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Case Analysis: Chapter 3 Closing Case Week 1 Summary: This case study was a very interesting look into

to Panasonics hiring practices, and how they differed in the past from today. The case study starts out by providing a description of how Panasonic traditionally took care of its workers, including providing housing and a guaranteed retirement bonus. This allows many workers to stay for life. As time went on, however, younger workers werent so keen on the lifetime work idea, and were much happier with higher wages at the times, and less rewards in the future. Finally, Panasonic went through some rough times, namely in the 1990s and 2009. These rough times led the company to abandon its old beliefs of worker loyalty, and it closed factories and laid many people off. 1) What were the triggers of cultural change in Japan during the 1990s? How is cultural change starting to affect traditional values in Japan? There were multiple factors that led to the cultural change in the 1990s. There w as a defined lack of commitment to traditional Japanese values, partially because westernization ideals were starting to creep over, and the idea that there were endless ways to make money. People of this era did not want to a mere salaryman who was tied to a company for life. They wanted the freedom of making their own decisions and have the challenge to strive to make higher wages. Our lecture makes note of differences in cultures, and this was very clear in Japan during the 1990s. The workers in western countries were enjoying economic freedoms, and the ability to make as much as they could which worked its way into the younger generation in Japan who wanted the same.

2) How might Japans changing culture influence the way Japanese businesses operate in the future? What are the potential implications of such changes for the Japanese economy? Although Panasonics workers for life formula worked for many years by providing the company with an intensely loyal workforce, things must change to allow the companies of today to be competitive in the global market. Western ideas started leaking into young Japanese workers minds many years ago, and the idea that young people can be in charge of their own destiny has taken very well in Japan (Morishima, 1992). Japanese companies realize that the workforces values are changing and the expected norms change as well. The Japanese economy will be more westernized that ever, and will eventually have to compete for skilled workers, and the wages will have to be much higher. Workers will no longer care about guaranteed housing their thoughts is that if they get paid higher, they can go out and pay for their own housing.

3) How did traditional Japanese culture benefit Panasonic during the 1950s1980s? Did traditional values become more of a liability during the 1990s and early 2000s? How so? In the 1950s-1980s, Panasonic enjoyed an immensely loyal workforce who were happy because they were being treated well and their needs were provided for. The company provided housing, discounts on amenities, and guaranteed retirement bonuses employees were truly cared for from the cradle to the grave. In return, the workers worked hard for the greate r good of the company, and took pride in everything that they did. I believe that traditional values did become more of a liability during the 1990s-2000s because the traditional system fostered long-term employees who were aging. The older employees lacked the innovation and drive of younger employees, and also could potentially demand more money (as with higher seniority) (Luthra, et al, 2013). 4) What is Panasonic trying to achieve with human resource changes it has announced? What are the impediments to successfully implementing these changes? What are the implications for Panasonic if (a) the changes are made quickly or (b) it takes years or even decades to fully implement the changes? It had become evident when Panasonic gave recruits three employment options, and most recruits did not take the traditional option, that the times were changing and the company needed to change with it. Over the years, Panasonic had attempted to alter the lifetime employment system in order to position themselves better into the future, however it would not happen overnight. The company still had many workers of the old system to deal with, and had to make the change gradually. The implications if: A) The changes are made quickly This would abandon Panasonics traditional lifetime employment, and in effect, abandon many of its loyal workers who have counted on the system. A positive implication, however, will be that Panasonic will be able to be more competitive in the global market, and be less tied to its employees. B) Takes years or even decades to fully implement the changes This will be better for the long-term employees that are in the lifetime system. Under this gradual change, however, Panasonic will continue to struggle to implement new, fresh ideas into their aging workforce. They will also continue to have significant liabilities in providing company housing and retirement guarantees. 5) What does the Panasonic case teach you about the relationship between societal culture and business success?
While it is very important for there to be a relationship between societal culture and business success, this case study illustrates that the two cannot generally co-exist perfectly. Using the examples from this case, Panasonic enjoyed a loyal workforce for many years until the way that business was done globally began to change. This change no longer left it viable for Panasonic to cater to the traditional Japanese societal culture and grow their business. The other factor is that the younger generation had different beliefs on what was acceptable for employment and they were anything but traditional. The new

westernized way of working fosters growth in a business and allows new, innovative employees to be recruited and retained.

Luthra, P., Sproule, K., & Venkataramanan, S. N. (2013). Generations at TCS: Ever Changing Workforce.

Morishima, M. (1992). Japanese employees' attitudes toward changes in traditional employment practices. Industrial Relations: A Journal of Economy and Society , 31(3), 433-454.