Reinventing Organizational Culture Across International Boundaries

 Researchers who have examined the performance of mergers and acquisitions in the United States and Britain over the last 90 years report their success rate at about 50 percent. Others say the failure rate runs as high as 75 percent (Ellis and Peckar, 1978; Marks, 1988). A study of joint ventures formed by United States companies reveals that most failures occur in the first five or six years. The pattern, they say, is even more pronounced among international joint ventures, especially joint ventures with Japanese partners (Kogut, 1988). 

 What is one to make of these dismal reports? It seems inconceivable that as national borders become increasingly blurred and as economic competition intensifies, that interest in joint ventures will subside. It seems far more likely that such international alliances will only increase as the speed of economic change increases. If our prediction is right, it seems important to delve deeper into the root causes of joint ventures' successes and failure so as to be able to improve their success rate. 

 This paper examines a notable joint venture between Toyota and General Motors (New United Motor Manufacturing, Inc., or "NUMMI"), a company located in Fremont, California in the shell of a huge GM assembly plant that had been closed. NUMMI, which began in 1984, is now in its 9th year of successful operation having survived the trials that cause most joint ventures to founder. It is a significant case because it demonstrates how the introduction of a new production system and a foreign culture transformed one of the worst GM plants into a world-class assembly operation in a unionized environment. NUMMI's experience, we think has implications for other companies that may follow a similar path. Findings can also help foster a better understanding of the role organizational culture plays in international joint ventures. 

 In 1989, five years after the joint venture had been created, a team of UCLA faculty members and graduate students went to work in the plant to understand how such a radical transformation was made possible. Though other studies of NUMMI have been done from sources outside the plant, ours was the first to examine the company from the inside- out as participant-observers (Adler, 1992; Brown and Reich, 1989). We had free access within the company, first working on the assembly line for three months to learn the Toyota production system, and later following issues throughout the organization while checking back to update the data intermittently over the next three years. Working like industrial anthropologists, we pieced together a composite view of the organization which we validated periodically with a local research committee drawn from Japanese and American managers, union leaders and team members. We discovered that the company's transformation stemmed largely from its ability to create a new "third" culture, or a hybrid of the best of its American and Japanese parentage. This paper reveals how such a conversion was made possible. We draw out some of the key principles that we think may be generalized from NUMMI's experience and conclude with a discussion of some hypotheses for consideration. 

 Until recently, human factors were regarded as relatively unimportant and were left unexamined. This is not surprising, as executives who design joint ventures typically rise through corporate finance or legal departments and few have anything to do with actually executing the plans. However, an increasing number of companies are beginning to realize that a compatible and successful joint venture depends on the characteristics of both partners -- considerations that extend beyond financial and strategic reasons. 

 We think these non-economic factors can be best understood as "organizational culture" -- that every organization contains a systematic set of assumptions and beliefs that guide individuals' day-to-day working behavior. For instance, our research shows how America's industrial growth led to the formation of a pervasive set of beliefs which today prove dysfunctional in the rapidly-changing world economy. Beliefs that grew out of scientific management that rationalized the division of labor and centralized authority, formed the basis for a rigid culture, making large companies vulnerable to more nimble, decentralized competitors. Assumptions that led management and labor into generations of conflict similarly put many of America's unionized smokestack industries at a competitive disadvantage with foreign companies with more cooperative labor relations. 

 Such assumptions may have been functional when the United States monopolized world markets. However in today's unpredictable and fast-changing economy, they impede organizations' abilities to adapt, often driving them in unproductive ways. Because these beliefs operate invisibly beneath the surface of daily life and give organization to peoples' daily lives, they are hard to identify and they are remarkably resistant to change. It is usually not until an organization experiences extreme stress that any real progress can be made in altering its fundamental belief system. 

 Frement's antagonistic culture made it a leading candidate for closure when GM began to shut down its unprofitable operations as the Japanese cut into its market. Heavy-handed management and union conflict created an "us versus them" attitude. The union's leadership had learned how to use conflict to dig deeply into GM's pockets. The only time the two sides came together was to negotiate a new contract. Detailed job descriptions and wage rates, negotiated in an atmosphere of mistrust, defined human roles impersonally and contractually. Most of the union's energies went to preserving these agreements and extracting new ones with each new contract. 

Doug, I need to know how you feel about this deal with the Japanese because we've got the biggest blue-water ocean in the world between us. We speak a different language and we have a different culture. We don't have as much working experience with the Japanese as we had with the Europeans. There's some strong feelings by the UAW about Japanese cars.

 Usery had met with the chairmen of both companies, Roger Smith and Eiji Toyoda, and he was confident that they were each committed to the joint venture. Next, wrangling broke out within the International over whether to insist on traditional work rules contained in the master contract, or to give into Toyota's demands for abolishing seniority as a base for hiring, and collapsing the myriad job classifications. To many UAW veterans, seniority and job classifications represented a lifetime of struggle which they resisted giving up. Bruce Lee, the UAW's western regional director, and others within the UAW argued that retaining these protections would only slow the recovery of the American automobile industry. Lee said: 

The traditionalists within the union are so tunnel-visioned they would have insisted on a goddamned mountain of stuff to climb over. And, it wouldn't have made one bit of sense to the working person. It would also have killed the Japanese' interests and any hope of re-opening the plant.

Both parties are undertaking this new proposed relationship with the full intention of fostering an innovative labor relations structure, minimizing the traditional adversarial roles and emphasizing mutual trust and good faith.

 In its first year of operation (1985), NUMMI assembled 64,766 Novas --a car that was acclaimed by consumer reports as one of the highest quality small cars in existence.3 Attendance averaged 98 percent daily in 1985 and only a handful of grievances were filed. It was hailed in union magazines as having "changed into a worksite unlike any other in the UAW's experiences." Newsweek called NUMMI, "a model of industrial tranquillity", while the Wall Street Journal reported that NUMMI, "has managed to convert a crew of largely middle-aged, rabble-rousing former GM workers into a crack force that is beating the bumpers off Big Three plants in efficiency and product quality." 

 A variety of theories try to account for NUMMI's success, however none of them are based on first-hand research done inside the plant. One theory explains NUMMI's success as a result of the fact that workers had been unemployed for two years, and would accept almost anything. Another attributes NUMMI's achievements to the way applicants were screened for jobs. No doubt, there is some truth in both points of view, though neither can fully account for the company's sustained improvement over nine years, or for the high levels of satisfaction its employees report. Our research indicates that the company's success stemmed more from the creation of anew "third" culture, one that was neither completely American nor Japanese. This hybrid, which combines the best of both parents, enabled the new company to break away from the old conflict-ridden culture and start anew. 

 Most of the evidence suggests that if GM had set out alone to recreate this plant from its old workforce, it would have failed because old beliefs were too deeply etched into the psyches of managers and workers to accommodate the radical change that was necessary. Gary Convis, vice president for manufacturing, explained how working with the Japanese was a powerful form of training that could have been achieved in no other way. When asked if GM could have transformed the old plant without the Japanese, Convis said: 

No! The Japanese have been a critical factor in what we've accomplished at NUMMI. It's not until you work with them, learn the principles from them, that you begin to understand how they see the world and how they feel. You know, this system can't be learned from a book. My understanding keeps deepening and my commitment to managing in a more open way gets stronger. It's evolved over time from seeing why they do things how they do them. So, the idea that we could have learned what we have without the Japanese is absurd.

I'd be talking to people and they'd find out I'm from GM. Man, I'd be embarrassed. But you know, they made us build cars that way. One day I found a bolt missing. I called the supe over and he say, 'What's the matter with you boy, you goin' to buy it? Move it!' Then when the plant failed they blamed us.

 NUMMI's tolerant atmosphere in which most differences are accepted and valued, provided another important ingredient. The joint venture inherited a workforce of individuals who had known each other for many years. Friendships cut across lines that might divide others, creating an open atmospheres. Though racism and sexism can never be eliminated, NUMMI's employees (more than 50 percent of whom come from minority groups) get along with a relatively small degree of friction. Their tolerance, which stems in part from old friendships, helps unite this multi-cultural, multi-ethnic workforce, often bridging serious conflict. Employees speak proudly of the plant's diverse workforce commenting that differences between people are a source of strength. For instance, Jesse Palomino, a former UAW committeeman explained: 

You know this place is a blend. We have Mexicans, blacks, whites, Japanese, men and women. And we all think a little differently. That's goooood.

You know, I felt bad. I look at some of these people --people I've known most of my working life, and I don't see them that way. Hell, after reading that article, I'd be afraid to come in this place! You know, we're the pride of America --auto workers, middle class. We're a culturally diverse group --isn't that the way it should be?

 As the company worked to fuse the Japanese and American beliefs into a single unit, it discovered four key principles without which little progress could have been made. And, as we will show, each of these principles enabled the company to develop a new set of beliefs around which an emergent culture is being constructed. 

• Both management and labor recognized that their futures were interdependent committing them to a mutual vision.
• Employees began to feel secure and trusted assurances that they would be treated fairly enabling them to become contributors.
• The production system formed interdependent relationships throughout the plant forming a basis for the development of trust and mutual respect.
• The production system was managed to transform stress and conflict into trust and mutual respect.

 Lee knew that his decision would fail if the leaders of the old local sabotaged the new venture. But, he also knew these people were excellent leaders who could be important allies in leading the new venture forward. Today, Lee laughs about it. 

These guys were tough as nails. They'd strike GM as fast as you could snap your fingers. They hated General Motors and they didn't want to change. They couldn't imagine they might have a real role to play in this new venture. But, I knew that if we didn't bring in the leadership of the old GM local, they'd be settin' across the street pitchin' firebombs at the place. There was no way Toyota could have opened the plant without them.

I didn't know if this was the kind of a thing where Toyota was going to come in with a system that nobody could live with. I just didn't know. But I had a feeling in my guts that they didn't know either.

What I want you to do is give it a fair hearing. If you come back and say, 'Bruce, this is a bunch of bullshit,' and if it just don't work, then I'll say, 'Fine! I'll get you out of there and we'll try something else.'

 It is now clear that by bringing in the old UAW leadership at the outset was of great value that Lee admits carried far beyond his own vision. At the startup in early 1984, union leaders and newly-hired managers worked side by side stuffing envelopes with job applications. Five thousand applications were mailed to former GM workers with a letter describing how new employees would be expected to contribute to an atmosphere of trust and cooperation, and that poor quality workmanship and absenteeism would not be tolerated. About 3,000 applications were returned. Now two years after the shutdown, many former GM workers had found new jobs while others decided that they could not accept the new conditions and did not apply. In the end, however, 85 percent of the men and women hired to work for the new company had worked in the old GM plant. UAW members and NUMMI executives say they made decisions on a case-by-case basis, screening and testing each of the applicants. Some applicants withdrew after going through interviews where they were told what would be expected of them. In the end, however, according to Bill Childs, NUMMI's vice president for human resources, only 300 applicants were rejected outright -- and those were rejected because of unusually poor work histories or drug or alcohol problems. 

 Setting aside old antagonisms and working with the company was difficult for many of the UAW local's leaders. Rank-and-file union members were suspicious of collaborating with the company, and Tony DeJesus, the union's first president and George Nano, chairman of the bargaining committee, were frequently accused of being backsliders and sellouts. However both DeJesus and Nano knew that the joint venture offered a chance for their members to go back to work and that they had to run the risk. Nano described conditions at GM where he headed the bargaining committee. "We had a lot of unchecked power," he said, referring to the union. " And we used it. But we forgot that there's got to be smoke coming out of the stack or there's nothing to fight about.." Some union leaders saw that the adversarial relationships had to give way to a new form, but no one knew what it was. 

 Toyota sent 400 trainers from Japan to work with their American counterparts to teach the production system which would provide the leverage for cultural change. The start-up was intense as the Americans and the Japanese searched for points of agreement, establishing relationships that would prove valuable later. At the same time, NUMMI invested more than $3 million to send 600 of its new employees to Toyota for training, which created an espirit de corps among the new team members and managers. 

 Tony DeJesus, then-president of the UAW's Local 2244, worked at Toyota learning the system while getting to know the Japanese as individuals. He said they communicated in sign language as they got to know each other better: 

We learned how close knit the managers and workers are on the floor. They have to be to work that hard! American workers always bitch when things don't go right. But the Japanese have a respect for authority --it's not a dictatorship, it's not forced, it's just part of their culture.

 Not surprisingly, NUMMI employees value their sense of security, especially in the face of rising unemployment. A recent company survey showed that 80 percent of the team members agreed that job security was the most important aspect of working at NUMMI. The policy also began to establish another belief that was critical for gaining worker participation -- that the workforce is valued as an asset rather than being regarded as a cost which can be trimmed during downturns. 

 NUMMI's employment security policy also reinforces a new set of human relationships in which managers learn to respect their employees. Convis said this is a "last horizon" for managers to overcome: 

One of the key concepts is respect for the worker, for the team member. The Japanese know that to make things more waste-free and streamlined, they have to work with the people on the line. They have to work with their people, to listen to them for their ideas, and to work with them to support theirs.

Japanese managers go looking for the problem. They trust their team members are doing their best. When something breaks down, managers feel it's their responsibility and they're apologetic out of respect for their team members. It's that mindset that the Japanese have helped teach us.

I knew we would be misunderstood if we ate separately, so we all ate together. Things we did at NUMMI like creating open offices and a communal cafeteria and getting rid of reserved parking spaces, we did out of necessity.

 As Toyota's production system was introduced at NUMMI, the management team and the union compressed job classifications and created a flat wage structure which served to equalize work and rewards while fostering a perception of fairness. GM's former job classifications were collapsed into just two, both which carry the same $19-$21 hourly wage rate. 

 NUMMI's flat wage structure also helped reinforce the new belief that the company's fortunes depended on everyone's effort. A flat wage rate is a hard concept for many American managers to grasp because most believe that employees are motivated to work hard only by incremental pay increases. Convis, explained: 

Our team members are ready and willing to change as long as they feel they are being treated fairly and equitable. We've tried to avoid favoritism and to level out the harder jobs. A single pay level is as fundamental to the success of this company as is security of employment. We have learned from the Japanese the importance of tying the company's success, and the success of the individual, to things they can control.

 Taiichi Ohno, Toyota's chief engineer, developed the system over years of trial-and-error to answer Japan's postwar needs for a manufacturing process that could product flexibly in small batches without a huge capital investment. It is organized around a single concept: Shorten the time between taking an order and delivering the finished product by converting waste (or muda) to value-adding activity. The concept is simple but deceptive because it requires giving up old beliefs and learning new ones. By standardizing work and by removing excess inventory through just-in-time delivery. Toyota's "pull" system creates a tight link with the customer (Kimura et al., 1981). Toyota's method stand in sharp contrast to mass production's "push" system, where inventory and manning requirements are insulated from direct market forces, dictated by forecasts and union agreements. Like a supermarket, Toyota's system pulls new parts and human energies only as fast as it consumes them --hence its "lean production" label (Womack et al., 1990). Unlike mass production that could tolerate conflict and adversarial labor relations, Toyota's system demands that individuals work together interdependently and cooperatively for the common good. 

 The system runs at a preset speed known as takt time (referring to the German word for musical rhythm) which can vary with external demands. Takt time determines the length of time a team member (NUMMI's term for production worker) has to do his or her operation, which today is set at 63 seconds. Because this time standard is observed throughout the plant, it helps level out work -- a principle known as heijunka -- while keeping the line under continuous tension. 

 By running the system with few buffers and by using human motion sparingly, problems are laid bare, allowing them to be worked back to their root causes through kaizen, or continuous improvement. Ohno was also heavily influenced by American quality expert, W. E. Deming, who insisted that responsibility for quality be pushed down to the production line. Toyota's jidoka principle, that jobs are to be done correctly the first time, minimizes the chance that defects will be passed down the line. However, workers are obligated to stop the line when they see a problem. When the line stops, lights flash and music plays, drawing attention to the problem, which is then worked back to its root cause and corrected. Working under these conditions produces con stant change, putting high premium on managers' and team members' abilities to adjust to a dynamic environment. 

 Empowering workers to stop the line was a radical change from the old GM plant. Gus Billy, a veteran union leader said: 

At GM you just didn't stop the line. The superintendent would have your ass. No one had that authority except him.

When there's no down-time I know that my people are sending junk through or they're trying to be superstars.

 Another principle that helps to reinforce a sense of interdependence is making performance data publicly visible. Standardized work and kaizen charts hang visibly in team areas, as do attendance boards and defect records. Visible information keeps everyone abreast of changes and individual contribution is easily seen. Nowhere is this principle more visible than in NUMMI's daily Assembly Quality Review. After lunch, about 40 or 50 team leaders, group leaders (NUMMI's first line managers) and assistant managers convene to discuss defects found in a random sample of cars. Managers are put on the spot in front of their peers to explain the reasons for defects and the countermeasures they plan to take. Managers say they do not mind being singled out the first time, though repeated errors that go uncorrected get attention. One group leader said: 

It's OK to be up there once in a while. I mean we're all human. But if you're up there more than once for the same defect, watch out!

 Managing a system like NUMMI's is difficult because it is dynamic and it requires constant judgment and adjustment to changing conditions. Osamu Kimura, NUMMI's current president, de scribes the need to constantly "renew the spirit," by finding problem areas and visibly accelerating energy for improvements. For instance, in 1991 Kimura launched what he called the J-1 program to renew NUMMI's spirit. A natural feeling of complacency had set in, and quality began to suffer. He explained, "We made it a campaign with buttons and banners so that employees could see our commitment each day." By reinforcing NUMMI's key principles through a drive to get "back to basics," Kimura's J-1 program refocussed energies to break the cycle, leading NUMMI to win first place in J.D. Powers' rankings for American subcompacts, and number one for trucks. 

 However, when the pressure gets too great, managers sometimes fall back on old ways that worked in the past. For instance, Mike Mulleague, manager of assembly, explained how pressure to meet production quotas tempts him to revert to getting cars out the door at any cost. He said that at GM he knew he could always meet production quotas, but he learned to ignore the impulse at NUMMI. He had to learn to trust that productivity would follow quality by following the system's principles. Mulleague said it was difficult for him at first to grasp what Higashi meant when he said, "I don't care if you build only six cars a day as long as they meet our quality standard." Mulleague said: 

It just got buried down in my bones. It becomes part of you. When the pressure's on, half of the people in this place will revert to their old ways --pushing cars out the door, and I'm no exception. Maybe I'll get 70 or 80 percent of the way in my lifetime, but I'll never by perfect!

We didn't just make engineering changes to avoid the problem. We stuck to our guns as far as building the car in station, holding principles of the Toyota production system, adding help where we needed to keep that system in place. We were always in control. We knew that although we had a lot of problems, we weren't violating the system. We weren't producing bad quality cars. So that's number one. You stick to quality first. I mean it's not just a word, it must be in your heart.

Consistency and the Japanese style of consensus making are the keys to better management. We've now launched two new cars and they'll prove to be good products in the marketplace. We learned from the experience. Just because our system's nine years old it doesn't mean it's not fragile. People will follow management's direction...whatever management does, and what direction they push, and how hard they push, dictates where this company eventually goes.

 For instance, pressure from management caused an experienced group leader, Roger Gallet, to eliminate a job on the line without first consulting his group. During the morning break Roger informed his team members, with whom he had worked for a number of years, that he had already made the change. The meeting instantly turned into pandemonium. One team member shouted angrily: 

You know, we've got a stake in this place too! This is a lot of shit! Why weren't we consulted? Aren't we important?

Management's got to learn to play by the rules. It's not GM you know, a one-way street. I don't want to see this place fold, but this is sure as hell no way to run a plant.

 At 2:30 pm at the end of the shift, Roger called an impromptu meeting and explained, "I was under pressure this morning and I didn't want to hear what you had to say. I'm sorry." The mood of the group shifted, becoming more relaxed and positive. A team member whispered an affectionate aside, "Well, at least he's honest." She added, "You know, Roger's really OK. We cut him some slack." After the meeting some of the team members tried to soften the morning's harshness by tapping Roger on the arm, making friendly comments as they went to their lockers. Here it became apparent how trust that had been established between Roger and his group over the years played an important role by absorbing conflict and directing energy to the task at hand. 

 When a manager gives in to pressure, however, and turns authoritarian, he or she usually gets an angry response which distances team members and diminishes trust. For instance, management announced a policy that groups should rotate jobs every 2 1/2 hours to reduce injuries, level the work, and to break boredom. A manager assembled his group to discuss the policy where heated objections were voiced. As the tension built and he began to lose control, he put a hand on one hip and pointed at the 15 assembled team members, blustering: 

We're going to rotate whether you like it or not! Management is not going to tolerate the defects coming from this group. And, if you don't perform, you might not be around much longer!

Why not find out what the majority wants? Let me tell you sir, you're gone a good deal of the time and you don't know what the hell goes on here.

There are some things you vote on and some things you don't. There is a time to get input but I don't have to take a vote on it or get your blessing. You'd never get consensus from this group anyway. My role is to give you information! Rotation! We're going to have it!

 You just can't get the American out of the manager. Jesus, it's getting just like GM. I thought the Japanese owned half of this plant. Must be the other half! 

 What little trust that may have existed was quickly obliterated in this angry exchange. 

 A large element of building trust lies in NUMMI's style of management. NUMMI's is not a democratic system where workers and managers vote on issues, but rather it is a form of open decision making where individuals are encouraged to contribute to decisions. Gary Convis explained that this form of decision making has become an important asset to the company. He said: 

The Japanese taught us how to manage from data. Data doesn't lie. The consensual form of decision-making insures that the whole picture emerges. That each piece of data is included and analyzed. That's a far cry from the old American way of shouting 'We're all screwed up,' and getting into a shouting match about who's at fault and what to do about it! My God, the Japanese grind data. They grind it and grind it until they come to a decision that's right.

 NUMMI is a living microcosm of the principle. In 1991, Toyota selected NUMMI to build its pickup truck because of the company's record for high productivity and quality, investing another $340 million in the plant and expanding the workforce by about 900 employees. Team members witnessed how this principle translated into opportunity as the plant expanded and new jobs were created. In this way, a new belief in mutual interdependence between team members and management began to replace the belief of every man for himself. 

 Japanese coordinators who came to NUMMI from Toyota worked with their American counterparts and taught them how to extend decision-making to workers, a change that has been embraced by management and the union. George Nano, chairman of the UAW bargaining committee, said of GM's management style, "They liked their private offices. All they wanted you to do was to check your brains outside." Toyota coordinators have gained respect from most NUMMI employees through their detailed job knowledge and their willingness to set status differences aside and work to solve problems. 

 NUMMI's form of consensual decision making is yet another point on which both cultures could agree. Its goal is to insure that individuals have the opportunity to contribute and that decisions include multiple points of view. Tony Fisher, who worked for GM and now heads NUMMI's environmental affairs, described the power of consensual decision--making: 

The Japanese ask questions and seem to talk endlessly about solutions. It may take a long time to make a decision, but once it's made, that's it. Pity the person who tries to undermine the decision once it's made.

Well, the Japanese sat the guy down and straightened him out. 'That's our decision,' they said, 'And we're going to put our heart into it.' Boom! That's it! You don't learn this kind of leadership in the class room -- you learn it from coaching and by trial and error.

I always believed in including people in important decisions. I'm a Christian, a Catholic, and I believe in the Golden Rule -- the essence of respect and trust. But I had never seen it practiced in business until I came here. Here is a country that's non-Christian and look what they do!

When GM ran this place it looked like a dump at the end of the day. Chicken bones in the cars, broken glass in the parking lot. Shit all over the place. The Japanese insisted that it stop and we don't eat outside any more. The parking lot's clean just like the rest of the place. Someone just had to insist.

 Hayao Kawai, a Jungian analyst and professor of Education and Japanese Studies at Kyoto University explained the basis of the Japanese communal spirit. He described how from birth Japanese children are raised according to a maternal principle to be open to others who are the source of all nourishment. But a deeper reason lies behind the Japanese communitarian spirit. Kawai explained: 

In the East we think of ourselves as related to everything -- animals, plants and humans. This table is no different than you and me. By saying 'I', we separate ourselves from each other. So rather than saying 'I love you', I might say only 'love'. That's enough. We don't like to use 'I' and 'You'. Often if you ask a Japanese, 'What do you think?' he'll say. 'Don't know.'

 This Japanese concept of self as part of a larger community reveals itself in numerous ways at NUMMI. One day in the assembly offices Hiromu Nakashima, one of Toyota's senior coordinators, explained how he first saw the difference --in how Americans and Japanese compete in sports. He said: 

Here in America, the competition is among individuals, but Japan competes as a group. If you look at how many golden medals Americans got from Olympic Games, you can easily see just how capable and skillful each American is. In contrast, Japanese as individuals cannot compete with Americans at all.

The most important thing is the extent to which each individual joins his effort in the company he or she serves. It is a competition of a company's product, not an individual competition. Each Japanese individual is far less strong than each American, but when they join their efforts, it is stronger. American individualism is not bad if you look at it from the perspective of an individual. However, it is big trouble for a company or for industry.

 For instance, when NUMMI started up, music would play before each shift. At first Toyota coordinators led the Americans in warm-up exercises designed to loosen up their muscles and enhance group spirit. Over time interest in the exercises died off, though the music still played. One team member who appreciates the Japanese influence at the plant, nevertheless quit the exercises, saying, "They just went too far." She laughed, "I mean we're Americans. We're not robots!" 

 Some Americans also said that Japanese loyalty to their employers goes beyond bounds where they can feel comfortable. One manager explained how in Japan they develop loyalty early by starting youngsters out in high school working as interns. He said the children know if they work for Toyota they'll be taken care of. He added: 

We don't have anything like that here. It's not the same type of commitment. That's why the Toyota model in its pure form wouldn't work here at NUMMI.

Japanese workers make a lifetime commitment to their employers, but Americans lack this sense of 'belongingness'. American workers exercise individual choice but by working as individuals, knowledge cannot settle down.

I understand, but most of us put our families first. We work to live, not live to work. I don't think the American worker will ever be like the Japanese. I just don't think that model would ever work here.

 Some American workers fear they may lose their individualism by conforming. One night at gathering at a popular Mexican restaurant, a group from Chassis drank and blew off steam. PT parties, NUMMI's equivalent of drinking sake after work at Toyota, were established to help build a sense of fellowship. A team member who we call Ramon left early after angrily denouncing the company and the team concept and the conversation now turned to him. Ramon was known as a complainer, doing as little work as possible and counting his days until he can retire. Team members agreed that Ramon thinks he'll get attention by complaining. "Like the squeaky wheel gets the grease?" a young new team member asked innocently. "Not exactly," said the group leader. In Japan, the sticky nail gets the hammer! By God, Ramon's lucky we're Americans. If this were Japan, he'd get clobbered!" 

I could not transfer the Toyota way in its pure form. The new way had to be localized. It had to fit correctly with American ways. Otherwise team members simply refuse to participate. It took a year for me to discover a way to get the Americans to agree with me. Once they did, it became possible to join our efforts.

 Osamu Kimura said the cultural exchange has worked both ways. "Despite our differences as Japanese and Americans, we found that we share many important similarities." Kimura is a serious executive, but he has a personal way that managers and team members appreciate. During union negotiations he often plays poker and drinks with the union leaders. He worries, however, that language obscures the fine points of jokes which are important to building relationships. Kimura explained: 

Practical language, discussing quality or cost is not so difficult. But jokes at dinner are most difficult. Americans sometimes say that Japanese are very shy and do not like to joke. But that is not true. It's just that most American jokes end very quickly with a fast sentence or two. Americans laugh, but I cannot understand! Because of the language, we cannot join in those areas! So, sad.

 Nakashima explained how personal relationships with his American colleagues helped him understand the American culture. He described GM and Toyota like oil and water and NUMMI like a small salad bowl: 

Unless you mix them well, the oil and water will never become dressing. NUMMI is like a small salad bowl --a big one would never work --and communication is the way to mix them. It takes a while to mix them to make a good dressing.

 With few exceptions, the original American management team remains nearly intact. The union's original leadership still remains in power, though Tony DeJesus, and a few committeemen, lost their seats in the last election. Today, DeJesus is the UAW International's representative at NUMMI. Charles Curry, the new president of the Local, won by representing the People's Caucus, a dissident UAW faction. Bruce Lee interpreted the change in union leadership as normal. He explained: 

It's not a perfect world, you know. It's only natural that ultimately there'd be another caucus. Some of these guys had been in power before but now they were out. So what do they do? First, they take on the system but when that doesn't fly they take on the leadership.

You know when the opposition says 'this system sucks' it falls on deaf ears. Nobody is trying to throw the system out. Sure, they've got some ideas about how to do this or do that, to tweak the system to make it better. But, burn down the church to roast the pig? No sir!

 First, a force great enough to induce change must lead any transformational effort. Existing beliefs that form an organization's culture are deeply embedded in humans' makeup. Because these beliefs help individuals make sense of their daily lives while directing their behavior, they are remarkably resistant to change. For instance, union leaders and team members had to suspend hard-learned beliefs that management would take advantage of them, so they could be able to learn Toyota's principles. Their past experience with time and motion studies that had been used by management to increase output at the workers' expense, made it difficult to trust that standardizing work and setting takt time was anything more than a prelude to a speedup. It was not until individuals learned that they would share fairly in the fruits of the company's success, that they could begin to embrace the system's principles and let go of old and dysfunctional beliefs. But, as a NUMMI manager explained, changing his own stubborn belief that production can be achieved only at the expense of quality, has been hard. He admitted that when under pressure he sometimes reverts to pushing cars out the door, and concluded, "maybe I'll get 70 or 80 percent of the way in my lifetime, but I'll never be perfect!" 

 In light of the intractable nature of deeply-held beliefs, it is little wonder that it takes considerable force to induce change of this kind and to sustain it over time. The impetus came partly from the shutdown and resulting unemployment, but moreso from two added factors: NUMMI's commitment to treating its workforce fairly, and Toyota's integrated production system that demanded participation, mutual respect and trust. There is little doubt that without these twin incentives for change, little progress could have been made. 

 Second, Toyota assumed a dominant voice in the joint-venture, and took full responsibility for teaching the Americans how to implement and manage its production system. GM's agreement for Toyota to act as the controlling partner was significant because the Japanese partner's beliefs and management style were more in tune with market demands for quality and speed, as well as with employees' needs for a cooperation, trust and respect. Also, agreeing who was responsible for day-to-day management at the outset, enabled Toyota to administer consistent direction from the top, which sent a message of consistency and stability to the rest of the company. 

 Third, Toyota managers resisted temptations to forge ahead with a unified vision of how the system should be implemented in its pure form. Both the Japanese and Americans learned as they went. Kan Higashi acknowledged that open office space, eating areas and lack of executive privilege established in NUMMI's early days, were symbols of Toyota's intention, though he admitted he did not know how they would be implemented. The UAW leadership also took very tentative steps at first. Bruce Lee remembered his own initial skepticism. "I wondered if Toyota was going to come in with a system that nobody could live with. I just didn't know. But I had a feeling in my guts that they didn't know either." By adopting a "go slow" attitude, the Japanese and Americans remained open to points of resistance as they arose and navigated around them. By tolerating ambiguity and by searching for consensus, Toyota managers established the beginnings of mutual respect and trust with the American workers and managers. Toyota's attitudes stand in sharp contrast to those of Mazda when it established a plant in Michigan in 1988.5 Mazda's assembly plant was not a joint venture, though it had some characteristics similar to NUMMI because of its agreement to hire an all-union workforce. However, Mazda failed to lay sufficient groundwork and to establish a mutual cultural understanding with the American workers to withstand the pressures of its production system. Mazda had little understanding of American unions' belief structure, and the unionists were suspicious of their Japanese bosses' motives. The UAW local adopted a confrontational attitude with Mazda's management and resisted the introduction of its production system. Grievances soared and Mazda tried to exert control by ordering workers not to speak publicly in hopes of avoiding negative publicity. Mazda's tactics only confirmed union leaders' worst fears. Cooperation and teamwork broke down as the UAW's New Directions, a wing of the union that opposes cooperation with management, won control. Thus, despite Mazda's hopes for a cooperative and profitable venture with its unionized American workforce, the company's failure to examine both its own and the UAW's beliefs and assumptions led into a morass of conflict which in all likelihood could have been avoided. 

 The indications are that NUMMI has met the test that many other joint ventures have failed. Toyota has successfully diffused its principles and the company has enjoyed nearly a decade of continuous expansion. It has thus demonstrated a key principle to its workforce: that by converting waste to value-adding activity through continuous improvement, market share and resulting employment will grow. It is unknown, however, as it is with any manufacturer that embraces Toyota's principles, how the system will endure if economic conditions change and demand cutbacks and layoffs. It is also unclear what new manufacturing and management paradigms will emerge as the world economy continues to change and how lean systems like NUMMI's will adapt. However, the adaptability and flexibility of NUMMI's new culture suggests that it is prepared to adjust to an unpredictable future. 

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