’s culture effectively supports endeavors in innovation and continuous improvement. An understanding of this business culture is beneficial to identifying beliefs and principles that contribute to the strength of the company and its brands against competitors, like Tesla, Ford, Nissan, BMW, and General Motors. Despite the tough rivalry noted in the Five Forces analysis of Toyota, the company maintains competitive human resources with the help of its organizational culture.

Features of Toyota’s Organizational Culture

Toyota’s organizational culture adapts to international business needs, such as legal requirements and emerging concerns in the market. In the past, the automaker’s business culture emphasized a sense of hierarchy and secrecy, which translated to employees’ perception that all decisions must come from the headquarters in Japan. Today, the characteristics of Toyota’s organizational culture are as follows, arranged according to significance:

  1. Teamwork
  2. Continuous improvement through learning
  3. Quality
  4. Secrecy

Teamwork. Toyota uses teams in most of its business areas. One of the company’s principles is that the constructive collaboration of teamwork leads to greater capabilities and success in the automotive industry. This part of the work culture emphasizes the involvement of employees in their respective teams. To ensure that teamwork is properly integrated in the organizational culture, every Toyota employee goes through a teambuilding training program. Through this emphasis on teamwork, the company culture aligns with job design and human resource development in Toyota’s operations management.

Continuous Improvement through Learning. Toyota’s organizational culture facilitates the development of the firm as a learning organization. A learning organization utilizes information gained through the activities of individual workers to develop policies and programs for better results. The company’s business culture highlights learning as a way of developing solutions to problems, such as problems in vehicle manufacturing, people’s mobility, and the transportation sector. In this way, improvements in business processes and outputs fulfill Toyota’s vision statement and mission statement with the support of this organizational culture.

Quality. Quality is at the heart of Toyota’s organizational culture. The success of the company is typically attributed to its ability to provide high-quality automobiles. To effectively integrate quality in its work culture, the firm uses the principles of The Toyota Way, which emphasizes quality in solving problems. These principles define the business management approaches used in the automotive company. This quality factor in the business culture translates to quality in human resource management, worker behaviors, and organizational outputs, such as cars. Thus, the competitive advantages noted in the SWOT analysis of Toyota are partly dependent on this quality-focused characteristic of the corporate culture.

Secrecy. Toyota’s organizational culture has a considerable degree of secrecy. However, the level of secrecy has declined through the years, especially after the automaker’s reorganization in 2013. In the old company culture, information about problems encountered in the workplace must go through the firm’s headquarters in Japan. Today, the company’s organizational culture does not emphasize secrecy as much. For example, many of the problems encountered in manufacturing plants in the U.S. are now disseminated, analyzed, and solved within the North America business unit of Toyota.

Key Points on Toyota’s Culture

The characteristics of Toyota’s organizational culture enable the business to continue growing. The company’s innovation capabilities are based on continuous improvement through learning. Quality improvement and problem-solving effectiveness in the automotive business are achieved through the activities of work teams and individual employees. These cultural traits ensure human resource support for strategies addressing external factors linked to the opportunities and threats described in the PESTLE/PESTEL analysis of Toyota. However, secrecy in Toyota’s business culture presents drawbacks because it reduces organizational flexibility in rapid problem-solving endeavors.