Flexibility and Efficiency - Both Can be Improved - Paul S. Adler

Flexibility Versus Efficiency? A Case Study
of Model Changeovers in the Toyota
Production System
Paul S. Adler • Barbara Goldoftas • David I. Levine
School of Business Administration, University of Southern California, Los Angeles, California 90089-1421
Program in Writing and Humanistic Studies, Massachusetts Institute of Technology,
Cambridge, Massachusetts 02139
Haas School of Business, University of California, Berkeley, California 94720


Much organization theory argues that efficiency requires bureaucracy, that bureaucracy impedes flexibility,
and that organizations therefore confront a tradeoff between efficiency and flexibility. Some researchers have challenged this line of reasoning, arguing that organizations can shift the efficiency/flexibility tradeoff to attain both superior efficiency and superior flexibility

The authors analyze an auto assembly plant that appears to be far above average industry performance in both efficiency and flexibility. NUMMI, a Toyota subsidiary located in Fremont, California, relied on a highly bureaucratic organization to achieve its high efficiency. Analysis of  two recent major model changes, the authors  find that NUMMI used four mechanisms to support its exceptional flexibility/efficiency combination.

ORGANIZATION SCIENCE/Vol. 10, No. 1, January–February 1999 pp. 43-68