Managerial Decision Making in (he U.S.

and Japan

A number of researchers (Kelley & Reeser, 1973; Whitely & England, 1980; Hofstede, 1983, 1984) have
examined the values of Japanese and American managers which might be related to their approaches to
decision making. A value, which has received a great deal of attention, is individualism-collectivism. Early

(1989) explains, "In an individualistic culture, people feel proud of their own accomplishments and
derive satisfaction from performance based on their own achievements, whereas individuals from a
collectivistic culture derive pleasure and satisfaction from group accomplishment" (p. 568). This value
seems to link with one's propensity to cooperate with others and promote group harmony. Early (1988)
further believes that in a collectivist culture it is important to attain group goals and safeguard group
welfare.

Whitely and England (1980) found that Japanese managers were more concerned with collective values
such as deference to superiors and company commitment and less concerned with individualism than
American managers. Kelley and Reeser (1973) studied Japanese-American managers in Hawaii and
found that they placed heavy emphasis on commitment to the company, respect for formal authority,
and team performance as opposed to individual superiority. These values are similar to those held by
managers in Japan. Hofstede (1983, 1984) has conducted research on managerial values and practice in
subsidiaries of a large multinational corporation in 67 countries. His results also showed that Japanese
managers placed less emphasis on individualism than Americans and that consensus and harmony in
decision making were considered especially important. He also found that Japanese managers have less
tolerance than U.S. managers for deviant ideas (1984, p. 96). Finally, Sullivan and Nonaka (1986) found,
in contrast to American managers, that Japanese managers prefer that many employees (versus a few
individuals) gather diverse information prior to decisions.

However, as suggested by Sullivan and Nonaka (1986), the situation may be more complex than simply
discussing individualist versus collectivist values. Lebra (1984) argues that Japanese decision makers may
appear to be harmonious because conflict is actually surfaced and managed outside of visible face-to-
face meetings; and harmony and conflict are not mutually exclusive. Ishida (1984) distinguishes between
Omote (the formal arena) and Ura (the informal arena). In the Omote no conflict should exist and no
concessions should be made. However, in the Ura conflict exists but is usually solved implicitly and
negotiation is possible if neither party loses face and both can maintain integrity (Ishida, 1984, p. 17).
Lebra (1984) notes additional considerations including the process of "anticipatory management" which
reflects the individual managing conflict in a "preventative manner before it is generated" (Lebra, 1984,
p. 42). Thus, if someone anticipates conflict, they may refuse involvement in the overt situation, even if
personal gain is sacrificed. Or, a third party may mediate conflict before the involved parties confront
each other.

The notion that harmony and conflict are not mutually exclusive is intriguing. Lebra (1984) explains:
When we focus on conflict, we seem to accept the conflict model and reject the harmony model as if the
two were mutually exclusive. This is an oversimplified dichotomy that fails to capture reality. In fact, the
logic of bipolarization may well be reversed: the more harmony-oriented, the more conflict-sensitive .. .
The norm of harmony may be precisely what makes people more aware of conflicts with others,
conflicts between their self-interest and obligations, and so forth (p. 56).
In effect, the desire for harmony may heighten perceptions of differences over issues. These differences,
however, may be resolved prior to direct confrontation between involved parties. Krauss, Rohlen, and
Steinhoff (1984) summarize that in Japan "the most legitimate, effective, and frequent conflict-
management mechanisms are the informal and personal ones of small-group discussion, personal
communications, and the use of go-betweens" (p. 389).

This shared understanding of the value of harmony and resolving conflicts "behind the scenes" makes it
possible to have greater de facto delegation in decision making while still ensuring that decisions are
controlled by values which stress the overall good of the organization. Lincoln, Hanada, and McBride
(1986), in a survey of 55 American and 51 Japanese manufacturing plants, found evidence of this type of
delegation. Using a variant of the Aston Centralization scale, they found greater formal centralization in
Japanese plants. However, a measure of de facto centralization (the extent to which decisions were
delegated in practice) showed that actual decision making was less centralized in the Japanese sample
(1986, pp. 352-353).

Similarly, Kriger and Solomon (1990), in a study of parent/subsidiary relationships in U.S., Swedish, and
Japanese multinational corporations found that Japanese parent companies tend to practice greater
delegation of decision making to their subsidiaries, but they also tend to place Japanese managers in
senior positions in the subsidiaries as a way of ensuring that the firm's values are represented.

Taken together, the studies discussed in this section suggest that the decision process in Japanese firms
is more time consuming than in American firms, particularly in the early phases of the process: the
identification and design phases in Mintzberg, Raisinhani, and Theoret's (1976) terms. The development
of shared understanding in the early phases of the decision process becomes especially important in the
Ringi method (see Yamaki, 1984; Yoshino, 1976; Lee & Schwendiman, 1982). In this process, lower-level
employees who make decisions requiring upper management's approval must prepare a document
(called the ringisho) defining the problem and suggesting a solution to it. This document is circulated
among the departments affected by the decision, each of which affixes its seal of approval, and finally
works its way to top management for the final decision. In the absence of explicit policies and guidelines
for making the decisions, the lower-level employee must determine which solution is likely to be
supported by the top executive but must also introduce his own ideas in a limited way. Thus, conflict is
"worked out" prior to the final decision by top management. Though many Japanese companies have
modified and streamlined the Ringi system, it is still widely used (Lee & Schwendiman, 1982, pp. 262-
272)