Japanese management techniques at Toyota
After World War II, Japan gained quick recovery from influences of war and developed its economy with unprecedented speed. Its cultural patterns and managerial models have gradually been popular around the world due to its successful development in the post-World War II. They are labeled as the Japanese management style or Japanese management techniques. In this essay, we will discuss Japanese management techniques through study the case of Toyota. It falls into three parts. In the first part, it will introduce the general background of Japanese management techniques as well as giving a simply analysis on it. On the basis of that, it will continue to further study Toyota. After clear introduction of Toyota, this essay will analyze how Toyota carries out management techniques in means of Toyota Production System and other management techniques. Lastly, it will criticize Japanese management techniques and show some recommendations. 154
1 Japanese management techniques
1.1 General Background of Japanese management techniques
Japanese management techniques came to be known after World War II, which consist of Japanese cultural patterns, managerial models and some traditional conventions. In spite of the fact that it was realized in Western countries during the postwar period, Japanese management techniques have developed for a long years. Their history can go back to the latter part of 19th century, when a modernization revolution began in the 1868 Meiji restoration with the regime of new monarchy.
Based on its historical traditions, traditional Japanese management techniques mainly consist of in-house training of managers, consensual and decentralized decision-making, extensive use of quality control methods, carefully codified work standards, seniority-based compensation, to mention a few. They helped boost Japanese economy to survive from the oil crisis in the1970th. However, it also encountered bad damages in the heated world competition. They have to make some changes. For example, a Western style regime of merit-based pay has gradually taken place of seniority-based raises. Now it was believed that Japanese management was moving to new directions, some even say it will reach the edge of death. But many believe that through adoption Western style and blend with former traditions and practices it will face a new development and success. 203
1.2 Analysis on Japanese management techniques
Japanese management techniques are mainly composed of six aspects, that is, in-house training of managers, consensual and decentralized decision-making, extensive use of quality control methods, carefully codified work standards, emphasis on creating harmonious relations among workers, lifetime employment and seniority-based compensation. However, the above contents are not the entire Japanese management techniques, because they are always changing ceaselessly and inputting those new and innovative methods and ideas.
Then we will be discussing characteristics of Japanese management techniques. Because that Japan is a country which owns deep-rooted sense of hierarchy, it can be shown from their management that promotion and compensation based on grades, not exactly in accordance with their performances. This kind of bonus system is tightly linked with another feature on management, that is, life-time employment. People in Japan tend to be willing to choose a job after graduation as their lifetime job. Most of them would like to stay with the company until retirement. The life-time system makes company and individual believe that a firm could develop long-term training for their recruits and gain profits from their investment in training. To some extent, these two systems are like fish toward water, which can’t survive well without one. So it results low job-hopping among youth, relatively a higher age and less changes especially among the top executives in Japan. Compared to the United States and Europe, for instance, relatively few company presidents are under age 50 (Gibney, 1981).
The third characteristics are about their emphasis on special feeling for quality. They paid much attention on controlling the quality, from production process to the arrival at customers. Every staff, from floor workers to top management, should have the quality criterion in their mind and try their best to do according them. In the meantime, they need to have class on quality control continuously. In Japan there have a quality circle which consist of ten workers who focus on concrete operations in the course of production and analyze and evaluate quality issues through tables and graphs. Other characteristics such as hatred for waste, flexibility during management, harmonious relations, employee involvement and so forth, are also obvious in Japanese management and captured much appraises around the world. We can say that Japanese management helped its economy acquired great development to become the world’s second largest, just behind U.S.
2 Japanese management techniques in Toyota
2.1 Brief background of Toyota
Toyota was Japan’s largest automobile company and the world’s top ten automotive companies. It was founded by Kiichiro in 1933. Firstly it mainly produced textile mechinecry until the founder Kiichiro began to set up atutomonile division in 1933, which open up the history of manufacturing cars. In 1935, the Toyota car protype AI made successfully, the second year Automotive Industry Corporatio was formally established. But in the whole 30’s and 40’s period it developed slowly until after the World War II when beagn to speed up the pace of development.
Through introduction of European and American technology and under the guidance of American aotomotive technology specialists and management experts, it soon mastered advanced production and management techniques. On the basis of that, it combined with the characteristics of Japanese nation and created the famous Toyota Production System, continually improve and perfect, which greatly helped to improve effenciency and production. In the last 60’s of last century, its products was largerly poured into the North American market. the 70’s era was the golden period of rapid development, after 80’s it began its comprehensive international strategy to the world. In 2008 it reached the top in Fortune. Owning about 285,977 eployees, it makes revenue up to 230,201 million dollarls. Early cars like Toyota, Crown, Corolla, Optical Crown renowned for a while, rencently, Cressida, Lexus luxury cars are also famous.
2.2 How Toyota carries out management techniques
In Toyota’s long developing course, it gradually formed into its own special management system, among them, Toyota Prodction System is the best ell-know one and became the model for worldwide manufacturing. Actually it was based on Japanese management techniques, however, it gained further development and new directions. Toyota Prodction System enjoyed heavy popularity all around the world. Now let’s know more about the details. “Lean manufacturing “, just-in-time, Jidoka, Shojinka, Soikufu all belongs to TPS.
Lean manufacturing is a process used for measuring and decreasing inventory and streamlining production. It mostly a Westernized version of JIT, and Japanese companies did some continuous variations. Based on knowledge, lean manufacturing is aimed to use as much as less resources, such as inventory, workers, fund, rather than by mass-production systems to increase output, which not only waste resources but also result in pressure for productions. Through changing systematic structure, personnel organization, operating mode and market demand and so forth, lean manufacturing can make production system adapt to variations of customers in a quick way. In the meantime, everything in the production course that is useless and superfluous will be leaned, lastly reaching the best consequence, for example, to meet market demand. Generally speaking, it carries out well the Japanese management techniques-extensive use of quality control methods and emphasis on customers, because the purpose of lean manufacturing are to meet customers’ demand and increase quality. Lean manufacturing could be seen from every circle of production, from plant organization to supply link, from product design and research to variety and bulk of product.
Just-in-time has often been realized as a integral management system in order to reduce waste, maximize efficiency as well as securing more market share and competitive advantages. It needs to incorporate short setup, efficient and effective quality controls to maximize the efficiency of human and machine labor and minimize backups. Preparing in very short time, JIT is required to response changes of market and customer quickly. From its content and goals, we can easily see that it is similar to Japanese management which both are paying much attention to quality control and reducing waste. This kind of management method is already spreading to the whole nation and throughout the world, and also accepted and adopted by many companies. In all the JIT production means, kanban management is one of the most important one, which means that during the production circles, after use of spare part in the former procession, employees take off the card attached to the box and send back to next procession in concrete time. It manifests on-site management and promises standard operation of production line.
Jidoka means to instilling human judgment into the machines to meet the needs of quality assurance. Every mistake and problem should be solved immediately, never let them go to next procession. Solving problem is not one employee’s duty, in stead; it should be done by every worker in the same line. Shojinka is trying to prevent of idle time. The two strategies which ensure efficiency of HR, employs lies in two parts, one is the Multi process holding and the other is the multi skilled workers.
Other management techniques of Toyota include human resource management, marketing models, operational improvement models, product quality management models and so forth. Although they are not famous as TPS, they made great contributions to the success of Toyota. We can easily know that Toyota carries out well Japanese management, but also having its own improvement.
3 Criticize Japanese management techniques and recommendation
Japanese management techniques have ever been very popular in the world and adopted by many Western countries, such as America. They made huge contribution to Japanese miracle economy. Their system about lifetime employment and seniority-based compensation could reduce employee turnover at utmost. So it is known that employee turnover rate is very low in Japan. This is a great advantage for companies, because it reduces much expenditure for recruiting new staff and training fee. And it is also not benefit for the long-term development for companies, because it means brain drain. They still have other advantages such as emphasis on quality and harmonious relations.
However, they also have their disadvantages. First, just-in-time system can reduce costs and response customer quickly, but in some circumstances, setup reduction can increase inventory and cost. According to Willard I. Zangwill, these contradictions may lead to a new and more powerful production theory that resolves these contradictions (Zangwill, 15). Second, their bonus system, seniority-based compensation, couldn’t at utmost stimulate and increase employees’ motivation compared with Western countries’ system based on their performance and ability, nothing with age and length of staying in a company.
Third, their success resulted a little proud and so also lose, which is from perspective of Miller. “The fabled Icarus of Greek mythology is said to have flown so high, so close to the sun, that his artificial wax wings melted and he plunged to his death in the Aegean Sea. The power of Icarus’s wings gave rise to the abandon that so doomed him. The paradox, of course, is that his greatest asset led to his demise. And that same paradox applies to many outstanding companies: their victories and their strengths so often seduce them into the excesses that cause their downfall. Success leads to specialization and exaggeration, to confidence and complacency, to dogma and ritual.” (Miller, 1992). In today’s competitive situation, each company and country is now deeply thinking their methods to increase market share and make profits. Although Japanese management has been proved very productive and feasible in its long history, but things are changing everyday, they also need find a new way and direction to make it more competitive. But some of them are still immersed in ever glorious history.
In my opinion, Japanese need to wake up from their success management and try their best to learn from those advanced management techniques to perfect theirs. They should put creative ideas in their mind all the time.
Toyota has well inherited and developed Japanese management techniques through continuous creation and successive improvement and modifications of their management system. The entire Japanese management techniques, although most of them are still available and benefit nowadays, likewise they need to change right now to meet requirements of competitive society and more personalized customers. Some of the good and very useful features such emphasis on quality could be reserved. Many scholars believed Japanese management techniques will be popular around the world someday.