The International Journal of Human Resource

Management

ISSN: 0958-5192 (Print) 1466-4399 (Online) Journal homepage: http://www.tandfonline.com/loi/rijh20

Transferring the Toyota lean cultural paradigm

into India: implications for human resource
management

Reynold James & Robert Jones

To cite this article: Reynold James & Robert Jones (2014) Transferring the Toyota lean cultural
paradigm into India: implications for human resource management, The International Journal of
Human Resource Management, 25:15, 2174-2191, DOI: 10.1080/09585192.2013.862290

To link to this article: http://dx.doi.org/10.1080/09585192.2013.862290

Published online: 09 Dec 2013.

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The International Journal of Human Resource Management, 2014
Vol. 25, No. 15, 2174–2191, http://dx.doi.org/10.1080/09585192.2013.862290

Transferring the Toyota lean cultural paradigm into India:

implications for human resource management
Reynold James and Robert Jones*

Faculty of Business and Enterprise, Swinburne University, Melbourne, Australia

This paper argues that the successful international transference of Japanese lean
manufacturing practices in general, and the Toyota Way and Toyota Production System
(TPS) in particular, is in varying degrees contingent upon the sociocultural, historical
and environmental context of the host nations into which such transfer occurs. This has
significant implications for human resource management policies and practices. The
paper contends that lean manufacturing is not simply a set of concepts, techniques and
methods that can be implemented by command and control. In the course of
transferring lean practices from Japan into overseas affiliates, either an absence of due
consideration or disregard for a host nation’s unique sociocultural and environmental
factors could lead to unproductive organisational outcomes for the parent company.
This viewpoint is examined through a case study analysis of the Indian affiliate of the
Japanese automobile industry giant Toyota Motor Corporation, namely Toyota
Kirloskar Motors, located at Bidadi, near Bangalore, India.
Keywords: India; lean manufacturing; motor assembly industry; Toyota Production
System (TPS); Toyota Way

Introduction
This paper analyses the attempt by the Toyota Motor Corporation (TMC) to transfer
its cultural managerial paradigm into a different sociocultural context, namely its
international affiliate Toyota Kirloskar Motors (TKM) located near Bangalore in India.
This transference has had significant implications for the human resource management
adaptations necessary to effect a successful transition into India. TMC came into existence
in Japan prior to the Second World War and has since grown into a multinational motor
vehicle manufacturer enjoying unprecedented success since its formation. Outside Japan,
the company has a total of 51 overseas manufacturing companies in 26 countries. In 2006,
its production crossed the 8 million vehicles mark, with a global workforce comprising
350,000 people. In 2009, it overtook General Motors to become the world’s largest motor
vehicle producer (TMC 2010).
TMC promulgates its own unique way of doing business through the concept of the
Toyota Way – a set of beliefs and values that underlies its managerial approach and
production system. The Toyota Way is supported by two main pillars – continuous
improvement and respect for people (TMC 2001). The Toyota Way is perceived by the
company as a universal, a-cultural, prescriptive, one-best-way approach to doing business:
‘the concepts that make up the Toyota Way transcend language and nationality, finding
application in every land and society’ (TMC 2001, p. 3). Based on this ethnocentric
disposition, TMC insists that its subsidiaries in various parts of the world adopt the Toyota
Way in totality, together with its associated unique form of production called the Toyota
Production System (TPS). Consistent with this belief, TMC has established affiliate

*Corresponding author. Email: rjones@swin.edu.au

q 2013 Taylor & Francis

 The International Journal of Human Resource Management 2175

companies located across the industrialised and industrialising nations, with major
affiliates located in the USA, Canada, Europe, Australia, Asia-Pacific, India and China
(TMC 2011). Further emphasising TMC’s ethnocentric disposition is the fact that the
company’s Japanese leaders ’never relinquished the iron grip they exercised over the
company’s worldwide operations . . . instead of globalizing, Toyota colonized’ (Quality
Advisory Panel 2011, p. 23).
There exists a considerable literature on TMC. Its success has been intensively
researched and painstakingly documented in various works, for example Kamata (1983),
Liker (2004), Mehri (2005), Liker and Meier (2007), Magee (2007), Liker and Hoseus
(2008), Osono, Shimizu and Takeuchi (2008), Sato (2008), Rother (2010), Gronning
(1997), Taylor (2006), Towill (2006) and Kageyama (2004). Further, the literature is rich
with case studies and analyses of the transference of Toyota values and practices into other
countries and cultures. Examples include: the USA (Wilms, Hardcastle and Zell 1994;
Besser 1996; Mishina 1998; Shook 1998; Vasilash 1998); the UK (Winfield 1994; Pardi
2005); China (Liu and Brookfield 2006); Thailand (Petison and Johri 2006); and Turkey and
the Czech Republic (Kumon 2007). However, the literature dealing with the transference of
the Toyota Way into India is fragmented and analytically thin. Mathew and Jones (2012)
provide an analysis of employee relations at TKM from the viewpoint of satyagraha (non-
violent protest), but, in general, the literature is largely unhelpful in providing in-depth
academic analysis of TKM and its operations since its establishment in 1999. With the
exception of a few descriptive case studies (Majumdar 2006; Mikkilineni 2006; Ray and
Roy 2006) and some book chapters (Mooij 2005; Das and George 2006), there is a need for a
more comprehensive analysis of TKM’s operations and the dynamics surrounding the
human resource management implications of the transference process. This is a critical
omission given the significant role that TKM now plays in Toyota’s strategic global plans.
This paper is important in being conducted at this time in order to aid theorists and
practitioners to understand the forces inherent within such international transfer situations,
leading to smoother introduction of human resource management policies and practices
across national boundaries, especially motor vehicle manufacturers in industrialising
countries. However, several authoritative sources have indicated that very few of these
overseas affiliates have been successful in implementing the pure form of lean
manufacturing and TPS despite the best efforts of large numbers of Japanese trainers and
executives located within the facilities (Florida and Kenney 1991; Abo 1994; Liker, Fruin,
and Adler 1999). Invariably some form of hybrid system has been implemented which
amounts to a considerable compromising of the overall system. Recently, TMC has taken
steps to reduce the prevalence of these compromised systems within its overseas affiliates
and has commenced the process of creating a stronger pure and standardised version of
TPS across all its international affiliates. This is planned to be achieved through the
implementation of the Floor Management Development System to ensure a standardised
interpretation of continuous improvement systems through more emphasis on
‘visualisation’ methodology and implementation as close as possible to the source of
the action on the assembly floor (Liker and Franz 2011).
Toyota’s emphasis on universalistic application of its paradigm across international
and cultural boundaries stands in contradiction to the thrust of the literature on this topic.
A review of the international transference and diffusion literature reveals a number of
important concepts, most notably the application-adaptation dilemma model (Abo 1994);
strategic, social or political design perspectives (Westney 1999); imposition versus
borrowing (Ward 1999); actors pulling in and goodness of fit (de Jong, Lalenis and
Mamadouh 2002); and context-free or context-bound viewpoints (Elger and Smith 1994).
2176 R. James and R. Jones

Thus, Abo (1994) noted that transplanted organisations face a dilemma – on the one hand
they attempt to introduce superior elements of their system(s) to the maximum extent
possible (application), but on the other hand, they must modify those same systems in an
effort to adapt to local environmental conditions (adaptation). This is called the
application-adaptation dilemma model. Westney (1999) sees transplanted organisations as
representing any of three different design perspectives: strategic, social or political.
The strategic design sees organisations primarily as systems consciously constructed for
the efficient accomplishment of certain tasks; the social design sees organisations
primarily as ideational constructs defined by shared interpretations, meaning and value;
and the political design sees organisations as arenas for, and tools, of power and interests.
Ward (1999) stresses the two forces of imposition and borrowing – the former refers to the
parent nation as being the driving force, whilst the latter refers to the host nation as
being the driving force. De Jong et al. (2002) analyse the relative forces of ‘actors pulling
in’ (the amount of room for manoeuvrability possessed by local actors) and ‘goodness
of fit’ (the amount of neglect for the local situation). Finally, Elger and Smith (1994) stress
the balance between context-free and context-bound policies in the transplantation agenda
and call for more detailed examination of the historical and temporal dynamics of
diffusion and how elements of the corporate repertoire are selectively received, adapted
and deployed. The authors stress the need for more nuanced studies on the dynamics of
transference situations paying attention to the role of propagandists and mediators in the
process. It is against the background of this issue that the research question of this study
has been posed, namely ‘how has Toyota managed the process of transferring its cultural
paradigm into the different sociocultural context of India?’

Lean production and the Toyota cultural paradigm

TMC is widely regarded as the originator of the lean production system which is now
imitated across the globe by all other leading motor vehicle producers. The term ‘lean
production’ first appeared in the book The Machine that Changed the World according to
which:
Lean production is lean because it uses less of everything compared with mass production –
half the human effort in the factory, half the manufacturing space, half the investment in tools,
half the engineering hours, to develop a new product in half the time. Also, it requires keeping
far less than half the needed inventory on site, results in many fewer defects, and produces a
greater and ever-growing variety of products. (Womack, Jones and Roos 1990, p. 13)
Lean production centres around the relentless pursuit of the elimination of all non-value-
adding aspects within an organisation. Proponents of this philosophy refer to lean as being
synonymous with dramatic improvements in the performance of the system in areas including
productivity, quality and flexibility. The lean concept lends itself to two interpretations in the
literature. First, that lean production is an efficient, humanistic machine and that lean
(rational) organisations are ethical, with distributive justice flowing out of them. This
viewpoint is popular amongst managerialists, engineers, consultants and popular writers in an
apologist vein (for example Hummels and Leede 2000; Liker and Hoseus 2008). Second, that
lean production is a very sophisticated prison, and that lean manufacturing equals mean
manufacturing – a viewpoint popular amongst critical theorists (Kamata 1983; Parker and
Slaughter 1988; Parker and Slaughter 1994), who allude to it as a dehumanising system that
sacrifices human dignity and safety for productivity and commercial gains.
TPS was developed by the Vice-President of TMC, Taiichi Ohno, during the 1950s.
According to Ohno (1988), waste is attributable to seven sources, namely: over-
 The International Journal of Human Resource Management 2177

production, inventory, waiting, processing, motion, conveyancing and correcting. Waste

reduction is facilitated through the combined use of a wide range of tools and techniques.
He founded TPS on concepts designed to maximise flow, eliminate waste of all kinds and
ensure respect for people. The basis of the concept rests on efficient use of resources to
produce materials within a repetitive, reliable system. Non-value-adding physical activity
is eliminated from the system through the use of continuous improvement (kaizen),
automation and a multi-functional labour force. Also central to TPS and its successful
implementation is the role of teams, cooperative labour –management relations, careful
selection and training of workers, fewer hierarchical levels and providing workers with
authority to ensure safety and quality are not compromised. It was under Ohno’s guidance
and the effort of many others, particularly the company’s founder, Eiji Toyoda, that this
unique production system has become deeply rooted within TMC during the past half-
century. Various versions of the TPS training programme have been developed during
different stages, but the following have remained as the essential elements of TPS: just-in-
time production, jidoka, standardised work and kaizen (Moden 1983, 1998; Graham 1988;
Shigeo and Dillon 1989; Womack et al. 1990; Zaman 1993; Womack and Jones 1996).
According to Preece and Jones (2010) and several like-minded researchers (for
example Forrester 1995; Macduffie and Pil 1997; Delbridge 2003; Genaidy and
Karwowski 2003; Worley and Doolen 2006), a successful transition towards a lean system
involves a substantial change in direction, as compared with more traditional work
systems. HR-related developments under lean production include integration of conception
and execution of tasks within flexible cell-based production areas; devolved
responsibilities and empowerment to multifunctional team-based direct workers on the
workshop floor who take on many of the responsibilities that are the prerogative of
specialist support functions in traditional mass production (maintenance, simple repairs,
quality, indirect services); autonomation (automation with a human touch – stopping the
machines when there is a defect); all workers multi-skilled and multitasked; job rotation;
reduction in job classifications; fewer functional specialists; investment in the development
of people; continuous improvement and learning processes through quality circles and
suggestion schemes; group-based problem identification, resolution and implementation;
more lateral communication across functional boundaries; multi-directional information
systems; high trust; high commitment and a sense of obligation to the company.

The sociocultural context of lean manufacturing

The centrality of the role of Japanese cultural institutions to the growth and deployment of
lean systems is well documented in the literature (Sugimore, Kusunoki, Cho and
Uchikawa 1977; Womack and Jones 1996; Liu and Jones 2005; Jones, Betta and Latham
2009). These authors emphasise the role of the social context within which lean systems
operate and argue that the efficacy of the latter is dependent on the former. Recht and
Windorom (1998) contribute to this line of thinking by arguing that it is the Japanese
sociocultural environment that supports efficacious deployment of lean work practices
through factors such as constrained natural resources; a homogeneous culture; a single
language and religious background (which facilitates close familiarity between Japanese
people); family unity that extends itself into the larger community and workplace; and a
command-and-control culture involving obedience by subordinates of superiors’ orders
and directions. It would thus be a mistake to regard lean manufacturing as simply a set of
concepts, techniques and methods that can be implemented by management dictate. Spear
and Bowen (1999) found that TPS and the scientific methods that underpin it were not
2178 R. James and R. Jones

imposed on the workforce. The system grew naturally out of the workings of the company
over five decades, so that the thinking and behaviour of Toyota employees have been
moulded continuously by the developing norms of the company.
The interplay between the ideal lean environment and trade unionism is clarified by
Jones, Betta and Latham (2009) who claim that unitarist considerations are central to lean
systems. Such organisations see themselves as families characterised by high levels of
trust, commitment, involvement and concern for the company’s success, as a consequence
of pulling together in the same direction. As such, working groups with a differing agenda,
including external trade unions, are inconsistent with the environment of a lean system.
Trade unionism introduces an unnecessary form of pluralism and antagonism into the
system. Within a lean system, trade unions invariably take the form of an internal company
union (sometimes called sweetheart unions), although isolated exceptions are sometimes
observed in Toyota affiliates (most notably in India, Australia and at the former NUMMI
joint venture in the USA).

Methodology and data collection

Qualitative data were collected for this case study by the authors during three separate field
trips to India during the period 2008– 2011. In addition, data were also collected during a
field trip to Bangkok during 2009. Bangkok is the location of the Toyota Asia-Pacific
headquarters as well as hosting three large manufacturing plants in and around the city.
During these trips, a total of 31 personal interviews were conducted with a wide range of
respondents including the vice chairman of the joint venture company; three senior Indian
managers; two middle managers; the principal of the training institute; three union shop
stewards; two external trade union officials (both interviewed twice); a former senior
company executive; a long-term employee from the shop floor; eight business journalists
from local newspapers; two senior managers from a supplier company; an India-based
German senior executive in a rival company in the automobile industry; a senior Indian
academic; a senior trainer with Toyota Asia-Pacific, Bangkok; a senior manager with
Toyota Asia-Pacific, Bangkok; and a standardised work manager with Toyota Asia-
Pacific, Bangkok. All interviews were tape-recorded and transcribed and lasted between
30 minutes and two hours in length.
In addition, the authors visited the company’s corporate head offices and the marketing
division, as well as touring the production facilities and the training institute. During these
visits, personal observations were made and written up as field notes immediately
afterwards, thus adding to the database of qualitative information. Finally, the authors
conducted an Internet search using the keywords ‘Toyota Kirloskar Motors’. This revealed
a large amount of information that was downloaded and arranged into chronological order,
thus providing a longitudinal account of major developments at the company.
The data were analysed by carefully reading the transcribed interviews, field notes and
Internet documentation, and organising the data according to major themes as they
emerged from the analysis (Saldana 2009). This form of analysis is known as conceptual
ordering and defined as ‘the organization of data into discrete categories . . . and then
using description to elucidate those categories’ (Strauss and Corbin 1998, p. 19). As shown
below, three main themes emerged from our data analysis: industrial relations; decision-
making; and work ethics and motivation. These themes emerged through the technique of
open coding (Strauss and Corbin 1998) which involves fracturing the data into coded
concepts and ideas. Initially, the researchers identified over 200 codes. Some examples
included ‘political trade unions’, ‘protective labour laws’, ‘telling lies’, ‘suppression of
 The International Journal of Human Resource Management 2179

Indian managers’, ‘family relationships’ and ‘time laxity’. By grouping similar codes
together into sub-categories and constantly comparing all sub-categories with one another,
it was possible to merge them into progressively smaller categories for the purpose of
descriptive elucidation. Thus, by way of illustration, the category of industrial relations
contained ‘political trade unions’ and ‘protective labour laws’, amongst others; the
category of decision-making contained ‘telling lies’ and ‘suppression of Indian managers’,
amongst others; and the category of work ethics and motivation contained ‘family
relationships’ and ‘time laxity’, amongst others.
As with all qualitative analysis, such categorisations represent the end result of an
interpretative process between the data itself and the unique attributes of the research
analysts. For this reason, Guba and Lincoln (1981) recommend that researchers give an
account of themselves and their backgrounds so that readers can understand the nature of
any potential researcher bias. The first author is of Indian cultural heritage, born and
educated in India, but now a global citizen resident in Australia. The second author is of
English heritage, born and educated in England, but now a resident in Australia and a
specialist in qualitative methodology. Between them, they performed all the interpretation
and analysis in this research study, working separately much of the time, but coming
together at frequent intervals to find overall consensus. The different backgrounds,
experience and skills of the two researchers provided contrasting lenses through which the
data could be analysed and interpreted.
The researchers spent a prolonged time in the field, spread over three years, and
involving three separate trips to India and one to Bangkok. The concept of theoretical
sampling (Strauss and Corbin 1998) was employed whereby data were analysed on an
ongoing basis and emergent themes were used as the basis for further interviews. Thus,
during the first trip to India, very broad questions were presented to participants such as
‘tell me about the issues involved in transferring the Toyota process into India’. As themes
emerged from the analysis, these were checked against data from subsequent interviewees,
who also provided additional richer data which, in turn, provided further themes which
were checked and expanded upon by subsequent interviewees. In effect, this approach
allowed the researchers to conduct continuous member checking whereby participants
were able to verify (or not) emerging themes whilst constantly adding to the richness and
depth of the data. At the end of the study, we were invited to the home of a long-serving
Indian manager at the plant who had recently moved to another company. We spent
several hours with him during which we shared our analysis and conclusions and were
gratified to find that he concurred with our findings. It is noticeable that as the interviews
progressed, the questions we asked became increasingly narrower and more focused as we
sought out denser data from the participants. For instance, we asked for illustrations of
particular examples of significant themes, such as ‘can you give us specific examples of
how Indian managers were suppressed in the decision-making process?’ and ‘how did
Japanese managers react to the political demands of the external trade union?’.
Lincoln and Guba (1985, p. 290) ask ‘how can an inquirer persuade his or her audience
(including self) that the findings of an inquiry are worth paying attention to, worth taking
account of?’ With specific reference to case study analysis, Stake (1995, p. 107) asks
researchers to ponder questions such as ‘do we have it right?’, ‘are we generating a
comprehensive and accurate description?’ and ‘are we developing the interpretations we
want?’ In this respect, concepts of reliability and validity are critical. Reliability refers to
concepts such as dependability, stability, consistency and predictability (Lincoln and
Guba 1985, p. 290). Yin (1994, p. 36) states that ‘if a later investigator followed exactly
the same procedures as described by an earlier investigator and conducted the same case
2180 R. James and R. Jones

study all over again, the later investigator should arrive at the same findings and
conclusions’. Thus, the general way of approaching the reliability problem in a case study
analysis is to carefully document the procedures and operational steps so that the case
study can be repeated. Lincoln and Guba (1985, p. 317) refer to this as an ‘inquiry audit’
relating to both the process and product of the analysis. Validity refers to ‘judgements
about whether you are measuring or explaining what you claim to be measuring or
explaining’ (Mason 1996, p. 146). In the words of Lincoln and Guba (1985, p. 301) it is
important for researchers to utilise activities ‘that make it more likely that credible
findings and interpretations will be produced’. Such activities include prolonged
engagement, peer debriefing, participant checking and triangulation of multiple data
sources.
In this case study. we have attempted to ensure reliability by carefully explaining the
procedures and operational steps we undertook in the form of conceptual ordering, open
coding, theoretical sampling and types of questioning, in order to lay out a clear inquiry
audit. We have also attempted to ensure validity by detailing our prolonged engagement in
the field (three years and four separate trips), our process of peer debriefing between the
two researchers in order to encourage reflexivity and debate, the ongoing process of
participant checking of findings and interpretations through theoretical sampling and a
final member check, and triangulation between three different sources of data (interviews,
documentation and personal observations).

Findings: from Toyota Production System to Toyota Indian Production System

A significant finding of this paper is that the transference of the Toyota Way and TPS into
India has been beset by problems. This has necessitated considerable adaptation by TKM
involving significant human resource management changes. These problems emanate
from incongruence between the vagaries of the Indian context and the particular
requirements of the Toyota Way and TPS. The extent of this incongruence was not
anticipated by TKM at the commencement of operations in India, and the company was
slow to learn from the difficulties it experienced during the early days.
TMC commenced production in India in 1999 through the vehicle of a joint venture
company called TKM. High aspirations were held of capturing 10% of the market by 2010
(Bhatnagar 2006). This failed to materialise. Strikes, lockouts and industrial unrest have
punctuated most of its decade-long experience. Market share in 2006 was only 2.5%, with
no signs of the target being met. A statement from the managing director at the end of 2006
that the company ‘was in the process of studying how to grow in the Indian market’
(Tribune 2006) seemed to indicate the company’s lack of certainty about its knowledge of
Indian conditions. In 2008, the most senior Indian executive at TKM abruptly parted ways
with the company after many years with the company. Soon after, a new Japanese
Managing Director, Hiroshi Nakagawa, was appointed, who immediately announced that
the objective of achieving a 10% market share had been put back from 2010 to 2015,
admitting that ‘we did not have much experience in the past ten years; now is the time for
us to jumpstart’ (Business Line 2008). Other TKM executives soon started to adopt the
same rhetoric, so that the new slogan of a jumpstart decade for the company quickly
became ubiquitous (Financial Express 2008).
In the face of such problems, the company was forced to rethink its entire process of
doing business in India. Commencing as from 2007 –2008, and with its market share still
hovering stubbornly around the 2 –3% level, the company has undertaken a progressive
series of measures that have seriously compromised its pure TPS philosophy. In an attempt
 The International Journal of Human Resource Management 2181

to reconcile its approach with those of Indian cultural and societal norms, the system of
TPS has now (unofficially) been transformed to Toyota Indian Production System (TIPS).
As earlier discussed, the system of TPS was developed within the unique culture and
context of Japan. This ideal environment, however, is not experienced within India and the
argument can be advanced that several crucial aspects of Indian social and cultural mores
appear to clash dramatically with the requirements for TPS. India is an extremely
heterogeneous country. It represents a multi-cultural, multi-ethnic, multi-religious, and
multi-linguistic federation of many different states, which collectively impact upon the
complexity of social and cultural values, work practices and human resource management
to be found in India (Jain 1987; Sinha and Sinha 1990; Tripathi 1990; Schwartz 1999;
Budhwar 2003; Becker-Ritterspach 2005; Chatterjee 2007; Gupta 2008). By analysing the
data obtained from respondent interviews, field notes and documentation at TKM, three
major themes emerged which demarcated the difference between the Japanese and Indian
work context: industrial relations; decision-making; and work ethics and motivation.
These themes are discussed below.
Industrial relations: Whilst Japanese companies stress enterprise-level (company)
unions that operate in an atmosphere of cooperation with management within a unitarist
culture, Indian companies stress external unions, often affiliated to political parties, which
operate in an atmosphere of confrontation with management within a pluralist culture.
Managing union – management relations in India, especially for overseas-headquartered
companies, can often be a trying experience. The structure of unions, and their tendency to
affiliate with larger political organisations, allows for plant-level people issues, if
mismanaged, to escalate into national issues, at times even necessitating federal
government intervention.
In addition, TPS is associated with the concept of demand-driven flexible production
and flexible labour organisation enabling workers to be hired and fired to facilitate
levelling of production. This flexibility caters to the need to eliminate all forms of waste
and explains the large numbers of temporary or contract workers usually employed in lean
systems. However, this requirement is inconsistent with the existence of inflexible labour
laws that have traditionally dominated the Indian industrial relations scene under which
workers are assured of long-term, permanent employment. Indian labour laws have
traditionally been highly protective of labour, and labour markets have been relatively
inflexible. Multinational companies such as TKM have sought labour market flexibility
which has invariably translated into precarious working conditions in such companies.
Attempts to dismantle labour laws relating to retrenchment, closure, contract workers and
collective labour activities have met with severe opposition from organised labour.
With respect to TKM, industrial relations problems dogged the company almost as
soon as it commenced operations in Bangalore. The company refused to recognise an
external trade union, underestimated the power and influence wielded by trade unions in
India and failed to understand their structure, dynamics, political and community linkages,
and constitutional and legal standing. The fast pace of work within the factory, lack of job
security and disagreements over the operation of the performance appraisal system led to
immediate demands from workers for the company to recognise an external trade union.
TKM resisted these demands and attempted to establish an internal company union as a
substitute. Attempts to suppress pluralist tendencies organic to the Indian workforce
through an anti-union stance and attempts to achieve flexible production outcomes in the
absence of cooperative labour – management relations led to a progressive deterioration in
the overall industrial relations climate. Strikes occurred in 2001, 2002 and 2004. Workers
were dismissed or suspended, with union agitators in particular targeted for disciplinary
2182 R. James and R. Jones

action. This situation eventually resulted in a strike and lockout during 2006 in association
with a bitter community campaign against TKM in Bangalore. Workers occupied the
factory and threatened to commit suicide after they had entered the LPG area and warned
that they would ignite the gas cylinders. Other workers were arrested after they
demonstrated outside the factory and in the streets of the city.
Decision-making: The concepts of education, communication, consultation,
participation, involvement, empowerment, facilitation and support are all evident within
the Japanese (Ringi) system of group-oriented, consensus-seeking decision-making,
designed to integrate worker and company interests. Group work and cohesion are
stressed. Responsibility is delegated to groups to perform and design tasks, identify
problems, make improvements and monitor quality. Exploring and learning together
between managers, supervisors and employees is a critical objective. On the other hand,
one of the more pervasive attributes of Indian workers is that they are socialised to be
servile to their superiors whilst displaying an arrogant attitude towards subordinates
(Bhadury 1991). This context has a strong impact on the nature of decision-making. Indian
companies prefer centralised decision-making, emphasising bureaucratic and hierarchical
relationships between different groups. There tends to be limited delegation and tight
controls. Decisions are made by authority figures, often surrounded by strict secrecy (Jain
1987). The common style of leadership is paternalism, invariably exhibited by superiors
who are older, more experienced and ‘wiser’, and is concerned with guidance, protection,
nurturance and care towards the subordinate. In return, the subordinate offers deference,
loyalty and respect to the superior. Excessive use of bureaucracy exists within Indian
industrial organisations.
With respect to TKM, management failure to recognise the nature of decision-making
led to a series of misunderstandings. Non-hierarchical, consensus decision-making in the
form of concepts such as quality circles and continuous improvement (kaizen) did not
come easily or naturally to Indian workers who expected their superiors to be responsible
for making such decisions. There is a strong tendency for Indian workers to always want to
please their boss, and this often results in such workers reporting that they have no
problems or that their work is on track when in actuality they may be suffering severe
problems in understanding or application. This Indian cultural habit was often
misinterpreted by Japanese managers and trainers who regarded such behaviour as
dishonesty or telling lies. The paternalistic nature of traditional Indian workplaces resulted
in management painstakingly explaining to workers what was to be done and how it was to
be completed, following which workers were expected to comply with these instructions.
The TKM approach, however, stressed adherence to the Toyota Way and TPS, and this
one-best-way approach was inculcated into the Indian workforce. However, a senior
Indian manager in the plant observed that the ubiquitous use of the term ‘The Toyota Way’
during training sessions and team leader briefings was construed as ‘a convenient cover-up
for a lack of knowledge on various matters and an inability to explain finer details as and
when required’:
So when somebody comes along and says ‘no’ I expect you to work like this and like that then
he does not appreciate that, but if you tell him that there are reasons why I expect you to do it,
and as a result what will happen to you, you will get this benefit and that benefit, then you can
start connecting with that individual, so it is a learning process for the Japanese.’ (Interview
with senior manager).
This was compounded by the fact that the concept of ‘one-best-way’ is not well understood
or practiced in Indian society. Because of the shortage of resources, Indians have become
adept at ‘making do’ by a variety of means. There are many ways to solve a problem and as
 The International Journal of Human Resource Management 2183

long as the solution works, that is considered acceptable. This approach is known as
‘jugaad’ – quick, alternative ways to approach a difficult situation. Such an approach is
anathema to the Japanese concept of standardised work.
An endemic feature of TKM human resource management practices was the refusal of
Japanese managers to give any credence to Indian managers in the plant. There is evidence
that only lip service was paid to any expertise that such managers may have possessed.
One senior Indian executive in particular had stayed with TKM from its early days in 1999
but eventually left the company after 10 years, disgruntled by the treatment he had
received from Japanese managers. A senior industrial journalist commented that this was
an open secret amongst people associated with the plant:
He told me, and these are only allegations, that the Japanese did not trust senior managers
from India, there was this basic mistrust, how they tried to impose certain things on the people
of Indian origin, he had all these kind of issues, and he left in a huff. (Interview with senior
industrial journalist)
Work ethics and motivation: The concepts of loyalty and identification with the company
are stressed in Japanese systems, accompanied by devotion to one’s work. However, in
Indian culture, loyalty to one’s family is the main priority. Employees are oriented more
towards personalised relationships than productivity (Gupta 2008). Motivational tools in
Indian companies are less oriented to increases in productivity, cost reductions or quality
improvements; rather they emphasise social, interpersonal and even spiritual relationships
with one’s colleagues. Respondents referred to such factors as the importance of the
family and respect for age and hierarchy. Indians were described as informal, emotional,
sensitive and with a lack of discipline in relation to the necessities of industrial life, such as
the requirements to be punctual, precise, measured and systematic. One Indian manager
commented: ‘there is no discipline built into the Indian psyche – we are more emotionally
involved with people rather than having a very business-like approach’. All of these
factors ran counter to the needs of an environment conducive to the successful
implementation of TPS.
With respect to TKM, it took many years before company management was able to
come to grips with the unique nature of Indian work ethics and motivation. Whereas
Japanese workers are extremely time conscious, the concept of timeliness is less well
understood or appreciated within the Indian context. One respondent noted: ‘if you take a
bus in Japan then 8.45 means 8.45, it does not mean 8.44 or 8.46, but when we Indians say
8.45 it could mean 8.40 or 8.50, we are pretty lax’ (interview with senior Indian TKM
manager). The unpreparedness and lack of planning of many workers in India were also
remarked on by the same manager by using an analogy of an Indian plumber attending
your home to fix a leaky tap:
You ask for the plumber to come, and he gives you a time but he won’t show up, or maybe he
will show up two hours later, but then he will not come with all the tools of his trade, and then
he will ask you for sandpaper, it’s not that he comes and you let him in and show him the tap
leaking and he does his job and goes away – it does not work like that in India. Now our
friends from Japan come here and they expect things to be different and it’s a source of
frustration for the Japanese and I can understand that. And they say ‘what kind of a country is
this’ and I have to stop them and tell them that ‘we know what kind of country it is, but you
don’t......if it was like Japan then we don’t need you to come here and set up a car plant’.
(Interview with senior Indian TKM manager)
The hard, disciplined and relentless pace of industrial work within TKM was a cultural
shock that the young and inexperienced workforce found difficult to adapt to. Union
sources described TKM as ‘a nazi camp’ (interview with external union organiser).
2184 R. James and R. Jones

The usual practice in traditional Indian workplaces was for workers to complete assigned
tasks in their own time, whilst attending to other social needs during work hours.
To compensate, they would often volunteer to work overtime with no extra pay. TKM
management, however, failed to understand this need of Indian workers to simultaneously
address work and social needs. Work hours were fixed, with little time to escape from the
line, except during stipulated breaks. Accordingly, Indian workers were viewed as slack
and undisciplined. This attitude often resulted in frustration when Japanese managers and
trainers would abuse and shout at workers. In one incident, a trainer snatched a cap from a
worker’s head and threw it to the floor whilst shouting ‘you Indians!’ Strained relations
were also caused when Indian workers refused to clean their work areas or mop the floor.
Such attention to detail and cleanliness is a vital part of TPS. However, such menial work
is regarded as degrading for Indian men to perform. Such work is deemed to be women’s
work or else to be performed by lower caste workers (dalits).
The evidence presented above suggests that the magnitude of TKM’s failure to
understand and appreciate the subtleties, nuances and major sociocultural and
environmental factors in India led to considerable dissonance between Indian workers
and TKM management. TKM was at a loss to understand people issues within the plant
and the sociocultural issues in the region. The company never expected to encounter the
number of pitfalls it did, or the extent of learning (and unlearning) it would need to
undergo in India. A senior Indian manager stated that despite making an excellent product,
TKM management ‘displayed poor people skills’ within the Indian context – ‘they have to
get used to how we do things here and it takes time for them to do that’. The new rhetoric
of a ‘jumpstart decade’ was only adopted from 2008 with the appointment of a new
Japanese managing director. The miscalculation made by TKM of the time needed to
adapt to Indian conditions was emphasised by a senior manager: ‘I think a decade was not
in their mind . . . with industrial relations I think they realised that India needs more time’.
When TKM commenced operations in Bangalore in 1999, its workforce was primarily
composed of young men drawn from the surrounding villages. Such workers were
inexperienced in industrial work, being more familiar with the kinship nature of
agricultural work. In such socially determined work organisations, the nature of family
roles largely prescribes work structures. Because work organisation is closely tied up with
the social setting, such organisations tend to suffer from low levels of efficiency,
effectiveness and innovative capacity. They also tend to be extremely stable, thus making
the transition to industrial and production-determined work organisations very difficult
(Udy 1970). Such a transition would involve disengagement from the social setting. Udy
(1970) suggests that such a process would encompass an initial move to contractually
based work, reinforced by a subsequent three-stage process involving employer-specific
contracts, job-specific contracts and occupationally based contracts. External conditions
can play a critical role in this process and in particular the timing of such external
interventions. Premature arrival may turn what otherwise may have been positive external
influences into negative ones.
In the case of TKM, it could be argued that the entry of the company in 1999
constituted a premature arrival with initial negative ramifications. The (socially
determined) workforce was not in a state of readiness, and significant human resource
management adaptations would have to be undertaken to facilitate the transition to a
(production-determined) workforce. After many years of industrial unrest, a flashpoint
was reached in 2006 involving a strike, violence, community agitation and a subsequent
lockout initiated by TKM management. This event turned out to be epiphanous within
TKM’s history, following which the company recognised the trade union and commenced
 The International Journal of Human Resource Management 2185

negotiations with it in an attempt to secure industrial harmony. A senior industrial

journalist commented that ‘they realised after a period of time that they needed an
emotional touch for the labour’. This was confirmed by a senior Indian executive in 2011
who stated that many issues were now being developed in TKM, working with, and not
against, the Indian mind: ‘they are working as per our requirements by understanding
Indian minds, Indian ways of working, so some of us are very closely involved in that
programme’. As part of this reconciliation, changes were effected to the standard TPS
approach in order to make it more compatible with the Indian context. According to a
union shop steward at the plant, ‘TPS has been transformed into TIPS’. The main features
of this remodelled system are discussed below.
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. These workers were subsequently elected to senior union positions within the
plant. A policy was instituted of negotiating wages, working conditions and production
issues with the union. In 2011, 10 permanent and full-time union officials operated in the
plant with no duties other than union issues and paid by the company. TKM management
accepted that union officials could consult outside the plant with the Centre of Indian
Trade Unions during working hours on full pay. However, outside officials are not allowed
inside the plant, nor can they take part directly in negotiations with TKM management.
Substantial wage increases: TKM workers secured substantial increases in their pay,
elevating them to the second highest-paying manufacturing organisation in Bangalore.
This was achieved despite a 30% reduction in TKM production during 2009.
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. Simultaneously, Japanese
trainers and managers were moved into the background to occupy only advisory and
coordination positions.
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 in
2008 who was generally perceived to be more union and worker empathetic (through
strong grass-roots experience) than his two former colleagues at this level, both of whom
were perceived to lack credibility and were linked with mishandling previous events
within the company.
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
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. Social, relationship and
family needs should be accorded a similar consideration as production-related needs.
Elsewhere in Toyota’s operations, increased production has invariably implied increased
takt times with an unchanged number of line workers, resulting in intensification of work
and greater worker stress.

Discussion and conclusion

Based upon significant studies from the transplantation literature reviewed earlier in the
paper, several key summary points can be advanced.
2186 R. James and R. Jones

. Institutional diffusion can be either imposed or borrowed. The relative strengths of

donor and host nations must be assessed. Innovations are often hybrid, in the sense
that they borrow aspects from both the donor and host environments (Ward 1999).
. Successful transplantation adjustments should take cognisance of two aspects:
leaving room for local actors to manoeuvre (actors pulling in) and making careful
choices with the characteristics of the host country in mind (goodness of fit) (de
Jong et al. 2002).
. Production and management systems cannot be transferred across national
boundaries without considerable difficulty. The importance of place has an enduring
quality. Friction and strained relationships create dynamism between the integration
logic of parent companies and the localisation logic of subsidiaries, forcing systems
to undergo some degree of revision. This can be referred to as the application-
adaptation dilemma (Abo 1994).
. Greater insight can be obtained into the processes of hybridisation by regarding an
organisation as the simultaneous embodiment of a strategic design, a social
construct and a political entity (Westney 1999).
. The dichotomy between the concepts of context-free and context-based is
needlessly dualistic. The relative forces of shaping, and being shaped by, are critical
in this dynamic. However, merely stating that each transfer is a unique creative and
adaptive process does not take us very far. We need to go beyond this by analysing
more clearly those mediating practices of agents who select, interpret, codify and
manage the innovating diffusion. Studies should concentrate on case studies in
developing and developed nations paying attention to enterprise, sectoral, regional
and temporal contingencies (Elger and Smith 1994).

This paper has analysed the difficulties experienced by the TMC in attempting to transfer
its lean cultural paradigm into its Indian affiliate company, TKM, over the period since 1999.
Qualitative data have been collected from a number of sources, including personal interviews,
field visits and documentation, and analysed by means of conceptual ordering through
thematic categorisation. Three themes emerged from the data: industrial relations; decision-
making; and work ethics and motivation. The paper finds that these three themes
problematised the transfer of the Toyota paradigm into India. TKM misread the Indian
cultural and social environment, and mishandled its people management portfolio, despite
bringing new technology and a superior product into the country. This lack of adaptation
caused many years of industrial unrest. Eventually, TKM was forced to compromise and adapt
its beliefs and practices to become more accommodating of the local context.
At TKM, an authoritarian imposition (Ward 1999) was attempted from the outset.
Employing Abo’s (1994) concept of ‘application’, we hypothesise that this approach was
adopted because of the issue of hubris of success, in the sense that at the time of entry into
India in 1999 TMC was riding the wave of international success in terms of market share
and managerial confidence in its corporate paradigm. Combined with its own inherent
ethnocentric disposition, this comprised a compelling mixture of factors. Any attempts at
accommodating or compromising on differences were only observed when the company
was forced into a corner by contextual pressures. These pressures arose from sociocultural
differences relating to industrial relations, decision-making, and work ethics and
motivation. Key propagandists (Elger and Smith 1994) in this pressure were the organised
labour movement and community opposition. In other words, the authoritarian imposition
was subsequently modified to a ‘contested’ imposition, and eventually into a ‘negotiated’
imposition as TKM responded to organisational resistance by means of a negotiated
 The International Journal of Human Resource Management 2187

Processual movement from authoritarian to negotiated imposition

Stage 1: Toyota Way + Toyota Production System

Authoritarian imposition (Ward, 1999)

Application (Abo, 1994)

Strategic design (Westney, 1999)

Context-free (Elger and Smith, 1994)

Reasons: Japanese ethnocentrism + hubris of success

Propagandist agents

Organised labour; community opposition

Stage 2: Contested imposition (resistance)

Reasons:Cross-cultural differences regarding: industrial

relations, decision making, and work ethics and motivation

Mediating agents

New Japanese MD; newly-elected shop stewards;

newly-appointed senior Indian managers

Stage 3: Toyota Indian Production System

Negotiated imposition (Ward, 1999)

Adaptation (Abo, 1994)

Social and political design (Westney, 1999)

Context-bound (Elger and Smith, 1994)

Comprising: New HRM policies more accommodative of

social, cultural, and political factors

Figure 1. Processual movement from authoritarian to negotiated imposition.

compromise process involving the movement from TPS to TIPS. Key mediators (Elger
and Smith 1994) in this process were the new Japanese managing director, newly
appointed senior Indian managers and the newly elected union shop stewards. In addition,
Westney’s (1999) concepts of strategic, social and political designs emphasise the
importance of transplant agents adopting a multi-framed approach. It is argued that TKM’s
attempt to seamlessly transplant a system from one context to another ran the risk of only
2188 R. James and R. Jones

viewing the world through the lens of strategic design, thus ignoring the veracity of both
the social and political frames. In the Indian context, we have seen that social, cultural and
political factors cannot be divorced from workplace realities. It is the incorporation of
these issues into the essence of the negotiated compromise of TIPS that has ensured a more
cooperative climate within TKM since 2007. This dynamic process involving a movement
from authoritarian imposition, through contested imposition, to negotiated imposition is
summarised in Figure 1.
Three important implications flow from the findings of the paper. First, we have
extended the work of Udy (1970) by suggesting the types of human resource management
adaptations that could be undertaken when an external intervention (in this case the entry
of a lean Japanese organisation into India) intrudes prematurely into the transition from
socially determined to production-determined work organisations. Second, any attempt to
regard the lean system as a set of practices and technical objects, devoid of context, that
can be divorced from cultural and historical issues, should be resisted. Third, this
argument implies that the paradigm is not easily amenable to transference anywhere in the
world. When transferred overseas, the efficacy of the paradigm is contingent upon
the unique cultural, social, historical and environmental factors peculiar to the host
country. Environments with unitarist leanings, characterised by union-free culturally
homogeneous settings, are most conducive to successful implementation of lean cultural
systems. Conversely, countries with strong pluralistic inclinations and with strong
traditions of unionism, such as India, are not naturally amenable to adaptation of the
system. In such situations, trust and commitment are usually replaced by suspicion and
resistance unless specific actions are taken by management to alleviate such tendencies.
One of the lessons learned by TKM was that any successful implementation of the system
in India would depend upon a compromise of the pure system espoused by the Toyota Way
and TPS, and this was eventually achieved through the negotiated introduction of the TIPS
and a new jumpstart decade after many years of industrial relations turmoil. In the absence
of such negotiated compromises, the transference of lean systems into other sociocultural
environments will probably encounter problematic outcomes.
One of the limitations of this research study is that it analyses a single case study of one
lean Japanese company in a specific industry at a single site in India. Several possibilities
exist for other researchers to extend these boundaries. For example, other lean companies
could be studied in India, either in the automobile industry or in other industries. One
suggestion would be an analysis of the Suzuki joint venture with the Indian company
Maruti, situated at Manesar near Delhi, which during 2012 has also suffered similar labour
difficulties to Toyota and would provide a comparative exercise for extending the findings
of the present study.

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