Section 2. 50th Anniversary and Coping with the Strong Yen

Item 3. Organizational and Personnel System Reform

Promoting organizational flattening

The new organization flattening system eliminated sub-sections and combined multiple sections into single departments, establishing a simpler, two-level organization consisting of divisions and departments. It also eliminated positions that increased the number of organizational layers, such as deput general managers and assistant section chiefs, and organization heads, such as, divisional general managers, departmental general managers, and staff leaders were redefined as one-person managerial positions. Simultaneously, non-managerial positions such as project general manager and project manager were redefined as staff positions. As a result, the number of organizations at the section level decreased from 758 to 629 and the number of decision-making managerial positions, such as section mangers and divisional general managers, decreased from 1,800 to 900, with the remaining 900 placed in staff positions providing practical support. However, out of consideration for these employees, the Job Qualification System introduced in 1987 was revised, giving them titles that were closer to their actual positions. For example, "Sanji 1" and "Sanji 2" were renamed "General Manager Class" and "Deputy General Manager Class", respectively. In conjunction with this organizational flattening, TMC initiated the San Tsuke Campaign, which promoted the practice of referring to managers using the Japanese honorific "san" after their names, rather than their positional title (which is the convention traditionally followed at many Japanese companies), with the intention of making the atmosphere within the company more open and fully establishing the reform at the working level first.

To build a foundation for the organizational flattening that was to come, TMC intiated the Hanko Mitsu Campaign in 1988, ahead of the introduction of the new system. The campaign was meant to accelerate decision making and promote delegation of authority. As a rule, it reduced the number of hanko (seals) required before a proposal was approved to three-that of the originator, the examiner, and the verifier. All approval documents and reports were reexamined and within one year approximately 70 percent of approval documents was changed to require only three hanko or less.

After organizational flattening was implemented in the Administration Group and Engineering Group, the reform focus moved to initiatives to connect the new organizational structure to business innovations. Between April 1991 and the end of 1992, TMC implemented the NOW21 (New Office Way 21) initiative, targeting approximately 7,000 employees in 78 sections in the Management Group and Sales Operations Group. With the help of a secretariat composed of nine young employee volunteers, each section chose its own theme under the slogan of "Changing, Changing Your Surroundings, for Our Own Sake" and worked to create a lively work culture and improve the quality of internal work on a grassroots level.

After addressing the Administration and Engineering Groups, TMC introduced a new personnel system for the shop floor staff in February 1991. This was because problems such as organizational fragmentation, bloating, and a titled position shortage were expected to occur in the technical workplace as well. The new system created a new level of "professional skilled staff". The assistant manager, group leader, and team leader positions were renamed "professional skilled staff chief expert", "professional skilled staff senior expert", and "professional skilled staff expert" respectively, while retaining the same managerial and supervisory duties.

Simultaneously with the introduction of the professional skilled staff TMC also established the Toyota Skill Development System as part of its efforts to build an environment that fostered self-development and a sense of achievement from work. It went into operation as a certification system that encouraged employees to develop technical knowledge and skills to allow them to do a broader range of work while undergoing on-the-job training and job rotation. Subsequently, TMC continued to revise the personnel system for shop floor staff, and in January 1997 abolished the hitherto team leader system and changed the assistant manager and group leader positions to chief leader and group leader (a change from the Japanese name used previously), respectively.

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