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system (Fujimoto 1999, p. 264). These learning mechanisms observed
by Fujimoto are aligned with Toyota s meta-routine of self-testing and
adaptation. Similarly, the rule that workers could stop the lines when JIT
production became in danger or when other problems occurred, which
was introduced in the engine shop in 1950 (Cusumano 1985, p. 280),
can be considered to have helped to sustain the application of Toyota s
routine of self-testing and adaptation.
The meta-routine of Toyota originating from Sakichi Toyoda is still
identifiable. Two authors claim that four rules form the DNA of TPS;
they all prescribe that activities, connections and flow paths have built-
in tests to signal problems automatically (Spear and Bowen 1999, p. 98).
Stated otherwise, this DNA implies integration of problem identification
and problem solving procedures into the actual work processes (Towill
2007, p. 3620). As late as the mid-1980s, Toyota s efforts in continu-
ously improving operations were still more oriented to the organization
of processes than Nissan s stronger focus on machines and equipment
(Totsuka 1995; Nohara 1999, p. 38; Fujimoto 1999, p. 69). Typically, after
a high-tech solution implemented in its Tahara plant in 1991 resulted in
only marginal savings in labour, Toyota decided to use relatively simple
machinery again in its green-field Kyushi plant from 1992 (Benders and
Morita 2004, pp. 435, 438). Toyota s experiment with high-tech followed
a change of circumstances during the 1980s. Mounting criticism of the
demanding nature of working under lean production conditions, short-
age of workers and technical difficulties in production (Nohara 1999,
p. 39) forced Toyota to reconsider its production system (Benders and
Morita 2004; Hampson 1999; Nohara 1999). This implied that in some
Path Dependence, Initial Conditions and Routines 109
factories, Toyota explicitly began to accept the necessity of buffer stocks,
not such a revolutionary change as it might seem since zero-inventories
have never been a core element of TPS (see also Pil and Fujimoto 2007).
8.7 Discussion
The re-examination of such an extensively researched subject as the
development of the Toyota Production System shows how difficult it
can be to pinpoint initial conditions and assess their individual influ-
ence. In an organizational context this is further complicated by the
difficulty of separating initial conditions and lock-in mechanisms. A pro-
duction system such as TPS does not fall like manna from the heavens,
but is as complex a creation as organizations are multi-faceted. Initial
conditions are complex and interlocking, not only in regard to their
contents, but also in their timing. Factors that have frequently been
seen as the major initial conditions low and fragmented demand,
scarcity of raw materials, and/or a general fashion of avoiding waste
originating from the Japanese wartime economy upon closer exami-
nation do not significantly explain the emergence of TPS right after the
Second World War. From among the three elements to be theoretically
distinguished as initial conditions for paths of organization change
environmental requirements, resources and value or philosophies
while the first two undoubtedly constrained choice, it is arguable that
Toyota s specific philosophy was the major imprinting force.
This indicates that the initial conditions as assessed at a certain point
of time may themselves have a history that is relevant for a proper
path dependence perspective. Our analysis shows how the philosophy
expressed in a meta-routine of self-testing and adaptation at Toyota
Motor Company emerged before the firm itself had been set up. The
meta-routine at Toyota itself resulted from a path dependent process
related to the idiosyncratic experiences and approaches developed by the
first generations of (family) managers. It has had a profound and last-
ing influence on its production system. I argue in this chapter that meta
routines both initially select phenomena and exert a lock-in influence
thereafter by ascertaining diffusion of the chosen form and by steering
search and selection processes that determine how solutions to occurring
problems are developed and implemented. Toyota s meta-routine did
not make the development of TPS inevitable, only a much more salient
choice. The meta-routine has inspired the development and use of more
mundane routines, such as multi-machine operating. In addition, the
typical path dependence element of a specific sequence of events, put in
110 Institutions, Communication and Values
motion by a overstocking and liquidity crisis in 1949, was important for
locking-in Toyota to the path it had entered only shortly before. A combi-
nation of a separation of production and sales activities into two distinct
firms, reducing the labour force and a sudden boom in demand resonated
with a still infant system suited to lean, demand-induced production.
The Toyota meta-routine was perpetuated in particular through the
extensive and systematic use of formal documentation of factory experi-
ences introduced by founder Kiichiro Toyoda and the consistent support
by Toyota top management of the innovations of Taiichi Ohno. Other
car makers, both domestic and foreign, could imitate Toyota s system-
atic reliance on testing as well as specific JIT elements, but could match
less well the underlying commitment and rigour in implementation:
What Toyota could do better than its rivals seems to be not so much
rational calculations before the trials as systematization and institution-
alization after the trials (Fujimoto 1995, p. 212, italics in original).
Toyota s meta-routine was important in continuing its dedication to a
production system characterized by small lot sizes and multi-purpose
machines, despite the disappearance of financial bottlenecks in the 1960s
(Grønning 1997, p. 428). Some even sense an ideology at work: The
insistence of the Japanese assemblers on the reproduction of the just-in-
time system worked against profits in the short run, since it made the
expense of international expansion ever so much greater (Schwartz and
Fish 1998, p. 66). It is interesting to contrast this with the large Detroit
car makers, who abandoned an early JIT type of production system from
the late 1930s since they no longer considered it the best cost-reducing
device (Schwartz and Fish 1998, p. 66).
This explanation heavily reliant as it is on a firm-specific meta-
routine interacting with sequences of events has its limitations. The
effects of meta-routines on factory practices cannot be directly observed
in a study based on secondary sources. I focused on the most salient
meta-routine identifiable in the secondary literature. The development
of TPS was influenced from many different directions (Fujimoto 1999),
and I have not focused on other possibly relevant meta-routines, either
specific to Toyota or more widespread in Japanese business. What is
more, the self-testing and adaptation orientation did not prevent Toy-
ota from prematurely introducing defective models on the market up to
the early 1960s, in particular several versions of the Corona (Togo and
Wartman 1993).
Nonetheless, dedication to its meta-routine differentiated Toyota from
its main domestic competitor, Nissan, not only in regards to the internal
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