Management of Technology and Innovation in Japan

230 K. Nobeoka
Discussion and Conclusion
This case study has discussed a new organizational structure that pursues multiproject
management by analyzing changes in product development organization at
Toyota. This paper confirms that while enhancing and utilizing its existing capabilities,
Toyota has shifted beyond a traditional product development organization
that is oriented towards either single project or engineering functions.
Figure 6 describes this evolution pattern with respect to the organizational orientation
in product development. Toyota shifted from a function-oriented to project-oriented
matrix structure in the 1960s (Ikari 1985). It maintained its heavyweight
product management system until early 1990s. During 1992 and 1993,
Toyota shifted from project-oriented management to multi-project management.
In order to strengthen inter-project coordination, which was becoming important
in the new competitive environment, Toyota could have weakened authority of individual
product managers relative to functional managers who could have effectively
managed inter-project coordination at least within their functions. However,
one of the most important aspects of effective multi-project management is to improve
both cross-functional and inter-project integration simultaneously. Therefore,
Toyota decided to strengthen both integration mechanisms at the same time.
Strong
Inter-Project
Coordination
Weak
Functional Org.
Weak
Lightweight PM Org.
(Chrysler, 1980s)
Heavyweight PM Org.
(Toyota, 1980s)
Project Team Org.
(Chrysler, 1990s)
Cross-Functional
Coordination
Multi-Project Org.
(Toyota, 1990s)
Fig. 6. Evolution pattern to multi-project management
Strong
Toyota
Chrysler
While developing inter-project coordination mechanisms and processes, Toyota
also enhanced its capabilities that had been accumulated in the heavyweight product
management organization. The center organization at Toyota significantly improved
inter-project coordination among technically related projects. At the same
time, Toyota has improved cross-functional integration by strengthening the authority
of product managers, who are supported by center heads, over functional
managers. Cross-functional integration tasks were also streamlined so that additional
tasks for inter-project integration can be carried out more effectively.