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Testing a theoretical model underlying the 'Toyota

Way' - An empirical study involving a large global
sample of Toyota facilities

Article in International Journal of Production Research July 2014

DOI: 10.1080/00207543.2014.883467

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Massey University Massey University
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Nigel P. Grigg Nicky Campbell-Allen

Massey University Massey University
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Testing a theoretical model underlying the

Toyota Way An empirical study involving a
large global sample of Toyota facilities
a a a a
Nihal P. Jayamaha , Jrgen P. Wagner , Nigel P. Grigg , Nicky M. Campbell-Allen &
b
Warwick
Zealand Harvie
2 Toyota Global Knowledge Center, Torrance, CA, USA
Published online: 12 Feb 2014.

To cite this article: Nihal P. Jayamaha, Jrgen P. Wagner, Nigel P. Grigg, Nicky M. Campbell-Allen & Warwick Harvie
(2014): Testing a theoretical model underlying the Toyota Way An empirical study involving a large global sample of
Toyota facilities, International Journal of Production Research, DOI: 10.1080/00207543.2014.883467
To link to this article: http://dx.doi.org/10.1080/00207543.2014.883467

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 International Journal of Production Research, 2014

http://dx.doi.org/10.1080/00207543.2014.883467

Testing a theoretical model underlying the Toyota Way an empirical study involving a large
global sample of Toyota facilities
a a a a b
Nihal P. Jayamaha *, Jrgen P. Wagner , Nigel P. Grigg , Nicky M. Campbell-Allen and Warwick Harvie
a
School of Engineering and Advanced Technology, Massey University, Palmerston North, New Zealand; bToyota Global Knowledge
Center, Torrance, CA, USA
(Received 4 October 2012; accepted 6 January 2014)

In this paper, we empirically test the theoretical model underlying the Toyota Way (TW), based on data obtained from Toyota s
logistics, sales and marketing functions across 27 countries. TW is the result of Toyota attempting to codify its culture to the
global community. Using structural equation modelling techniques we show that the TW-associated measures challenge,
kaizen, genchi genbutsu, respect and teamwork do adequately operationally define the TW; the first three measures
corresponding to the construct process improvement and the final two measures corresponding to the construct people
development. Empirically, people development is found to have no direct effect on how the TW is deployed across a business
unit. However, people development is found to be indirectly related to TW deployment through the mediating effect of process
improvement. Our study provides quantitative evidence that while the intangible aspects of the TW (modelled as people
development) may not directly relate to the results, they are an integral compo-nent of a complete implementation of the TW
and related Lean systems. By logical extension, this provides support for adoption of a holistic and long-term strategy,
integrating soft and hard elements, by those organisations attempting to implement and sustain Toyota-style systems.
Keywords: Toyota Way; continuous improvement; people development; intangible resources; structural equation modelling

1. Introduction
It is widely recognised within operations management that when it comes to production and supply chain efficiency, not many
companies can rival Toyota Motor Corporation (TMC) (Finch 2008; Lander and Liker 2007; New 2007; Womack
and Jones 2003). One aspect that sets Toyota apart from others is its unique Toyota Production System (TPS), which
integrates the people of Toyota with its technical system. This socio-technical manufacturing system was first published by
Sugimori et al. (1977), followed by further dissemination by one of Toyotas founding engineers, Ohno ( 1988). At the very
outset of his book, Ohno asserts that TPS can be viewed not only as a unique and ef ficient production system, but also as a
philosophy of getting the best out of its people (Toyota and its partners) through developing the human resources. Many
scholars (e.g. Dyer and Nobeoka 2000; Jayaram, Das, and Nicole 2010; Lander and Liker 2007; Liker 2003; Monden
1998; Rother 2010; Spear and Bowen 1999; Womack, Jones, and Roos 1990) have since researched the TPS in detail, and
extensive literature on the TPS as a prescriptive set of tools, techniques and management practices is widely available. TPS
has more recently come to be generalised globally as being virtually synonymous with Lean, or Lean thinking (e.g. Womack
and Jones 2003), through the mechanisms described as follows:

1.1 The evolution of lean concepts

Lean is a term and a concept that has evolved over many years (Hines, Holweg, and Rich 2004; Schonberger 2007). In the
1980s and 1990s, much research was being conducted on just-in-time (JIT) production, which forms a corner-stone of
contemporary conceptualisations of Lean. JIT as a method focused on scheduling of resources in the right quantity, exactly
when needed (Chase, Aquilano, and Jacobs 2004; Schonberger 2007; Shah and Ward 2007). However, JIT also represented
a wider management philosophy. This dichotomy is evidenced through references by Chase, Aquilano, and Jacobs ( 2004,
427) to early and later versions of Lean as, respectively, little JIT and big JIT. The term Lean began to be adopted after
John Krafcik and his team at MIT (led by James Womack) conducted extensive

*Corresponding author. Email: N.P.Jayamaha@massey.ac.nz

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