April 10, 2006

Detroit v. Toyota

Harvard Business School professor Kent Bowen is a technology and operations management expert. Here’s his take on the struggling auto industry:

“Detroit has hobbled itself in two notable ways: Labor agreements, financially generous but tightly circumscribed regarding worker activity, have hindered innovative uses of the workforce, while in the executive suites, conventional wisdom mistakenly has held that sheer corporate size could ensure industry dominance."

"Toyota, shunning these approaches, took advantage of this Detroit ‘blind spot.’ While less generous in its compensation packages for workers, Toyota strives to use its labor force in flexible, creative, and collaborative ways,"

Bowen does raise an important concern about Toyota’s future. It’s biggest worry:

"… is getting too big, too fast, which they feel would make it hard to find enough good managers, thereby jeopardizing the company's legendary quality."


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