One of the widely held opinions about Japanese firms’ high performance suggests that Japanese employees, organized in teams, are making improvements in their own jobs through quality circles or other initiatives such as a suggestion system. These kaizen (continuous improvement) activities have been considered in the Western industrial world as a principal factor in Japanese firms’ high product quality and productivity. This opinion was surely diffused by Japanese authors such as Masaaki Imai (Imai, 1986), Yasuhiro Monden (Monden, 1985), and strengthened by IMVP's research synthesis (Womack, Roos, and Jones, 1990).1 Moreover the importance of employees’ kaizen activities has also been emphasized by Japanese firms themselves when they are promoting these activities in their transplants in USA and in Europe (see, for example, the “Foreword” to JHRA (1995), written by a manager of Toyota Motor Manufacturing USA). Consequently, it is comprehendible that European and American automobile producers have tried to set in place kaizen activities in order to assure high product quality, and if possible, to increase their productivity, by involving workers in these activities2. However, Parker and Slaughter (1988), after studying Japanese transplants and American plants, underlines that kaizen is focused upon increase in productivity and imposed as such to workers. These authors then characterize the Japanese style factory management as “management by stress”. If the workers were continuously compelled to increase their productivity by kaizen, they would always be under a stress. Furthermore, increase in productivity means for them a risk of loosing their job as far as their employment is not guaranteed. This fear would have a reality in the countries where the labor market is flexible to such an extent that workers and/or union present their hostility against the kaizen. Discrepancy in understanding kaizen is then considerable. Does kaizen mainly target quality improvement or productivity improvement? Without choosing a side, it is easy to show both have some truth, but lack a global view of kaizen activities for highlighting one side. In order to seize the whole framework of kaizen, we have to legitimately question whether these opinions confirm to what it is that Japanese employees do in this regard in their Japanese plants. First of all, who are these employees? They would have to be blue-collar workers in the Western perception, but the part of their contribution in improving productivity and price cost does not seem exceed 10% of all improvements obtained3. If it is not far from the reality, who then brings about the major increase in these improvements? Second, are the kaizen activities carried out without having relation to the company’s profit strategy? It is hard to imagine that completely voluntary activities give increasing productivity leading to constantly reducing costs. If the employees have an objective in their kaizen activities, who provides the objectives, what do these objectives consist of, and how they are managed? These questions invite us to inquire about a whole management system of kaizen that exists in Japanese manufacturing companies. After then, it will become easy to understand the reason why Japanese transplants emphasize the importance of workers' kaizen activities through small groups and/or a suggestion system. But then questioning the kaizen management in this way ought to reach the diversity in practices because of more or less firm specific management method. We can not say Japanese carmakers exercise the same management, even though they all have quality circles and kaizen activities, but rather the difference in their management seems to give that in their cost and productivity performance. So in this paper, I take the case of Toyota as a representative example of kaizen management because it had the...