Wednesday, April 14, 2010

Monday Morning Quarterbacking Toyota's Safety

image:: LATimes graphic on Toyota org. chart

Embattled Toyota is facing fines in the US due to its handling of safety issues and the LATimes had an article on what it calls its dysfunctional corporate culture. That might be more than a little misguided.  The article claims that the problems may have stemmed from how decisions are centralized in Japan. The  evidence the Times offers is from ex-employees, many of whom have left the company years ago. The article draws the conclusion that there are "silos" in the corporation that don't talk to each other.

In my work, I have found that structure and culture are often intertwined. Japanese enterprises are often complex "ecosystems", which often involve networks several companies. For example, Toyota shares workers with its suppliers with a practice called shukko. This is very different from how things are done in the US. Toyota's corporate culture created its structure. In order to deal with multinational operations, I can see why there was a firewall between US and Japanese operations. 

Structure isn't the panacea. Matrix organizations that have a grid-like structure supposedly allow for greater flows of knowledge and increased transparency, but can be dysfunctional in their own way. This Office Space {1999} clip highlights this, with the protagonist being reminded by his 7 bosses of his mistake::

So, organizational culture matters, as culture dictates the realities of knowledge flows and transparency, which as Granovetter's embeddedness concept has shown, is a social phenomenon. Anyone who tells you that auditing is the answer should read Granovetter's 1985 paper

More to the point is who was in charge of trying to pull the wool over the regulators' eyes, Japanese headquarters, US offices, or both? In an earlier blog, I mentioned my own issue with my Prius. The high intensity headlights have a fault and it's not clear if it's the bulb burning out or if there's a problem with the electronics, i.e., the ballast for the headlamp. Oddly, the investigation by the US NHTSA ruled against a recall before all of the information from Toyota was sent to them. Huh? Is this a matter of corporate influence or government regulators dropping the bulb in this case and what happened in the other incidents? 

While the blame game rages, I found Robert Bea's comments in the Times article to be interesting. A UC Berkeley engineering professor who is studying the Toyota situation has accumulated about 800 case studies of corporate and government-agency fiascos. Bea says the cultural and organizational problems affecting Toyota are analogous to those of NASA and the Army Corps of Engineers, which caused both to ignore the structural issues that caused the Columbia space shuttle and Hurricane Katrina disasters, respectively. Something tells me that the failure here is from multiple sources.

Twitterversion:: Toyota's safety problems are seen by some as a f(x) of their structure, but what about org. culture & relp. w/regulators? @Prof_K

Song:: Robyn-'Konichiwa Bitches'

1 comment:

Anonymous said...

Toyota safety incident for alcohol and vending machine