Essay Paper
Toyota’s Organizational Culture
AC420-01
April 16, 2013
Toyota’s Organizational Culture Like many automotive-manufacturing industries, Toyota is concerned with producing quality vehicles while keeping costs at a minimum. The specific way they target their customers and the environment while maintaining control over costs is where Toyota differs from most other automobile manufacturers—using lean accounting and the Toyota Production System (TPS). Lean management accounting brings together accounting, control, and performance measurement methods to support the introduction of lean manufacturing (Maskell & Baggaley, 2008, pg. 1, para. 1). According to Maskell and Baggaley (2008), lean management accounting is one of a number of elements making up a lean approach within a manufacturing company. Other specific elements include: lean financial accounting, lean budgeting, and target costing. All of these elements must be employed in order to sustain a lean enterprise approach over the long term (Maskell & Baggaley, 2008, pg. 1, para. 1-3). Maskell and Baggaley (2008) further elaborate on the five principles of lean thinking previously presented by James Womack and his colleagues in their book titled Lean Thinking which are Value, Value Stream, Flow, Pull, and Perfection (Maskell & Baggaley, 2008, pg. 1, para. 3-4). Value, the first principle of lean thinking, deals with the value that manufacturing companies provide to their customers. The complete package consists of products and services that are used to serve customers. Parallel to the target costing approach, this value translates into the price that a customer is willing to pay for a Toyota car or truck and, in turn, to the product and service costs that Toyota must achieve in order to satisfy their customers’ needs and the company’s shareholders (Maskell & Baggaley, 2008, pg. 1, para. 5). Value stream recognizes that the company’s processes create customer-driven performance and excellence
AC420-01
April 16, 2013
Toyota’s Organizational Culture Like many automotive-manufacturing industries, Toyota is concerned with producing quality vehicles while keeping costs at a minimum. The specific way they target their customers and the environment while maintaining control over costs is where Toyota differs from most other automobile manufacturers—using lean accounting and the Toyota Production System (TPS). Lean management accounting brings together accounting, control, and performance measurement methods to support the introduction of lean manufacturing (Maskell & Baggaley, 2008, pg. 1, para. 1). According to Maskell and Baggaley (2008), lean management accounting is one of a number of elements making up a lean approach within a manufacturing company. Other specific elements include: lean financial accounting, lean budgeting, and target costing. All of these elements must be employed in order to sustain a lean enterprise approach over the long term (Maskell & Baggaley, 2008, pg. 1, para. 1-3). Maskell and Baggaley (2008) further elaborate on the five principles of lean thinking previously presented by James Womack and his colleagues in their book titled Lean Thinking which are Value, Value Stream, Flow, Pull, and Perfection (Maskell & Baggaley, 2008, pg. 1, para. 3-4). Value, the first principle of lean thinking, deals with the value that manufacturing companies provide to their customers. The complete package consists of products and services that are used to serve customers. Parallel to the target costing approach, this value translates into the price that a customer is willing to pay for a Toyota car or truck and, in turn, to the product and service costs that Toyota must achieve in order to satisfy their customers’ needs and the company’s shareholders (Maskell & Baggaley, 2008, pg. 1, para. 5). Value stream recognizes that the company’s processes create customer-driven performance and excellence