Introduction
Theory Z is one of those ideologies originated from the Land of the Rising Sun. It is characterized by combining the autocratic Theory X and democratic Theory Y with high regards to the principle of collaboration. Its global prominence had helped not only eastern countries but also the western development. However, the 21st century business management landscape is more complex and continuously changing and the requirement for every competitive multinational firm is to adapt to its environment. It is seemingly a choice between evolvement or demise particularly those in the fast cycle markets. In this view, this paper presents a descriptive insight to Japanese management culture in order for the reader to compare its relevance to the present international business happenings. It can be said that being unique is a source of competitive advantage. In contrast, failure of adaptation can also be the cause of declining market share. For our purposes, the paper will show evidences of Japanese management system, while there is a short conclusion, the bigger picture of evaluation would come from the reader.
The Japanese Management Culture
To be able to understand the Japanese management culture, there is a need to examine critical factors that affect its international concepts. Time explained that the distinction of Orientalism from the West emerged in the last quarter of the previous millennium resulting to relative newness and individuality of culture. Space, on other hand, showed the geographical location of Japan, which was influenced by China, before it reached the Western thought. Lastly, language reflected the experiences culminated across history and different political and cultural regions. As a result, crossing a different language like keiretsu, people would reinforce its sense, where in this case, both linguistically and contextually hard to decipher particularly on the Western perspective (2003).
In analysis, US American managers have more individualistic tendencies than Japanese counterparts building a manager’s state towards conformity with his work with less emotional attachment to the company. In contrast, Japanese managers are more risk averse to uncertainty than their US equivalents which is compatible to their relative formal lifestyle as high uncertainty avoidance put great emphasis to tried-and-tested methods. Further, it is found that Japanese managers are more likely to be concerned on automatic respect for authority and hierarchy than US peers. This likelihood is supported by American individualism and Japanese Confucian tradition for un-equality in the society. As a result, the former would tend to act according to expectations while the other exhibits inherent regard to seniority and/ or being a male from young members which are considered learners. However, this authority has consequent responsibility to guide the learners and giving license to the latter for more mistakes (2003).
In addition, Japanese managers take a long-term time orientation whereas US counterparts settle for interim phases which was invigorate by the trust put by the former to their nearest factor to control, human resources, which has known commitment and flexibility. This then would offset the uncertainty factor illustrated earlier. Next, Japanese managers have high-context communication than US peers which means that implicit information and silence are more tolerable. In high-context environments like Japan, the information is already in the person. As a result, social cohesion observed in Japanese corporate linkages is possible as the high-context communication requires face-to-face interaction to better know the personality of the communicators. On other hand, US negotiators are irritated in the lack of clear information due to their reliance to individualistic capabilities. In effect, communication difference alone suggests a number of implications to the varying approach between these managers ( 2003).
In human resources management, Japanese organizations emphasize three critical issues; namely, internal labor market, concern to employee needs, and cooperation and teamwork under unique firm environment. In effect, these issues are translated into extensive training, participative decision-making, adaptive organization, competitive appraisal system and continuous consultation. In this arrangement, the firm seeks to employ and retain applicants that can accept and blend in the values and culture of the organization. Fairness is also a vital factor since white- and blue-collar employees has relatively small disparity in terms of benefits (1983).
As having one of the largest shares in terms of foreign direct investments (FDI) in the United States, there was a growing attention in Japan’s multinational enterprises (MNEs) and the contribution of their unique management style overseas. In a study, it is found that Japanese service companies are discouraged to transfer this culture in the US due to highly competitive, significant turn-over figures and ambitions of the local labor market especially in the white-collar positions. On the other hand, Japanese manufacturing firms are aided by the local government and the condition of relatively higher unemployment rate to implement their strict recruitment policies (1994).
The study also suggested that unionized subsidiaries are likely to detach from Japanese management culture at least in the aspects such as not wearing uniform, merit-based pay, promotions and performance-evaluation systems. Further, the greater the dependence of the parent company to the US subsidiary or the higher the integration in terms of resources and capabilities between them, the greater the likelihood that the parent company will transfer its management practices to the US subsidiary. In the conclusion, it is held that the gathered data showed the importance of administrative heritage and managerial beliefs in the success of the management culture transfer, while at the same time, enforcing it to political and cultural environment in the country including subsidiary’s values (1994).
The Japanese automobile industry had taken its vertical keiretsu to United States that had significant contribution for being the second largest FDI contributor in the United States. This managerial framework involved interdependence and coordination with strategic links of ancillary manufacturers that partake activities in the value chain, including the competitors, at least to the non-financial resource flow issues. Such provided Japanese manufacturers enhancement in there OLI (Ownership, Location and Internalization) paradigm wherein suppliers and other industry players had a fair share of the positive trickle down effect. As a result, out of 106 links between supplier/ ancillary and core Japanese firms in the US, 97 of which were keiretsu affiliated (1996).
In a study conducted to 446 first-tier Japanese automobile ancillary manufacturers, several findings were culminated about the factors that motivate/ discourage affiliate firms to invest abroad to serve the Japanese core firms. It is found that keiretsu affiliation was the most dominant variable. However, core firms were anxious about too much dependence to one supplier since competition and efficiency that can aid them in cutting costs would not be attained. As a result, the survey from affiliate firms showed that their dependence to the core firm was not significant due to the fact that they were frequently preferred to be small and in great numbers. Nevertheless, their presence in the US automobile industry and the inherent bias and preference to them from the core firms against local suppliers suggested that Japanese core firms did not want to risks its reputation and quality of its products, thereby, making keiretsu system a means achieve this end ( 1996)
The nature of the firms in Japan is more of a community wherein they are considered entities rather property who has reputation of its own apart from its compelling stakeholders. Japanese firms are known to sustain long-term relationship with employees (due to lifetime employment/ seniority wage system) and suppliers (due to relational trading). Also, whereas American antitrust law would apprehend non-competitive economic environment, Japanese firms situate their standing in the balance of competition and cooperation through non-competition in price rather advertising and sales. This system is supported by the government’s relational regulation that aims to protect small- and medium enterprises, including consumers especially the poor although in minimal issues. In comparing American and Japanese firms, the two conclusions cropped up; namely: the former is relatively transparent while the other is secretive and as the first the situation is the employee steals from the firm, the latter goes as the employee steals for the firm illustrated by the scandals of (, 2004).
However, these facts have slowly undergoing change. There was the introduction of performance pay rather the seniority-constrained system. Law sues against firm directors, overriding power of managers against shareholders (a move to property view) and weakening of trade unions. In addition, community-like character of the firms had eroded since speculations in the stock market became the common theme of managers, the result of foreign investors’ speculation activities. This is one indication that ownership of financial assets and money its can multiply have also disputed the previous fact that manager’s income came entirely from his salary (2004).
In business dealings, Western sincerity means free of pretense and being honest without reservations. However, in Japanese theme called Makoto, sincerity means properly discharging one’s obligations to maintain harmony. In comparison, Japanese business dealings are preferred to be carried without disruptions which is deterrence to the though of being frank in Western ideology. The latter emphasis on personal and subjective relationships in doing business has implication with a foreign-West partner. Weaknesses and threats in the venture would not be thoroughly indicated as additional burden could be trapped in the Japanese net that will hinder responsibilities and strategic actions each side would do in case of its negative effects. As a result, there is a need for the deal to be as formal as possible to eliminate personal factors that could undermine the objectivity of the relationship to the detriment of the competitiveness of the venture ( 2002).
The Japanese corporate model has ten inherent features. High quality and low cost production which embraces the two-edge business-level strategy is the belief that reducing costs through elimination of defects, rework and delay could also enhance product quality in terms of consistency and timeliness. This is intensified by multifunctional features and shorter life cycle of the Japanese products. Lean production provided total quality control, continuous improvement, flexible manufacturing among others which allows workers to develop multiple skills as the situation of Toyota. Employees are not only treated as assets but also made part of the firm community through the provision of rigid recruitment system, bonuses based on firm performance and participatory management. Permanent employment guaranteed long-term jobs for employees including male being installed in the managerial positions in their careers and seniority-based compensation. As a result, personnel department is highly respected, career development is workable, individual competition is diverted in corporate goals and unions smoothly coordinated with the middle-level management (2000).
Further, leadership by consensus promoted the harmony between formal and informal groups within the corporate structure. As a result, highly standardized products (caused by the senior and older circles) have received considerable but gradual amount of innovation (caused by relatively young and energetic employees). Strong inter-corporate networks through keiretsu affiliations is a promising business relationship wherein shareholders need not place their investments in the short-term fluctuations in the stock market rather invest it to other companies, banks and suppliers wherein capital and long-term gains can be obtained to sustained growth. While US counterparts emphasized on attractive return on investment, Japanese firms’ number one priority is its pursuit of market share. In effect, goals tend to be of long-term basis. Lastly, internal and related diversification into high growth industries led Japanese firms to redeploy their treasured employees and keep a permanent ownership of assets for the shareholders ( 2000).
Japanese corporate governance evolves around obligation, family and concensus. For local firms, obligation is stronger than other countries that entail returning a service for one that was rendered. Family, the foundation of keiretsu affiliations, transforms the economic framework of firms into personal pursuits to be part of allegiance throughout corporations especially within the industry. Consensus cripples authoritarianism of top executives in favor of winning the consent of the people even though this process results to slow and burdensome decision-making process. In addition, banks play crucial capital roles for local firms, unlike US model of market-based financial structure, which involves not only credit facilities but also financial advice and performance monitoring. Main-bank relationships are said to be the original stimulant for the emergence of horizontal keiretsu (2003).
The traditional values in Japanese management culture are individual recognition for effort and collective recognition for a job well done, advancement/ promotion bias on males and seniors, harmony in relations with line-managers and immediate supervisors, cooperation within groups, and employment security. However, there are emerging challenges and issues against this traditional view. In a recent case study, promising Japanese manager’s features are generally described as to likely resort to additional earnings for those who become dissatisfied to the current regimes and to finance quality of life (with family) that is willing to forgo employment opportunities. Thus, security of employment is faced with an alternative in employment areas that have greater challenges and achievement for individual recognition and satisfaction for a job well done. With Japanese managers realizing the need of self-esteem and personal achievement, risk-averse tendencies and reliance to job security and automatic promotion are becoming lesser significant (2003).
Conclusion
Can Japan compete? This is a question that is suited to evaluate the importance of adaptation of Japanese management culture to the international trend. For example, the traditional management practice of personal and face-to-face communication is pressured by the emergence of electronic platform as communication medium which is more efficient. In addition, the social and cultural norms run counter to innovation and risk-taking that are considered as hallmarks of today’s competition. As Japan proven its global presence not only to the US but to other developed and developing countries as well, the only way to continue the flame is the relaxation of cultural merits of business transactions. Change, thus, becomes prominent. The economic turbulence of the lost decade (1990s) could provide the motivation to do so. Since its old model is internally consistent and integrated from the family to pillars of governance and business, a new strategy more adaptive to global trends is relatively easier to execute.
Credit:ivythesis.typepad.com
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