25 Apr 2022


The Roots of Toyota’s Cultural Crisis

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Academic level: College

Paper type: Coursework

Words: 545

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Corporate public relations is an aspect of a business that is supported by strategy and executed by members of the organisation. However, in many Japanese corporations, the corporate culture does not support strategy or individualism. It has been found that these companies tend to succeed through operational effectiveness. Toyota, for instance, has been a symbol of quality throughout the world for many years. The company’s emphasis on “continuous improvement” help it achieve the status of the global best seller of automobiles ( Luthans and Doh, 2014 ). Regardless, the company was compelled to recall 8.5 million vehicles between January and February 2010 because of quality reasons, a move that cost the company about $2 billion. These recalls were because of sticking accelerator pedals and floor mat pedal entrapment issues. Even though the recalls had considerable financial implications for the company, it was the manner in which the company handled the situation that brought to light Japanese corporate culture. This paper compares Japanese and American corporate cultures and presents recommendations for Japan and other Asian countries on how they could adopt some practices in the United States and Europe.

From Toyota’s quality crisis, it is clear that there exist certain differences in corporate cultures between Japanese and American companies. First, it was found that Japanese companies have a culture of deference, which discourages subordinates from reporting problems to their superiors ( Luthans and Doh, 2014 ). Such a culture calls for total obedience to superiors, and no one is allowed to question their leaders, which is different from the case in American companies. Second, Japanese companies focus on consensus while American companies promote individualism. Consensus makes it hard to challenge what has already been decided, while individualism allows employees to present their concerns, thereby helping the company avoid making certain errors. Finally, Japanese companies put an emphasis on loyalty to the company over concern for customers. Thus, in Japan, employees identify very strongly with their firm or superior. In the United States, the culture is considerably different as many people identify with their occupations, such as “mechanic” or “engineer”. 

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Toyota’s quality crisis, however, should not be used to dismiss Japanese corporate culture. This culture has also been found to be beneficial in other aspects. First, the decision-making process in many Japanese companies takes place in stages ( Luthans and Doh, 2014 ). For this reason, the decisions are more cautious and conservative than they are in United States companies. By doing so, Japanese companies are able to minimise errors and promote consistency. Second, the overall structure of Japanese companies is developed in such a way that firms are organised by Japanese. It is expected, therefore, that almost every member of the organisation shares a common background to identify the situation. Some of the understanding does not need to be spoken, which constitutes one of the most significant communication skills in the country. Finally, In Japan, many businesses appreciate face-to-face meetings. Such a meeting is very important to the Japanese for carrying out business relationships. In the current business world where teleconferences and video meetings are common in many companies especially in the United States and Europe, the significance of face-to-face communication can easily be overlooked. Meeting face-to-face builds trust, understanding, and a sense of shared mission. 

Japanese companies may learn from American and European companies in several areas. For instance, Japanese companies should consider appointing independent external directors who would make sure the companies place greater emphasis on customers and enhance corporate governance ( Luthans and Doh, 2014 ). Also, these companies should modify their management style accordingly so that they become more responsive and decentralised. Considering the fact that the Japanese corporate culture has both strengths and flaws, Japanese companies need to keep the former and eliminate the latter in order to avoid crises in the future. 


Luthans, F., & Doh, J. P. (2014).  International management: Culture, strategy, and behavior . New York, NY: McGraw-Hill Irwin (9th Ed.).

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