Evolution of Organizational Capabilities in Manufacturing: The Case of the Toyota Motor Corporation

  • Takahiro FujimotoEmail author
Part of the Evolutionary Economics and Social Complexity Science book series (EESCS, volume 12)


This chapter focuses on the formation and evolution of organizational capabilities in manufacturing at the individual firm level. Empirically, we look at the emergence of the manufacturing system at the Toyota Motor Corporation, the Toyota Production System, between the 1930s and the 1990s.

We propose to link the resource-capability view of the firm with the evolutionary framework in social sciences or a dynamic perspective that can separately explain an observed system’s survival (i.e., functional logic) and its formation (i.e., genetic logic). Within this evolutionary framework, two main concepts are proposed: multipath system emergence, for analyzing the complex variations in manufacturing system changes, and evolutionary learning capability, for explaining why certain firms can develop competitive manufacturing capabilities faster than their competitors.

We apply these concepts to a historical analysis of the manufacturing system at Toyota. More specifically, we investigate the origins of several major organizational routines of the Toyota Production System and show that they emerged through the unpredictable patterns of various evolutionary paths, including rational calculation, random trials, environmental constraints, entrepreneurial visions, and knowledge transfer, i.e., through multipath system emergence.

It follows from this that Toyota, as a consistently competitive manufacturing firm, possesses not only (1) routinized (static) manufacturing capability and (2) routinized learning (continuous improvement) capability but also (3) evolutionary learning capability, which is a firm’s dynamic capability-building capability to improve productive performance in the long run in a situation of multipath system emergence. In other words, a firm’s evolutionary capability, or the capability of building capabilities despite a situation of unpredictable multipath system emergence, is critical to its long-term survival and growth, particularly in industries where competition is intense, market/technology environments are uncertain, and products/processes are complex.


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Copyright information

© Springer Japan KK, part of Springer Nature 2018

Authors and Affiliations

  1. 1.Graduate School of EconomicsThe University of TokyoBunkyo-KuJapan

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