Organizational Behavior In Toyota And General Motors

In the words of Robbins “OB is the study of what people do in an organization and how that behavior affects its performance.” Study the Organizational Behavior prevailing in Toyota & General motors.


Meaning of Organization Culture

In line with its belief that ‘People make the difference’, TCL focuses in nurturing employee potential through involvement, empowerment and continuous learning. The organization structure, which lays emphasis on delegation, has helped develop the company’s culture. The structure allows immense scope for continuous improvement; managers do not need to worry about day-to-day operations, and can thus better focus on breakthrough improvements. The delegation of responsibility to lower levels has also helped in developing a culture of initiative and risk taking. The organizational culture can be best described as one of empowerment, delegation and total employee empowerment (and hence, employee involvement). The company culture is such that individual as well as teams are recognized for their achievements. Teams are recognized on a quarterly basis based on their performance and some key measures.

Teams are also recognized for ‘Best Kaizens’. Individual growth is related to one’s performance in the team. Thus, team members can not shirk their responsibility. In addition, social loafing is not possible due to peer pressure. Another interesting aspect is that workers are known as associates and not workers.

This simple step helps inculcate a sense of belonging and loyalty towards the company.

Team play is an important characteristic of the culture and the organization strives hard to maintain and promote it. The team play is defined as the ability to submerge individual needs to the needs of the group, building on the strengths and complimenting the weaknesses of other Team Members to ensure group’s objectives are met. Every Team Member identifies himself/herself with the Team and feels proud to be part of the Team. There are a number of inter Team contests, Team Building exercises, constant interaction and counseling by Team Developer, Celebration for every small success. A Team can be in different stages of Team Play. Five levels of evolution have been defined and a Team’s level can be ascertained by observation in a particular period of time.

Organizational studies encompass the study of organizations from multiple viewpoints, methods, and levels of analysis. For instance, one textbook divides these multiple viewpoints into three perspectives: modern, symbolic, and postmodern. Another traditional distinction, present especially in American academia, is between the study of “micro” organizational behaviour – which refers to individual and group dynamics in an organizational setting – and “macro” strategic management and organizational theory which studies whole organizations and industries, how they adapt, and the strategies, structures and contingencies that guide them. To this distinction, some scholars have added an interest in “meso” scale structures – power, culture, and the networks of individuals and i.e. ronit units in organizations – and “field” level analysis which study how whole populations of organizations interact.

Whenever people interact in organizations, many factors come into play. Modern organizational studies attempt to understand and model these factors. Like all modernist social sciences, organizational studies seek to control, predict, and explain. There is some controversy over the ethics of controlling workers’ behavior, as well as the manner in which workers are treated (see Taylor’s scientific management approach compared to the human relations movement of the 1940s). As such, organizational behavior or OB (and its cousin, Industrial psychology) have at times been accused of being the scientific tool of the powerful. Those accusations notwithstanding, OB can play a major role in organizational development, enhancing organizational performance, as well as individual and group performance / satisfaction / commitment.

One of the main goals of organizational theorists is, according to Simms (1994) “to revitalize organizational theory and develop a better conceptualization of organizational life.” An organizational theorist should carefully consider levels assumptions being made in theory, and is concerned to help managers and administrators.


Toyota represents one of the top automobile manufacturer’s offices in North America to work for. Toyota boasts that their, “integrity, passion, and innovation extend beyond vehicle manufacturing.”This bold statement is backed by a strong policies and procedures that they have been put in place.

The Toyota Corporation forward thinking. For Toyota to foresee the growth that is to occur ahead, they must begin by looking at their past. Toyota has established itself as a top competitor in the North American and Global automotive market place by practicing the formula that started it all back in 1957. Hiring people not as employees but as individuals has set bar for corporate achievement. Understanding that people possess different strengths and abilities have benefited the individual through exploiting as many possible talents in one area, thus creating greater opportunity for growth within the corporation.

Toyota’s diversified employment approach births the new ideas and future concepts that keep emerging on the frontier of the automotive industry, thereby maintaining Canadian and Global industry leadership. One of Toyota’s top ten official business strategies is to recruit the best and brightest, thereby creating new opportunities for partnerships. These key strategies give the perception to the consumer and employee that Toyota holds a “reputation for excellence” on all levels of operation.

Toyota believes in being ethical in the business sense as well as the social sense. Ethics begin at the core of the company and work their way out. Top management believes in diversification and through that diversification representing many faces at Toyota i.e. minorities. No stereotypical assumptions or prejudices are apparent at Toyota, just the selection of talented individuals who posses leadership and innovation.

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Socially, Toyota portrays as positive corporate image. Toyota quotes, “We also believe in helping people improve the quality of life in their communities. We work with organizations, schools, universities, and other businesses to support programs that help make our world a better place.” These ideals are practiced across the country and internationally.

A Large Family

We consider ourselves as part of a big family. We should strengthen this feeling further by providing leadership which will generate enthusiasm at all levels and bring us still closer.

Basic Trust in People

We have basic trust in people. We strongly believe that in general people are good. So we should foster a spirit of co-operation between individuals and groups with trust and understanding whether it is a colleague or a dealer or a vendor.

Each Employee Likes to Contribute

We believe that, given a chance, each person is capable of contributing and would like to contribute to the growth of the organization. A sense of self discipline is to be inculcated which makes an individual do what is expected of him. The climate in which these objectives shall be pursued will be openness that will encourage the exercise of initiative, enterprise and creativity.

Pride in Company and Products

We must develop a sense of belonging to the company and take pride in the company’s products and services. People at all levels should derive satisfaction and a sense of accomplishment from their involvement and participation in the work. We must attempt to combine the accountability, flexibility and freedom which are characteristics of a family with the strength of a large organization.

Information in Behavior and Communication

Though relationships should be built on the basis of mutual respect, there need not be a formal approach to one’s behavior and communication. There should be a sense of camaraderie and friendship rather than a sense of awe when dealing with one’s superior or colleague. Communication channels should be open at all levels and hierarchical barriers should not come in the way of this informality.

Promotions From Within – Training and Career Planning

Opportunities should be provided within the organization for advancement. For this, individual initiative, ability and accomplishment have to be encouraged. All employees should be offered appropriate opportunities to improve their skills and capabilities and prepare themselves for more responsible jobs. The company will make known to every one in the organization such career paths as are open within the various functions and by moving him from one function to another, together with the experience or qualification appropriate to each successive level. We should aim for the fulfillment of employees’ potential within the framework of available opportunities, by the use of structured succession planning, career planning and analysis of performance and training needs.

Healthy Working Environment

Quality of a working life should be maintained through a physical environment which is healthy, safe comfortable and pleasant. Also a useful range of employee service atmosphere should be promoted as it would enhance self respect.

Top Management to Set Example

Top Management and Senior Managers are expected to set an example for what they expect from their subordinates. It is an established fact that if we want our subordinates to behave in a particular way, we should do so ourselves in the first place.

Top Management – Fair and Firm

Each employee should feel assured that if he is wronged he has access to the Top Management and that a genuine grievance will be redressed. Also that the Management will not yield to a wrong action under pressure; but if the management happens to err, they have the strength to accept the fault and correct their mistakes. No compromise on honesty and integrity can be made.

Top Management – Visible and Accessible

The organization structure has been clearly defined and is visible. People, therefore, can understand their own roles as also the interaction with those with whom they have staff, line or service relationship.

Values of Top Management Becomes Values of All Employees

Values of Top Management should be known to all employees and it is hoped that the employees will also imbibe and follow similar values.

Toyota & General Motor’s Organizational Behavior

New United Motor Manufacturing, the famous joint venture experiment by Toyota and General Motors, will close its doors. John Shook, now an industrial anthropologist, was there at its launch and witnessed that cultural reinvention. He understands how the culture at NUMMI, as it was called, changed so dramatically and quickly.

His team turned a once dysfunctional disaster, GM’s Fremont, Calif., plant, into a model manufacturing plant, using the same workers. Toyota hired Shook in late 1983 to work on the Toyota side of its new venture with GM. Shook was assigned to a newly formed group at the company’s Toyota City headquarters in Japan to develop and deliver training programs that would support its impending overseas expansion.

The companies were attempting the joint venture because GM wanted to put an idle plant and workforce back on line. Toyota was facing pressure to produce vehicles in the U.S. It was trailing Honda and Nissan which were building cars in Ohio and Tennessee respectively. Toyota wanted to learn quickly, and having a partner with an existing plant seemed a good choice. In fact, Toyota’s primary interest was in learning, and not in the kinds of tangible business objectives that typically define a joint venture.

Starting in late 1983, Toyota put Shook to work at its headquarters and at the plant in Takaoka, Japan, NUMMI’s “mother plant” that produced the Corolla. He worked on all the major processes of car assembly. Then, working with Japanese colleagues, he helped develop a training program to introduce the Toyota system to the American employees of NUMMI.

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The workforce in the old GM Fremont plant was considered very bad. In fact, many thought it was GM’s worst. The employees frequently went on strike, filed numerous grievances and even sabotaged quality. Absenteeism routinely ran over 20%. And the plant produced some of the worst quality in the GM system.

Toyota was concerned about trying to transplant its methods of cultivating employee involvement into a workplace as poor as Fremont. How would the workers support the concept and practice of teamwork? While problems did crop up, they were ultimately overcome. Moreover, the union and workers embraced Toyota’s system. Employee absenteeism fell to a steady 2%. The quality went from being GM’s worst to one of its best in just a year, and all with the exact same workers. But in changing the production and management system, the culture also changed.

Shook learned that the way to change culture is first not to change how people think, but instead to change how people behave–what they really do. Those who were trying to change the culture needed to define the things they wanted to do, the ways they wanted to behave and the ways they wanted others to behave–and provide training and then do what was necessary to reinforce those behaviors.

So how did behavior change at NUMMI? The best example comes from its stop-the-line, or andon, system on the assembly line. Toyota believes that all employees have the right to be successful every time they do their job, and part of doing their job is finding problems and making improvements. The andon system epitomizes this belief in, and commitment to, enabling employees to build in quality in their work.

At first GM was concerned about giving workers the right to stop the line. But Toyota believed it was the workers’ obligation to stop the line whenever they found a problem. In fact, Toyota’s system presumed that each worker on an assembly line knows precisely what his or her job is. He has the skills and knowledge to know when he encounters a problem and what to do once he’s found the problem, and he knows that once he notifies his manager, his manager will provide assistance.

What changed at NUMMI wasn’t an abstract notion of employee involvement. It was giving the employees the means by which they could do their jobs successfully. And it was communicating clearly to employees what their jobs were and providing the training and tools to enable them to perform those jobs successfully.

Since it emerged from bankruptcy in 2009, General Motors has been spending a goodly amount of effort trying to prove that the “New GM” does things differently than the company that squandered over 15 points of market share in the past two decades. Its latest gambit is linking salaried employee bonuses, in part, to customer loyalty. While we tend to cast a skeptical eye on such proclamations – whether they come from GM or any other automaker – we’re intrigued by what seems like a legitimate effort by GM North American President Mark Reuss to truly remake the automaker into a customer-focused company.

According to Automotive News, Reuss has ended the longstanding practice of each GM fiefdom having its own internal goals, with the overall success of the organization rendered irrelevant. As Reuss told AN, “Everybody had their own metrics, which somehow were all green. But, weirdly, when we added it up, it was pretty red.”

All of GM’s 29,000 salaried North American employees, including both sales and marketing and design and engineering staff, will be covered by the new policy, which rewards employees with year-end bonuses only if goals for quality and customer retention are met. The customer focus was added this year, with the quality goals having been set in 2011.

Toyota has a special culture, deep-rooted values, and respect for their workforce. Toyota’s tradition is to NOT lay off employees during hard times. This tradition hasn’t really been put to the test until now. And Toyota has stuck to its guns and its values.

“This was the first chance we’ve really had to live out our values,” says Latondra Newton, general manager of Toyota’s Team Member Development Center in Erlanger, Ky. “We’re not just keeping people on the payroll because we’re nice. At the end of all this, our hope is that we’ll end up with a more skilled North American workforce.”

“At the end of all this, our hope is that we’ll end up with a more skilled North American workforce.” It means that while these employees were not manufacturing automobiles, they were in training. They were doing safety drills, participating in productivity improvement exercises, attending presentations on material handling and workplace hazards, taking diversity and ethics classes, attending maintenance education and taking a stream of online tests to measure and record their skill improvements. Toyota is shifted the Texas and Indiana workers temporarily to Toyota plants whose assembly lines were moving at full speed, such as the Camry assembly plant in Georgetown, Ky. In addition to all of this, the workers also spent some time painting the plants and even helped build Habitat for Humanity homes. And they were getting paid.

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The estimate is at least $50 million dollars, plus the loss of revenue of shutting down production. Why is this value and tradition worth so much to Toyota? Why would they be willing to spend $50 million rather than lay people off? It’s because Toyota believes that its people, yes, its PEOPLE are its greatest investment and its greatest asset. You hear so many companies say that, but would they really put their money where their mouths are when the rubber hits the road (no pun intended)? In Toyota’s case, the answer is yes they would.

When, not if, the plants return to full production, Toyota will have well trained employees on the front line, ready and able to meet the demand for their vehicles. And not only will they be well trained, they’ll be happy and motivated to work. Because Toyota is willing to go to the mat for their people, their people will be willing to do the same for Toyota.

Unlike their counterparts GM and Ford, Toyota has always taken a long-term strategic view about their employees. Toyota understands that laying off thousands of employees for slowdowns or plant retooling is counter productive. They wisely utilize the time to redistribute their workforce to understaffed plants, provide additional training for the new products, and leverage their workforce to speed the transition for newer products. Their philosophy has avoided labor disputes and staffing shortages. It has kept the company as a leader in quality and profitability over its shortsighted competitors.

Really commit to upholding the value that your people, let me repeat that, your PEOPLE are your greatest asset. Treat them with respect and dignity. Do everything in your power and your imagination to keep them on the payroll during the rough times. If you don’t, you may not find those people again on the upside of the downturn. And if you do, you’ll have hyper-productive, motivated teams delivering quality because they’re committed on a deeper level to your company.

A comparison with the New United Motor Manufacturing Inc. (NUMMI) at Fremont, California may help to answer this question. NUMMI is a joint venture between GM and Toyota. An old GM plant was placed under Toyota management, and the cars made were divided among the two companies and sold under different brand names, Toyota Corolla and Geo Prizm. Toyota did not convert NUMMI into a high tech factory like Hamtramck. Instead, Toyota managers simplified the job classification of workers and grouped them into teams for more flexible production. Workers were also granted greater power to stop the assembly line when they detected problems. As a result, NUMMI was able to achieve productivity levels as high as GM’s other high tech factories (Hof, 1989; “When GM’s robots, 1991).

Massive automation without corresponding changes in management and work force organization is not enough. Because GM’s executives were too concerned with labor cost, they failed to recognize that other costs are also significant. These costs include inventory, defective parts, and overhead (Hampton & Norman, 1987). Although automation can also reduce these costs, NUMMI clearly shown that changes in management practice are more cost-effective than buying new machines. Moreover, GM’s corporate culture in the 1980s was resistant to change in management-worker relationship. Many managers of other factories dismissed NUMMI’s practices as irrelevant (“On a clear day,” 1989; “When GM’s robots,” 1991). As a result, GM failed to fully develop its human resources. In contrast, the organizational innovations of Japanese car producers, such as teamwork, short product cycles, JIT (just in time inventory management), much longer training time for workers, and a more equitable relationship between management and workers allow them to fully exploit the advantages of flexible production.

Besides the issue of management, GM’s speed of automation also turned out to be damaging to the company. GM simply wanted to do too much with too little time. As a result, managers and workers did not have enough time to master the latest technologies available. The chaos in Hamtramck during its first year clearly illustrates the danger of GM’s “rushing ahead” strategy. In contrast, Ford and Chrysler moved more cautiously towards automation because they were at the edge of bankruptcy in the early 1980s. They simply did not have the ability to compete with GM in automation. As a result, these two companies’ automation processes were more systematic and did not have GM’s troubles.

Learning from the Article

Through this Article we learn that:-

Meaning of Organizational Behavior.

Organizational behavior that prevails in Toyota & General Motors.


From the whole study of Organizational Behavior we can conclude that deciding on which motivational system to use depends on which efforts are determined to be the most important; in some cases, individual successes might be the most important, while in others an organizational sub-unit’s (or group’s) performance could well be the deciding factor. Knowing which techniques to use in a particular situation is a skill that takes time to develop, but it is important to know that even less than successful change implementations often result in enhanced skill development for would-be change agents. Each of the systems has advantages and disadvantages, and each has instances in which it is the most appropriate. Similarly, there is considerable overlap between the three as to which techniques work best; learning how and when to use a particular strategy is a lesson that can often be learned “on the job” through tweaking of the instructions and challenges given to the constituency.

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