Japanese Management
Econ. J. of Hokkaido Univ., Vol pp
Japanese Management Practices Past and Present
Peter Firkola
This paper introduces key aspects of personnel management practices in Japanese companies. Japanese management is first discussed from a historical and cultural perspective. The main characteristics of traditional personnel management practices are then looked at. Finally, recent trends and changes in these personnel management practices are examined. It was found that Japanese companies have adapted their personnel practices in varying degrees to deal with the changing economic environment while maintaining parts of the traditional management system. JEL Classification: M12, M51 Keywords: Personnel management, Japanese-style management, Lifetime employment, Seniority, Enterprise unions
1. Introduction
In order to work in Japan or do business with Japanese companies, it is important to have an understanding of Japanese management practices. During the 1970s and 1980s, the personnel practices of Japanese companies were seen as one of the keys to the Japanese economy’s success, while often seen as unique and mysterious in other countries. During the 1990s, when the Japanese economy went into recession, these same personnel practices were seen as a large part of the problem. Much has been written about the demise of these traditional management practices. As well, foreign media often place too much emphasis on special cases such as Nissan Motors. Thus, one can get a distorted picture of what is happening in most Japanese companies. This paper aims to help readers understand management practices in Japanese companies. It first looks at the origins of Japanese management, followed by a discussion of the key characteristics of traditional management practices. The final section will explain how management practices have been changing over the past decade as a result of changes in Japanese society, the Japanese economy and the global economy. Japanese management refers
Japanese Management Practices Past and Present
Peter Firkola
This paper introduces key aspects of personnel management practices in Japanese companies. Japanese management is first discussed from a historical and cultural perspective. The main characteristics of traditional personnel management practices are then looked at. Finally, recent trends and changes in these personnel management practices are examined. It was found that Japanese companies have adapted their personnel practices in varying degrees to deal with the changing economic environment while maintaining parts of the traditional management system. JEL Classification: M12, M51 Keywords: Personnel management, Japanese-style management, Lifetime employment, Seniority, Enterprise unions
1. Introduction
In order to work in Japan or do business with Japanese companies, it is important to have an understanding of Japanese management practices. During the 1970s and 1980s, the personnel practices of Japanese companies were seen as one of the keys to the Japanese economy’s success, while often seen as unique and mysterious in other countries. During the 1990s, when the Japanese economy went into recession, these same personnel practices were seen as a large part of the problem. Much has been written about the demise of these traditional management practices. As well, foreign media often place too much emphasis on special cases such as Nissan Motors. Thus, one can get a distorted picture of what is happening in most Japanese companies. This paper aims to help readers understand management practices in Japanese companies. It first looks at the origins of Japanese management, followed by a discussion of the key characteristics of traditional management practices. The final section will explain how management practices have been changing over the past decade as a result of changes in Japanese society, the Japanese economy and the global economy. Japanese management refers
References: Craig, T. 2002 , Nihonteki keiei , Bird, A. Ed. , Encyclopaedia of Japanese Business and Management, Routledge, London. Kono, T. 1988 , Corporate Culture Under Evolution, Kodansha, Tokyo. Odaka, K. 1993 , The source of Japanese management , Durlabhji, S. and Marks, N. eds. , Japanese Business: Cultural Perspectives, State University of New York Press, New York. Tsutsui, W.M. 1988 , Manufacturing Ideology: Scientific Management in Twentieth-Century Japan, Princeton University Press, Princeton, NJ. Odaka, K. 1993 , The Source of Japanese Management. Sakudo,Y. 1978 , Showa-Kyoho no Keiei Management in the Showa-Kyoho Period , Diamond-sha, Tokyo. Odaka, K. 1993 , The Source of Japanese Management. This is often referred to using the German word Gemeinschaft community organization in which a group of individuals are bound together by mutual affection and sentiment as opposed to only contractual obligations and the organization is seen as a community such as a family. Hsu, R. Ed. , 1999 , The MIT Encyclopedia of the Japanese Economy 2nd. ed. , MIT Press, Cambridge, MA. Abegglen, J.C. 1958 , The Japanese Factory: Aspects of Its Social Organization, Free Press, Glencoe, . Kono, T. and Clegg, T. 2001 , Trends in Japanese Management: Continuing Strengths, Current Problems, and Changing Priorities, St Martins Press, New York. Bird, A. 2002 , Permanent employee , Bird, A. Ed. , Encyclopaedia of Japanese Business and Business Management. Sasaki, N. 1990 , Management and Industrial Structure in Japan 2nd ed. , Pergamon, Oxford. Chen, M. 2004 , Asian Management Systems: Chinese, Japanese and Korean Styles of Business, Thomson Learning, London. Hagiwara, S. 2002 , Enterprise unions , Bird, A. Ed. , Encyclopaedia of Japanese Business and Management. Reischauer, E.O. 1988 , The Japanese Today, Tuttle, Tokyo. Emmot, B. 2005 , Survey of Japan: the sun also rises , The Economist, October , pp. - . Japanese Management Practices Past and Present Kunii, I. 1999 , Sony’s shakeup , Business Week, March 22, pp.24-25; The Economist 2001 Layoffs with no sign of revival , The Economist Online Edition, August 30; The Japan Times 2004 Matsushita to cut jobs despite Return to profit , The Japan Times Online Edition, June 21. The Economist, 2002 , Japanese corporate restructuring: uncut , The Economist Online Edition, July 18. MHLW, 2003 , White Paper on the Labour Economy: Economic and Social Change and Diversification of Working Styles, Ministry of Health, Labour and Welfare in Japanese , Tokyo. Asahi Shimbun Survey, 2001 , Collapsing Japanese-style employment , Asahi Shimbun in Japanese , November , p.20. Daiichi Seimei Research Institute, 2003 , A Survey of Future Lifestyles, Daiichi Seimei Research Institute in Japanese , Tokyo. MHLW, 2003 , White Paper on the Labour Economy: Economic and Social Change and Diversification of Working Styles. JIL, 2003 , Survey on Personnel Administration Strategy of Companies and Workers’ Consciousness about Employment, Japan Institute of Labour in Japanese , Tokyo. Economic Planning Agency, 1998 , A Survey of Corporate Behaviour, Economic Planning Agency in Japanese , Tokyo. JIL, 2003 , Survey on Personnel Administration Strategy of Companies and Workers’ Consciousness about Employment. MHLW, 2001 , Survey on Working Conditions, Ministry of Health, Labour and Welfare in Japanese , Tokyo. MHLW, 2002 , Survey on Employment Management, Ministry of Health, Labour and Welfare in Japanese , Tokyo. Discussion with Japanese company employees, August 2005. Takahashi, N. 2004 Making the most of Japanese seniority system , Nihon Keizai Shimbun in Japanese , June , p.27. Kyodo News 2003 Spring wage talks going the way of the Dinosaur? , Japan Times, March 4, 3. Nihon Keizai Shimbun, 2006 , Strategic allocation in next generation of wage increases , Nihon Keizai Shimbun in Japanese , March 16, p. . Speech by Carlos Ghosn, Nissan CEO at Tokyo University, November 2003. Ghosn, C. and Ries, P. 2004 , Shift: Inside Nissan’s Historic Revival, Currency, New York. Ghosn, C. and Ries, P. 2004 , Shift: Inside Nissan’s Historic Revival. Mitarai, F. 2002 , How east meets West at Canon , Business Week Online, July 13. Mitarai, F. 2005 , Japanese-style management makes most of workforce , Nikkei Business in Japanese , January , pp.62-63. Rusling, M. 2006 , Japan Airlines losing altitude , Asia Times Online, March . Ujimoto, V. 2002 , Japan Airlines , Bird, A. Ed. , Encyclopaedia of Japanese Business and Management. Nikkei Weekly, 2006 , JAL offers murky plan to halt descent , Nikkei Weekly, March , p. . Nikkei Weekly, 2006 , Safety record tops list for JAL’s new boss , Nikkei Weekly, Peter Firkola March , p.28. Mitarai, F. 2006 , Mitarai: competition will rest on labor , Nikkei Weekly, February , p.11. Abegglen, J.C. 2004 , 21st century Japanese management , Nihon Keizai Shimbun in Japanese , Tokyo.