Handbook of Research on Strategy and Foresight
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Handbook of Research on Strategy and Foresight

Edited by Laura Anna Costanzo and Robert Bradley MacKay

Drawing together a collection of 29 original chapters, the Handbook makes an invaluable contribution to theory and practice by stimulating disciplined, rigorous and imaginative enquiry into the relationship between strategy and foresight. Leading scholars in the field of strategic management are brought together to offer innovative and multi-disciplinary perspectives on the past, present and future of strategy formation and foresight. In so doing, they challenge research in four key areas: strategy and foresight processes; strategy innovation for the future; understanding the future; and strategically responding to the future.
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Chapter 22: Organizational Innovation of the Toyota Group

Faith Hatani


Faith Hatani Introduction For the past few decades, the global economy has witnessed massive industrial restructuring. Many firms have made dramatic changes by redesigning their organizational structures to improve performance. Making changes in a large interfirm network, however, is a challenging task. This chapter presents a case study of organizational innovation at the network level. In this study, I define organizational innovation of an interfirm network as the creation of new structural, managerial, and relational forms which enhance learning activities and the competitiveness of the network as a whole. In the light of the adaptively rational model, this chapter suggests that the design of an interfirm network requires flexible, coherent, and progressive coordination through strong leadership from the core firm. This chapter shows that the creation of innovative network formation is achievable by making full use of existing resources through new arrangements and recombinations. By reporting on the reorganization of the Toyota Group1 which its core firm, Toyota Motor Corporation, conducted between 1994 and 2004, the case highlights Toyota’s orchestration of structural changes and knowledge-sharing processes in its supply network. The case shows that the core firm’s large-scale merger and acquisition (M&A) is not the only way to advance the performance of a business network. The study employed the case study method to provide useful descriptions of variations in organizational structure and the process of change (Simon, 1947) in order to draw the causal relationships of organizational phenomena (Glaser and Strauss, 1967; Yin, 1989). This...

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