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2/25/2010 4:26:43 AM Subscription options
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Toyota’s “Fractured” Corporate Structure and Business Unit “Fiefdoms”

As journalists begin to peel the layers of Toyota’s recall issues back; new insights from former insiders and current experts are being revealed. Did Toyota become overly comfortable with its past successes, and has it gotten too big to effectively identify and communicate potential issues before they become costly mistakes? It is beginning to look like Toyota’s current corporate structure is inherently flawed.

I have been scanning the news coming out of Toyota’s congressional hearings, and have come across several articles that include insights from former Toyota insiders that shed new light on the company’s problems.

In a Logistics Magazine article, Joel Sutherland, Managing Director of the Center for Value Chain Research, who was, at one time, the highest-ranking American at Denso, Toyota’s largest supplier, made two comments that seem to reflect a “we can’t fail” attitude.

First, Sutherland said, “You can't take your eye off the ball when it comes to quality. You can't blink. And, unfortunately, I think that's what happened here." Followed by, “In this case, it looks like somebody failed to ensure the quality was there throughout the process. They assumed it was there. They assumed that, because it was a Toyota-engineered product, the specs were right, and nothing would go wrong."

If accurate, those comments indicate a blind belief in the brand based on past performance, and perhaps a tendency toward resting on one’s laurels – dangerous attitudes to be sure.

By dmattison
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topic tags

collaboration, organizational structure, silo, Toyota supply chain,

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