Proceedings of Annual Paris Business and Social Science Research Conference
7 - 8 August 2014, Hotel Crowne Plaza Republique, Paris, France, ISBN: 978-1-922069-57-3
Toyota India: ‘One Best Way’ or ‘Equifinality’? Trapped
between a Rock and a Hard Place
Reynold James
The Japanese philosophy of ‘Lean’, that essentially advocates the relentless elimination of all
non value-adding aspects within an organization, lends itself to two interpretations in the
literature (i) lean production is an efficient, humanistic machine, and (ii) lean production is a very
sophisticated prison Both contradicting stances however, claim that the ‘lean’ model is
transferable -as technical objects- from one cultural setting to another (ie sans cognisance of
contextual elements), for example Japan to the USA (Florida and Kenney, 1991).
This paper adopts a qualitative methodology, and maintains that whilst transplanting Japanese
lean practices in general-and the Toyota Production System [TPS] in particular -from Japan into
overseas affiliates, failure to consider a host nation’s unique socio-cultural, historical and
environmental factors could lead to less than productive organisational outcomes for the parent
company, resulting in serious implications for human resource management policies and
practices. Cementing this viewpoint are the findings of the most recent of a series of field
research visits [constituting a longitudinal study on the international transference of the TPS
system into overseas climes] undertaken to Toyota Japan’s Indian affiliate, namely Toyota
Kirloskar Motors [TKM].
Field of Research: Human Resource Management
JEL Codes: M12, M13.
1. Introduction:
This case study examines the ongoing attempts of Toyota Motor Corporation (TMC) to
implant its renowned Toyota Production System (TPS) - the more advanced form of the
Japanese lean production model- into its Indian affiliate near Bangalore in south India.
Whilst Toyota believes that TPS represents a universal one-best-way for manufacturing
transplantable anywhere in the world (Jones et al 2010), earlier findings from this ongoing
longitudinal study (see James & Jones,2013) indicate significant variations between this
„one best way‟, and the current -much diluted -form it has assumed in India. This study
draws on the findings of a recent field visit undertaken in December 2013 (preceded by
three similar visits between 2008-2011), to further establish, that whilst transplanting the
Toyota Production System from Japan into overseas affiliates, failure to consider a host
nation‟s unique socio-cultural and environmental factors could lead to adverse outcomes
for the parent company, and its human resource management policies and practices.
Established prior to World War 2, TMC grew into a MNC auto manufacturer enjoying
unprecedented success since its formation. Despite its setbacks in recent years (Liker and
Ogden, 2011), it‟s still a formidable force, with 52 plus overseas manufacturing companies
in 26 countries outside Japan. Widely regarded as the originator of the lean production
system, TMC is espoused to TPS, its customised lean production approach, as
encapsulated within The Toyota Way and the Toyota Production System (Jones et al
2010) .This approach –TMC believes-is a universal one-best-way system for
manufacturing environments, reliably transplantable across national boundaries.
Consistent with this thinking, TMC expanded its global reach by establishing affiliates in
________________________________________________
Reynold James, PhD, MBA. Zayed University [College of Business], AbuDhabi, U.A.E.
Email: reynold.james@zu.ac.ae
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Proceedings of Annual Paris Business and Social Science Research Conference
7 - 8 August 2014, Hotel Crowne Plaza Republique, Paris, France, ISBN: 978-1-922069-57-3
USA, Canada, Europe, Australia, Asia-Pacific, and China and also India, where it recently
commenced operating its second production facility (James,2011; 2012). Ironically, despite
the best efforts of large numbers of Japanese trainers and executives assigned across
facilities, very few overseas affiliates have succeeded in implementing the „pure‟ form of
TPS, with some form of a hybrid system invariably being implemented, thereby
considerably compromising the TPS system.
TMC‟s bumpy ride in India: The Indian context has been particularly troublesome for TPS‟
introduction since TMC commenced production in India in 1999, with unrealistic
aspirations of capturing a major (10% by 2010) share of this important market, unrealised
to date. Strikes (the latest being in March 2014), lock-outs, industrial unrest, and violence
have punctuated most of its decade- plus experience, effectively negating its Indian
aspirations. .The company‟s reiterated 2006 sales projection of 10% market share by 2010
didn‟t materialize -only 2.5% was attained-with the MD Nakagawa, in 2008, announcing
the company‟s target date of 2010 had been put back to 2015, since „we did not have
much experience in the past ten years; now is the time for us to jumpstart’ (Tribune, 2006
;Business Line, 2008; Financial Express, 2008).The current figure hovers around the 6%
mark, in 2014, with chances of the 2015 targets being met, being questionable.
Our data reveals that employees‟ initial euphoria about working in a Japanese global MNC
soon wore off [„within India it is a prestige issue to work for Toyota, the workers were very
happy with this, it was very difficult to get a job with Toyota’ (interview with business
journalist)], when they realised the demands of TPS could not be reconciled with the social
frameworks they were accustomed to. The extent to which TPS and the Indian social
frameworks and worker psyche didn‟t mesh, began to unravel over time. TMC
underestimated the extent of compromise needed to achieve a fit with the Indian
environment. Several interviewees suggested that the initial approach of TKM
management to Indian workers within their cultural context, was rather callous, and
arrogant, in the sense of rigidly sticking to the one-best-way approach epitomised by TPS
and the Toyota Way. Only after living the Indian experience for ten years did TKM
management appear to realise that the only way to succeed in India was to make
necessary compromises with the Indian culture. Faced with such problems TMC was
forced to re-think its entire process of doing business in India, and effective 2007-2008
[with its market share still skimming the 2-3% mark then –and 6% now] the company
undertook a progressive series of measures to reconcile its approach with Indian sociocultural frameworks This seriously compromised its pure TPS philosophy, resulting in TPS
[unofficially] being transformed into and rechristened TIPS (Toyota Indian Production
System). Comprehending the foregoing requires an understanding of the lean production
model, especially the historical and contextual factors that existed during its
conceptualisation and development in Japan.
TPS‟ natural habitat: TPS evolved in response to the unique cultural and environmental
factors faced by Japan, the most distinctive being the lack of natural resources, and the
fact that daily living in the Japanese concept (which significantly differs from the Indian
culture) is centred around a cultural pre-occupation with work.
Constrained natural resources and socio-cultural factors critically influenced the values,
beliefs, and behaviours of the Japanese workforce. Minimising waste in every form is an
important ingredient of lean thinking. Robbins (1996) posits, that national culture
influences organizational behaviour. Others (e.g. Spear and Brown, 1999; Burnes,2000
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Proceedings of Annual Paris Business and Social Science Research Conference
7 - 8 August 2014, Hotel Crowne Plaza Republique, Paris, France, ISBN: 978-1-922069-57-3
etc) maintain that TPS was not imposed on the workforce, rather, it evolved naturally out
of the workings of the company, resulting in the thinking and behaviour of Toyota
employees being moulded continuously by the developing norms of their company.
Contextual Incongruence: Ideal TPS environment versus the Indian environment :-Based
on the foregoing, we argue that there‟s a significant clash between several Indian socio
cultural frameworks and TPS‟s ideal requirements, a view supported by several scholars
(e.g., Abegglen and Stalk, 1985; Gupta, 2008; Kanungo and Mendonca (1994);
Ramaswamy (1996) and Bhadury (1991), to name a few. India is extremely
heterogeneous, and comprises a multi-cultural, multi-ethnic, multi-religious, and multilinguistic federation of several States, much at variance with Japan‟s homogeneous
makeup. Bhadury (1991), highlights the major social contrasts between India and Japan,
which when juxtaposed with Robbin‟s (1996) stance -stated above- could be construed to
mean that TPS has little fit with the Indian socio-cultural context.
2. Literature Review
The book „The Machine that Changed the World’ (Womack, Jones and Roos 1990, p. 13)
first used the term „Lean production’. TMC is widely regarded as the originator of the lean
production system, the evolved version of which is TPS, developed during the 1950s by
the Vice-President of TMC, Taiichi Ohno, who states that waste is attributable to seven
sources: over- production; inventory; waiting; processing; motion; conveyancing; and
correcting (Ohno 1988). He founded TPS on concepts designed to maximise flow,
eliminate waste, and ensure respect for people. Several versions of the TPS training
programme have been developed during different stages, but the basic elements of TPS
remain: just-intime production, jidoka, standardised work and kaizen (Moden 1983, 1998;
Graham 1988).
The lean concept lends itself to two interpretations in the literature (i) lean production is an
efficient, humanistic machine - a viewpoint popularised by „apologists‟ (eg, Liker and
Hoseus, 2008); and (ii) the critical theorists‟ view that lean is a very sophisticated prison
(eg, Parker and Slaughter, 1988, 1994). Both however, claim that the lean model is
transferable -as technical objects- across cultural settings (ie sans cognisance of
contextual elements), for example Japan to the USA (Florida and Kenney, 1991).
Countering this, are several scholars who emphasise the role of the social context within
which lean systems operate, and who argue that the efficacy of the latter is dependent on
the former (Sugimore, Kusunoki, Cho and Uchikawa 1977; Womack and Jones 1996; Liu
and Jones 2005; Jones, Betta and Latham.2009).These authors also stress the centrality
of the role of Japanese cultural institutions to the growth and deployment of lean, whilst
claiming that the needs of TPS are complimented by the existence of a homogeneous
culture, single language, and religious background, which facilitates close familiarity
between Japanese people.
Bhadury (1991) is supported by others (Sinha and Sinha, 1990; Tripathi, 1990; Schwartz,
1999; Chatterjee, 2007; Becker-Ritterspach, 2005) in highlighting the gap between the
foregoing, and India‟s socio- cultural milieu, thereby furthering the case for the
contextuality of TPS, with Cooney and Sewell‟s (2000) position, wide variations exist
between the methods used and the extent of implementation of the lean model, and their
questioning the perception of lean being a monolithic, epoch-making model.
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Proceedings of Annual Paris Business and Social Science Research Conference
7 - 8 August 2014, Hotel Crowne Plaza Republique, Paris, France, ISBN: 978-1-922069-57-3
Finally, the considerable literature on lean transplantation from Japan to overseas,
neglects developing countries including China and India, an exception being BeckerRitterspach (2005; 2009), with the focus skewed towards Europe and the USA (Berggren,
1994; Besser, 1996).This study purports to fill this gap, given the rapid rise of Asian
economies.
4. Methodology and Data Collection:
This study adopts a qualitative methodology, comprising personal interviews, observation,
and document analysis. In course of the most recent of a total of four field visits
undertaken to Toyota India in December 2013 [as part of an ongoing longitudinal study
involving three earlier field visits between 2008 -2011, and over 48 interviews conducted
during the same] interviews were conducted with a Vice Chairman of TKM, three senior
Indian managers , two middle managers, a senior technical trainer, three former union
members, two senior external trade union officials, a former senior manager of the
company, a senior manager of a neighbouring Toyota [ancillaries] plant and four
business/industrial journalists from reputed national newspapers (a total of 18 interviews).
All interviews were tape-recorded and transcribed and spanned 30 minutes and two hours
in length.
Further, visits were undertaken to the company corporate HQ‟s and marketing / sales
divisions, and tours arranged for the author, around the production facilities of the 2nd
[new] plant and TKM‟s induction training institute [Gurukul], during which personal
observations were made and the same written up as field notes soon after. Information
was also obtained from company documentation, media reports, internet sources, and
journal articles. A visit was also undertaken to an adjacent sister-Toyota plant, namely
Toyota Boshoku - which yielded further insights on several aspects relevant to this study.
5. The Findings and Discussion:
[For clarity -given the evolving, longitudinal nature of this research- a brief account of the
findings yielded by an earlier field research in 2011 on the same topic are first presented in
the boxed section below, followed by the findings of the most recent field visit undertaken
in 2013.
Findings of 2011
-Recognition of the trade union: TKM recognised a trade union with external links and
agreed to take back workers who had been suspended over the years for agitating for a
trade union.
-Foregrounding Indian managers and backgrounding Japanese managers at senior levels:
A shift in policy was adopted in order to move Indian managers into higher level senior
roles previously occupied only by Japanese personnel.
-Steeper organisational hierarchy: Additional levels were added to the managerial
organisational chart to satisfy the Indian managers‟ desire for enhanced status through job
titles in the hierarchy.
-Appointment of a new Managing Director: A new Managing Director was appointed who
was generally perceived to be more union and worker empathetic
-Acceptance of a fixed ratio between the takt (production cycle) time and the number of
workers on the line and per each individual station: This means that increases in takt time
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Proceedings of Annual Paris Business and Social Science Research Conference
7 - 8 August 2014, Hotel Crowne Plaza Republique, Paris, France, ISBN: 978-1-922069-57-3
would have a corresponding increase in the number of workers on the line .This is a
significant departure from Toyota global practices, signifying acceptance of the Indian
social norm that work does not lie at the centre of daily living.
-Management acceptance of wider worker representation through the union
-Union consultation with external bodies: TKM management has accepted that union
officials can consult outside the plant with the Centre of Indian Trade Unions (CITU) during
working hours on full pay.
-Substantial wage increases: TKM workers have secured substantial increases in their
pay, elevating them to the second highest-paying manufacturing organisation in
Bangalore. This has been achieved despite a 30% reduction in TKM production during
2009.
Findings of Field Research Visit Undertaken in December 2013
The overarching message that emerged from the primary and secondary data analysis
indicated, that in order to „get it right‟ in the huge and growing Indian passenger car
market, an even more conciliatory approach towards the employees and the union has
been adopted as compared to earlier, with a policy of appeasement that seems clearly
evident from the rash of flexibilities and overall latitude allowed to permeate the shopfloor
and facility. Resultantly, shopfloor level harmony and cooperation seemed to register an
upswing. Maintaining industrial relations [IR] harmony and preventing a repeat of the strife
of the nature variety and scale of 2006.was a critical success factor for management. This,
as in TMC‟s history, its IR record at TKM was arguably the worst. Consistent with the
foregoing, are these more significant findings that are essentially indicators of the extent of
compromise that TMC made, to insure sustainability in the Indian context:






Increased bargaining power and strength of the union: Acceptance by the
management, of the creation of a ‘federation of unions’ of all Toyota plants in the
region, ie a ‘union of unions’ duly registered as a legally recognised body.
Less taxing work schedules: Additional days off / holidays granted to workers, on
days of historic / cultural/religious significance nominated by them. At the time this
data was gathered, two holidays [beyond the normal] were available to the workers
[ie birthdays of Shaheed Bhagat Singh / Swami Vivekananda]
Granting of unscheduled toilet / comfort breaks on an as required /informal basisfor line workers, which was earlier not the case.
Pujas [religious rituals] allowed on-site on days of religious / cultural significance to
Karnataka state, with traditional eats and [non-alcoholic] drinks being permitted to
be served / consumed within the plant.
Former union office bearers accorded privileges, such as having fewer curbs on
moving out of the plant on personal work etc.
Slower than earlier Takt time [that the management put down to reduced demand]
6. Summary and Conclusions
This paper opposes the view that the „lean production‟ model is transferable -as technical
objects- from one cultural setting to another (ie sans cognisance of contextual elements),
as claimed by a few scholars (example Florida and Kenney, 1991). Countering this
however, are several others too scholars who emphasise the role of the social context
within which lean systems operate (Sugimore, Kusunoki, Cho and Uchikawa 1977;
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Proceedings of Annual Paris Business and Social Science Research Conference
7 - 8 August 2014, Hotel Crowne Plaza Republique, Paris, France, ISBN: 978-1-922069-57-3
Womack and Jones 1996; Liu and Jones 2005).These authors also stress the centrality of
the role of Japanese cultural institutions to the growth and deployment of lean, whilst
claiming that the needs of TPS are complimented by the existence of a homogeneous
culture, single language, and religious background, which facilitates close familiarity
between Japanese people.
Building on earlier research of this ongoing longitudinal study this work furthers the
argument that whilst transplanting Japanese lean practices from Japan into overseas
affiliates, failure to consider a host nation‟s unique environmental factors could have
negative outcomes for the parent company, with serious implications for HRM policies and
practices.
The findings reveal that Toyota‟s ignorance of India‟s socio- cultural context fuelled the
company‟s under performance, requiring it to embark on a series of unprecedented
compromises. A dilution of TPS eventuated, and has seemingly left TMC in India faced
with the tricky question, of whether to rigidly demand adherence to its „one best way‟ (the
means) and to compromise on the ends, or, to license the Indian workers do things their
way [that could be construed as equifinality], and, as the findings suggest, elicit greater
cooperation from them, and resultantly better results all around. A difficult question indeed,
hence the title of this article!
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