One in three New Zealand companies believe they are overstaffed and are planning redundancies, a Business New Zealand survey found last month.

But are redundancies in time of recession absolutely necessary for most companies? Some are resisting the move more than others. Toyota is one of the few to be holding firm in its resolve to keep its workforce intact. According to one source, Toyota hasn't made redundancies since 1950, and regrets making them then.

"The core pillars of the Toyota Way are respect for people and continuous improvement," says University of Michigan Professor Jeffrey Liker, interviewed in globeandmail.com. Liker, who has written two books about the company, says: "Respect for people is a commitment to the economic and social wellbeing of all permanent employees. That's a commitment that 'we're not going to dump you because it's convenient for us'."

Whether Toyota will manage to ride out the entire recession without making permanent workers redundant remains to be seen. At this stage it is cutting pay for its North American senior executives, eliminating their bonuses and those of salaried and hourly employees, further cutting production and offering its first US-wide voluntary separation programme to reduce its workforce.

Simply shedding 10 per cent of its North American workforce would be a disaster for Toyota, says Liker.

"If respect for people goes out the window, then they lose the foundation for the future because then suddenly people are going to say this company is not any different from any other company."

Liker believes it is far more likely that Toyota will use the downturn as an opportunity to increase productivity, raise quality and cut costs using a process known as kaizen - the Japanese word for continuous improvement.

Kaizen is not unknown to New Zealand. Masaaki Imai, founder of the Kaizen Institute, set up the organisation in New Zealand 20 years ago when he was in the country helping Fisher & Paykel with its manufacturing operations.

Danie Vermeulen and Richard Steel took over the institute in 2006 and have just set up the Kaizen College, which will run professional development seminars to help local businesses navigate their way through the downturn. Kaizen clients range from large consumer goods organisations, to tertiary institutes such as the Open Polytechnic, to smaller firms.