Quality in Practice: Toyota Motor Corporation, Ltd. 1
The Toyota brand name has earned an international reputation for quality. The roots of Toyota
Motor Corporation, founded in 1937, stem from the Toyoda Automatic Loom Works. Sakichi
Toyoda invented a loom with an automatic stopping function; whenever a thread broke or the
machine ran out of thread, it stopped automatically. This approach was built into automotive
assembly lines to improve quality and productivity and led to the development of the “Toyota
Production System,” which has commonly become known as lean production. A significant
feature of lean production is the practice of continuous improvement by every worker,
demanding the questioning of every process and testing of all assumptions. Errors and defects
At Toyota, everybody helps whenever they can. Even top and middle managers are well-
known for getting their “hands dirty” by helping workers on the production line when necessary.
Toyota uses games, competitions, and cultural events to promote its 3 C’s: creativity, challenge,
and courage. It trains workers extensively, not only in job skills, but also in personal
development that focuses on positive attitudes and a sense of responsibility. Toyota’s education
system includes formal education, on-the-job training, and informal education.
Toyota is implementing a direct monitoring system that supports quality. For example, its
relationships with suppliers and customers. For example, customers may request quotes and
gather information that previously was only available to dealers.
Shotaro Kamiya, first president of Toyota Motor Sales, stated, “The priority in receiving
benefits from automobile sales should be in the order of the customer, then the car dealer, and
lastly the maker. This attitude is the best approach in winning the trust of customers and dealers
and ultimately brings growth to the manufacturer.” The guiding principles of Toyota are as
follows:
1. Honor the language and spirit of the law of every nation and undertake open and fair
corporate activities to be a good corporate citizen of the world.
2. Respect the culture and customs of every nation and contribute to economic and social
6. Pursue growth in harmony with the global community through innovative management.
7. Work with business partners in research and creation to achieve stable, long-term growth
and mutual benefits, while keeping ourselves open to new partnerships.
Toyota has approximately 40 production facilities in more than 20 countries and regions
outside Japan. When Toyota began expanding outside of Japan, many believed that the culture
could not be copied or applied to foreign cultures, especially in the United States. With a focus
of incorporating the best elements of Japanese and local traditions, while avoiding the
weaknesses of both, Toyota as proven that its approaches and culture can work everywhere.
One popular phrase at Toyota is “change or die.” The company continually seeks to
redefine itself to adapt to changes in society and the business environment. Toyota’s recent
vision is captured by the phrase harmonious growth—a harmony between man, society, and the
environment.
people around the world, who would think it natural if Toyota became No. 1 in size, since
we provide attractive products that excel in environmental protection and in safety and
thus contribute immensely to local communities. That is the goal of “Harmonious
Growth” and what I regard as corporate virtue. – Hiroshi Okuda, Chairman
Key Issues for Discussion
1. What do Toyota’s guiding principles mean for its management system? In particular, how
do they reflect the principles of total quality?