Japan-Management styles and practices

The Japanese management techniques have long been the topic of discussion. The Japanese system has been the set of practices to be emulated. The success of Japanese model in 1970s and 1980s has long passed but scholars and academics still continue to talk about the production methods, human resource management, corporate governance and culture under this model. After the recession of 1990s the Japanese model had largely disappeared and was referred as Japanese disease which entailed workaholism, gender biasness, etc. However Japan managed to work its way through recession. The management styles, practices and culture remains to be a subject of high interest and still considered important. Some of the most important aspects of Japanese management system are discussed in the following paragraphs. Corporate Governance: In past the banks would play the central role of large structured corporations with horizontal structure of financial and industrial interests and horizontal structure of supplier groups. The financial institutions were the major share holder in Japanese conglomerates. Now the system is shifting away from particular Japanese model. The role of banks has declined and is moving toward the equity capital financing. The role of the banks as the prime source of capital has reduced drastically. The ability of the banks to rescue the failed companies has diminished after the Asian bank crisis which in turn reduced the bank s role in corporate governance. On the other hand there has been increase in the foreign ownership in Japanese firms and this pressurises the restructuring of the system bringing it in lines with the Anglo Saxon system. The reduction in board size with no worker representation is a preferred model which of course resembles the Anglo Saxon model but it is not mandatory in Japan but the fact that it is a workable option indicates the change in the corporate governance system. Culture: Collectivism leads to greater interdependence and faith is based on liaisons and connections than in individualist culture. Japan is a highly characterised as a Collectivist society. The concept of Wa identifies harmony, co-operation, companionship and the trust in the situation of work. The hierarchy is structured along the Confucian lines. The Confucian system places importance on hierarchy and age continues to be the sign of authority. The consequences of this system might lead to more stress level among employees, highly segmented labour markets and greater inequality. Human resource management: Employment security: In Japanese business model long term employment remains the most distinctive feature as compared to Anglo Saxon system. The benefits include undistorted supply of labour, high commitment and trust developed between employees and firms. The women, temporary workers and subcontractors are excluded from the long term employment. The reluctance to dismiss the workers continues to be one the key issues.

There is relatively little multi-unionism at establishment and 85% of unionised establishments have only one union. Unions: The enterprise unionism is pervasive in Japan. In many firms they have introduced performance based elements particularly pay ad promotions based on merit but this yet needs to pervade the system. They pay is based on the education of the employee or the number of years they have been employed in any particular organisation. lack of innovation and discouragement of new hires. It has been argued by some authors that the concept of total quality management creates hindrance in development of innovation and is unfavourable tobuild up new ideas. continuous improvement which laid the foundation of quality management in the Japanese system followed by Quality circles. The employee relations in Japan are best characterised as partnership relationship. Due to recent demographic changes in Japan the talent pool has shrunken and if the companies keep implementing seniority based approach they aren t far enough to lose out to smaller as compared to performance based companies where pay. It was seen as an essential part of management rather than the control department. Moreover the significant change in the industries. It all started with the advent of Kaizen. the large re-structuring and the movement of production in low cost countries has been done in consultation with the unions. Since only full time employees are restricted to unions and more labour moving toward service resulting in shrunken unions. Production Methods: American origin of many quality advances cannot be denied but it was in Japan that they found the clearest expression of quality.Seniority system: The seniority system and long term employment run one behind the other. This aspect of Japanese model reinforces trust and commitment but it also has some downside including employee satisfaction. promotion and remuneration is entirely based on merit of an employee. Total quality management. Statistical quality control and Just in time or lean production became the part of widely successful Japanese industries. . There has been a sharp decline in unions due to the shift of businesses away from manufacturing and toward the service sector.

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