Japanese Management

Japan, one of the leading industrial nations in the world, has adopted managerial practices that are quite different from those of other economically advanced countries in the Western world. The discussion below deals with two common Japanese practices: lifetime employment and consensus decision making. Then it compares and contrasts Japanese and US managerial practices, including Theory Z.

Important features of Japanese management practice are lifelong employment for permanent employees (related to the staffing function), great concern for the individual employee, and emphasis on seniority. Typically, employees spend their working life with a single enterprise which in turn gives employees security and a feeling of belonging. This practice brings the culturally induced concept of wa (harmony) to the enterprise resulting in employees loyalty and close identification with the aims of the company.

However, it also adds to business costs, because employees are kept on the payroll even though there may be insufficient work. Consequently firms are beginning to question the practice of lifelong employment. Indeed, changes appear to be in the making, but they are slow. What is often overlooked however is that this permanent employment practice is used primarily by large firms and only for permanent employees. In fact, it is estimated that the job security system applies to only about one third of the labour force.

Are Japanese workers happy?

Japanese workers endured long working hours and sometimes poor working conditions in exchange for lifetime employment. While this practice still prevails in many companies, some do not provide the workers with a sufficient safety net of employment. This insecurity may have contributed to making Japanese workers the least satisfied among seven countries.

In a study conducted by International Survey Research found that the Japanese   were the least satisfied and the Swiss workers were the most satisfied. Specifically in response to the question taking everything in to account, how satisfied are you with your company as an employer?  The following results were obtained. In Switzerland  82 per cent  of the workers  were satisfied in Canada 73 per cent, in Mexico 72 per cent, in Germany   66 per cent, in the United States 65 per cent, in the United Kingdom  63 per cent and in Japan only 44 per cent.

Moreover, only 33 per cent of the Japanese workers felt that their company was managed well. Sixty per cent of the respondents felt that they were not fairly appraised; only 37 per cent of the Japanese workers felt that their pay was fair.

The often admired disciplined Japanese work force appears to think that their contributions to Japan’s economic success has not been sufficiently recognized and rewarded as shown by the low satisfaction of its workers.

Closely  related to lifelong employment is the seniority system, which has provided privileges for older employees who have been with the enterprise for a long time But there are indications that the  seniority system may be super-ceded  by a more open approach that provides opportunities for advancement for young people. For example, the relatively new Sony Corporation has team leaders (a point is made of not calling them supervisors) who are often young women 18 or 19 years of age. There is practically no age difference between these leaders and the operators they lead.

The managerial practice of decision making in Japan is also considerably different from that in the United States It is built on the concept that change and new ideas should come primarily from below. Thus, lower level employees prepare proposals for higher level personnel. Supervisors rather than simply accepting or rejecting the proposals tactfully question them, make suggestions and encourage subordinates. If necessary, proposals are sent back to the initiator for more information. Still, in major decisions top management retains its power.

Japanese management then uses decision making by consensus to deal with everyday problems lower level employees initiate an idea and submit it to the next higher level, until it reaches the desk of the top executive. If the proposal is approved it is returned to the concerned level for implementation.

The modern trend in Japanese management is changing and adopting features and systems from western, American, Chinese, Taiwan, Indian and possibly other countries, management. This because the business has become Global and Japan has set up their manufacturing and business units in all the important business places of the world.