ABSTRACT
Hierarchies serve as the structural basis of all living systems. A hierarchy is a collection of parts with asymmetric relationships inside a whole. Hierarchies are used in systems to describe the complexities of structures. The complexity of a system is dependent on the number of interactions it has with other systems. Agency theory is based on the view that groups in isolation have different interests, which means they are less likely to understand system influences and interdependencies. Hoshin represents an annual mechanism that formalizes how departments should work together by providing a system of checks and balances between all involved units. An aspect of Toyota’s management system that relates to the system property of hierarchies is hoshin kanri. Complex systems have the characteristics of open systems, which encourage more interaction across hierarchical boundaries. Hoshin kanri shows characteristics of a system with high employee involvement because leadership does not establish the means for achieving targets.
