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GROUP RESEARCH PROJECT
Human Resource Management
Ajmal Waheed Khan
Applicability of Modern HRM Practices at Atlas Honda Cars (Pakistan) Limited.
Amin Haider Shah, MBA III-A S.M. Zeeshan Haider, MBA III-A
10th May 2008
INTRODUCTION In today's world, there are basically two types of HRM practices followed in the world. One is the western HRM practices and other is the modern HRM or the Japanese Management Practices. Both the western as well as Japanese products are very high in quality but there is a notable difference between the prices of the two products. While Ford is too expensive a car, Toyota cars are relatively much cheaper with the same specifications and similar quality. All this is the effect of the effective modern HRM practices which allow the Japanese to produce high quality products at lower cost. There are many different practices that Japanese follow in order to win the heart of their customers. However, an important point to ponder is whether these practices are being followed or can be adopted in Pakistan or not. This project describes the applicability of the Japanese Management Practices in Pakistan. The company visited in this regard was Atlas Honda Cars (Pakistan) Limited. It describes HRM practices that are currently being followed and the way in which they are being followed. In case of the practices which are not adopted, this report tells the basic reasons behind it. Furthermore in the end, it has also been recommended how can these practices be adopted in Pakistan and what are the necessary changes to be made so as to completely follow the modern HRM practices in Pakistan.
The modern HRM practices or the Japanese Management Practices are a great way to have high quality products at lower costs. These management practices are divided into three broad categories: Employment Practices, Manufacturing Practices and Cultural Practices. In order to find the applicability of the modern HRM practices in Pakistan, information from Atlas Honda Cars (Pakistan) Limited was collected and the applicability of these practices was tested. The table below gives the Japanese Management Practices and their applicability at Atlas Honda Pakistan.
Applicability at Atlas Honda Pakistan Totally Partially Not at all
Japanese Management Practice Employment Practices Lifetime Employment Core & Periphery Employees Seniority Based Pay & Promotion Low Turnover Rate Enterprise Union Selection and Continuous Training Service Overtime Satie System Job Rotation Single Status Manufacturing Practices Total Quality Control Quality Control Circles Statistical Process Control Just In Time Flexible Production Kaizen Zero Defect Ringi Team Effort Long Term Thinking Suggestion System Puntuality and Absenteeism
Cultural Practices Groupism Confucian ethics Homogeneous Society Nationalism Company Loyalty Harmony Company Song and Morning Exercise Informal Communication and Control Better than the Best Uniform Education
From the chart, it is easily seen that most of the Manufacturing Practices are being followed and it is basically the cultural practices that are not applied. The basic cause for this is the cultural differences of Japan and Pakistan. In order to apply the modern HRM practices completely in Pakistan, different measures are to be taken. Some of them include unbiased attitude of the management towards employees, and political stability in the country. The management should offer incentives, attractive and competitive salary packages to its employees in order to reduce the turnover rate. The government should devise a program and also assist poor people so as to have a uniform basic education throughout the country. Last, but not the least, the government and people should play a vital role by changing their attitudes towards each other in order to develop a nationalist approach and working hand in hand for the interests of the country.
AN OVERVIEW OF JAPANESE MANAGEMENT PRACTICES
Japanese Management Practices can be broadly classified into three categories: 1. Employment Practices. 2. Manufacturing Practices. 3. Cultural Practices. This section will give an overview of these three different branches of the Japanese Management Practices.
Some of the employment practices followed by Japanese are given bellow: LIFE TIME EMPLOYMENT (SHUSHIN KOYO) In most of the Japanese firms, there is a life long commitment between the organization and the individual. Japanese firms hire fresh graduates, train them, and keep all of them on the payroll till the age of fifty-five that is the retirement age. This system of permanent employment provides job security, guarantees livelihood till retirement brings harmony to the enterprise, results in greater human interaction and growth of fast friendship, promotes strong corporate loyalty, trust, high level of motivation, group effectiveness and total commitment on the part of the employees. There are also some disadvantages of Life Time Employment. Shah and Quraishi (as cited in Waheed, 2001) pointed out that practice of Long Term Employment contributes to increase in fixed cost and structural inflexibility. DUAL STRUCTURE CONSISTING OF CORE AND PERIPHERY EMPLOYEES Core employees are those who are permanent and enjoy the status of Long Term Employment, while the peripheries are the temporary employees. Waheed (2001) stated that there is a requirement of enormous capital costs for core industries. These industries are dominated by male workers and are producing higher value added products such as automobile, steel, textile etc. On the other hand, periphery companies are working under labor intensive technology, dominated by female, low wage, poor working conditions and involve in low value added activities such as electronic industry in Japan. Life Time Employment is less likely to exist in these periphery companies.
SENIORITY BASED PAY AND PROMOTION (NENKO) In Japanese industries, at the time of employment all the people are equally treated and they climb the ladder of seniority in the form of groups. But when they come to the age of forty, then they begin to depart. Now there comes a time, when Japanese firms account for competence and performance. Only those people are given the top posts that are competent and the other remains at their previous posts. LOW TURN OVER RATE Waheed (2001) claimed that the turnover rate in the Japanese firms is very low. The main factors for low turnover are: Life Time Employment, seniority based pay and promotion and family concept of company. ENTERPRISE UNION (INDUSTRIAL RELATIONS) There is a friendly relationship between unions and management in the Japanese firms. Waheed (2001) stated that in Japanese firms unions’ survival depends on the company’s survival. There are very rare of chances of disputes between unions and management. There is cooperation between unions and management and unions support management to improve competitiveness and profitability. They rarely oppose the policies of company. SELECTION AND CONTINUOUS TRAINING Oliver and Wilkinson (as cited in Waheed, 2001) stated that in Japanese firms, most of the recruits are taken from the best reputed institutes. After selection and before training, there is a period of induction. The aim of induction is to make them realize that they are now members of family. Then, there is a formal one-year training program for all newly hired employees. The objective of training is to bring out the potential ability of an employee. Continuous training might be the secret of Japanese success and is treated as investment. SERVICE OVERTIME (WORKING LONG HOURS) Waheed (2001) stated that the Japanese people are known to the hard workers, the world over. Japanese work more as compared to other nations. They work one to three months more per year than the Western countries. Oliver and Wilkinson ( as
cited in Waheed, 2001) stated that Japanese people work 200 hours more than the workers in United States and United Kingdom and 500 hours more than the workers in France and Germany. The main reasons for such a high lead of work are less paid vacation time and lower absenteeism. Japanese think if a worker takes holidays, he is a trouble maker. So, service overtime is a sort of regimentation on the part of management. SATEI OR KOKA SYSTEM (PERSONAL ASSESSMENT SYSTEM) The Satie determines the rate of promotion and level of monthly pay and it applies to blue-collar as well as white-collar workers excluding temporary staff. Aoki (as cited in Waheed, 2001) stated that the Satei system is very helpful in making Japanese firms more effective and it also contributes to productivity improvement. NON-SPECIALIZED CAREERS (JOB ROTATION) Japanese firms do not produce specialists. They rather produce generalists. Job rotation is one of the key characteristics of on the job training. It means the rotation of workers from one job to another. Waheed (2001) stated that due to limited upward mobility, employees may become frustrated, de-motivated and less productive. To avoid this, they are rotated to different departments of the same company. Through job rotation, workers are moulded into generalists and can perform multiple tasks. SINGLE STATUS Japanese have designed many mechanisms to minimize both conflicts of interest common to the employment relationship and to soften organizational status differentials. There is same uniform for the workers and managers. Both workers and managers travel in the same bus. Managers do not have wall offices. Both workers and managers take lunch in the same cafeteria. There are daily shop floor meeting between supervisors and workers. Moreover, collective physical exercise, company songs etc are the variable range of single status terms and conditions of employment.
Some of the manufacturing practices followed by Japanese are given bellow: TOTAL QUALITY CONTROL (TQC) United States say that we are providing 95 percent accuracy of our products but Japanese say that our accuracy start from 95 percent. Total Quality Control implies that it is everybody’s responsibility to contribute to quality and to satisfy the customers. It prevents error rather than simply uncover them. Japanese say that quality cannot be controlled through inspection and rejection of the bad product. Quality comes from making the product right in the first place by resolving the error at the spot. QUALITY CONTROL CIRCLES (QCC’S) Izumaru (as cited in Waheed, 2001) stated that Quality Control Circles are primary work group with seven to ten members employees each undertakes voluntary studies on tasks for refining quality in line with the company’s total policy and regularly hold meetings at which they discuss the results of their efforts and help one another for enhancing quality. STATISTICAL PROCESS CONTROL (SPC)/ STANDARDIZED WORK SEQUENCE Oliver and Wilkinson (as cited in Waheed, 2001) stated that principle of Statistical Process Control is that products emerging from any production process reveal two types of variations: the first is called natural or unassigned variation, because it occurs naturally in the process without a specific cause, the second is called unnatural or assigned variation which is due to specific cause. Actually in Statistical Process Control, firstly we work out the extent of a process’s natural variation and then we regularly sample the process’s output. JUST-IN-TIME (JIT) According to Waheed (2001) the main features of Just-in-Time are: • • Demand driven Eliminate buffer stocks, time, manpower, defects and waste
• • • • • •
Lean production: Adjusting production with demand Nothing more concept Quality and cost conscious System efficiency Out-put based (product) Single supplier
LEAN/FLEXIBLE PRODUCTION Japanese believe on lean production rather than mass production. They always make products according to demand. The reason for following the concept of lean production is that they do not believe in inventory system. They do not have ware houses. KAIZEN (CONTINUOUS IMPROVEMENT) The key Kaizen practices narrated by Kotelnikov (2008) are as follows: • • • • • • discipline in the workplace quality improvement customer orientation zero defects productivity improvement total productive maintenance.
ZERO DEFECTS (PERFECTION) Japanese believe in error free production. They are struggling to achieve their goal that is 100 percent accuracy of their products. They are establishing zero defect movement to achieve error free production and perfect product. RINGI (DECISION MAKING BY CONSENSUS) It is traditional decision-making process in Japanese firms. The system involves circulating proposals to all managers in the firm who are affected by an impending decision. Proposals are generally initiated by middle managers, though they may also come from top executives. In the latter case, an executive will generally
give his idea to his subordinates and let them introduce it. Managers from different departments hold meetings and try to reach an informal consensus on the matter. Only after this consensus is reached will the formal document, or ringi-sho, be circulated for approval by the responsible managers (Thomas Corporation, 2006). TEAM EFFORT/GROUP TASK Net reference stated that team work means to help others. They also take it as the functional maximization that is to improve results. True team work implies the existence of: • • • • ability of members to switch between jobs team responsibility team determination of who has to work and where team leadership
THINK LONG-TERM Waheed (2001) claimed that in Japanese firms long-term thinking has the following characteristics: • • • • long-term survival of the company long-term commitment to employees long-term commitment to customers long-term management targets
SUGGESTION SYSTEM This practice is used by Japanese firms to connect workers’ knowledge and ideas. The main purpose of this practice is to take suggestions from the workers in order to improve the quality of the products and to reduce the costs of products. PUNCTUALITY AND ABSENTEEISM This practice is one of the most important practices followed by Japanese firms. In Japanese firms, if a person takes holidays, he is considered as trouble-maker. Workers come to the office half an hour earlier. Leaving early or coming late is
considered as serious as absence. Absence is also a serious issue because they have no replacement/alternative workers.
United States says that Japan is attaining success due to its culture but actually this is not true because Japan is attaining success due to its superior management system. Some of the cultural practices followed by Japanese firms are given bellow: GROUPISM In Japanese firms: • • • • • • Groups are primary social units. Basic social unit is family. They have joint family system. To them, father is all in all. They take family concept to organizations. They take boss’s respect as father’s respect.
CONFUCIAN ETHICS Being an Asian country, Japanese Confucian ethics includes: • • • • • Loyalty and commitment to organization Respect elders Discipline, order, hierarchy, cooperation and helping each other Hard work, selflessness, education, human goodness and filial piety Common interest
HOMOGENEOUS SOCIETY Japan is a unique homogenous society. They have one dress and one religion (Buddha). There is only a little bit variation in region, religion, race, blood, genes or person. As a result, they have established mutual understanding, teamwork and very effective non-verbal communication system in business. NATIONALISM In Pakistan, loyalty leads to individual interests, then to individual interests and again to individual interests. While in Japanese organization, loyalty of workers leads to national interests, then to organizational interests and to individual interests.
COMPANY LOYALTY Since there is family concept is the Japanese firms, employees and employers take the firm as a big happy family. First of all they introduce themselves as member of such and such company and thereafter they introduce their posts in the company. Life time employment, seniority based pay and promotion and concept of leadership promote loyalty and commitment to the company. HARMONY (WA) Actually Buddhism has a greater influence on the Japanese to be more harmonious in group settings and living with others. Waheed (2001) stated that Harmony emphasizes a high degree of collaborative behavior rather COMPANY SONG AND MORNING EXERCISE In most of the Japanese firms, before the start of the work, there is company song. All the people in the organization read and discuss the business principles and also participate in the morning exercise. The purpose of morning exercise is that all the people working in the company remain fresh both mentally and physically. One person also gives the message of the day. INFORMAL COMMUNICATION AND CONTROL Waheed (2001) stated that informal communication and control is an important practice of Japanese culture. Japanese place more emphasis on informal communication and control like: • • • • • Common cafeteria Same uniform Single status Morning exercise and songs Traveling in the same bus
BETTER THAN THE BEST
The greatest ambition of Japan is to be better than best in the world in any line of culture and to provide cheapest and best quality product to others. So, Japanese want to be at supreme spot in every field. UNIFORM EDUCATION Waheed (2001) stated that the education in Japan is surprisingly uniform but the struggle to send children to a good school is very high. This high level of education may be the cause for the Japanese incredible economic growth.
APPLICABILITY OF JAPANESE MANAGEMENT PRACTICES AT HONDA ATLAS CARS (Pakistan) LTD.
Atlas Honda Cars (Pakistan) Limited comprises an assembling plant of Honda Motors, Japan located at Manga Mandi near Lahore. The company follows the Japanese Management Practices to a much greater extent. Manufacturing Practices is the place where they follow these practices the most. Now we see the different modern HRM practices being adopted at the company.
APPLICABILITY OF EMPLOYMENT PRACTICES
With respect to the employment practices, the following results were seen: LIFE TIME EMPLOYMENT Atlas Honda Pakistan wishes to maintain a long term relationship with its employees. They leave the decision of life time employment to be made by them. However, at present, they are not following this practice. The reasons they give for not adopting this practice is the difference in the attitude of the Pakistani people as compared to the Japanese. Another major cause is the difference in the living standards of the two nations. While Japanese have a simple living style, people in Pakistan tend to be more materialistic in nature. Furthermore, Japanese are much more loyal to their company than Pakistani people, who leave the organization for better opportunities. The company incurs a lot of training costs on their employees who just leave the company for the sake of higher salaries and benefits. Thus the costs of the company are wasted. Due to all these factors, offering Life Time Employment is practically not possible (Imran Farooq, personal communication, May 6, 2008).
CORE & PERIPHERY EMPLOYEES The company has the core and periphery employees. However, here the categories are transformed into the names of permanent and contractual employees. Whenever downsizing is to be done due to any reason, it is the contractual employees who have to leave the company. The contractual employees are given overtime if they work for extra hours. Overtime is not given to permanent employees. Assistant Managers and above are not given any overtime for their extra work. They are asked to choose from a cash of Rs. 700 or an extra casual leave for their compensation against their extra work. The permanent employees are however, given pension once they retire. Deputy Managers are given a Honda City from the company while the Manager and senior employees are given Honda Civic for their use. Such facilities are not provided to the employees on contract. Medical facilities, bonuses, and different basic allowances are given to both the categories, but there is a difference in the magnitude of these incentives (Imran Farooq, personal communication, May 6, 2008). SENIORITY BASED PAY & PROMOTION The criterion of promotion varies from company to company. In Atlas Honda Pakistan, an employee is promoted totally on the basis of his performance and age or seniority does not play any role. They believe that promoting a senior inefficient person will just result in a decline of productivity and furthermore, this would act as a discouraging factor for the efficient and hardworking employees, who in turn may give up the rigorous work they do to achieve organizational objectives. Thus, it is better to give the credit to the deserving person (Imran Farooq, personal communication, May 6, 2008). LOW TURNOVER Like the criteria of promotion, the turnover rate also varies from company to company. However, the turnover rate is much higher as compared to that of Japan. Last year, the turnover rate was approximately 10 %. The basic causes behind this turnover rate are the cultural differences between Japan and Pakistan. People here leave jobs for higher salaries and better opportunities. Furthermore, in Japan, a
competitor of a company is reluctant to select an employee of its professional rival, which is simply not the case in Pakistan. Most of the workers (almost 80 %) who leave the organization are the fresh graduates who only stay at the company for a year or two and leave the company for better opportunities and better benefits (Imran Farooq, personal communication, May 6, 2008). ENTERPRISE UNION The company does have an enterprise union which does the collective bargaining and keeps the interests of the employees and the organization in the same direction. The purpose of having an enterprise union is that the internal employees are far more understanding than the external people and can serve the purpose of the bridge more effectively (Imran Farooq, personal communication, May 6, 2008). SELECTION AND CONTINUOUS TRAINING Honda is a 60 year old company and it gives continuous training to its employees. Selection is made totally on merit. Selection is made at the base level. It is seldom a case that a person is being recruited at a middle management or higher level. At present, training is done internally only but efforts are being done to establish the external trainings. There are courses which are meant for each and every employee. Alongwith the general courses, they also offer specialized courses for different designations, such as Logistics, Engineers and Managers e.g. Honda Manager Learning Program is devised specifically for the Deputy Managers and above (Imran Farooq, personal communication, May 6, 2008). SERVICE OVERTIME Executive people are not given any overtime. They have to choose from a compensation of Rs. 700 cash or an extra casual leave. However, overtime is given to the employees on contract basis. The reason for not giving overtime to the permanent employees is their much greater number. As for the executives, giving overtime to each one of them would call for a much higher fixed cost to be incurred by the company. Thus, a non monetary compensation of an extra casual leave would serve as a useful compensation for satisfying the employee (Imran Farooq, personal communication, May 6, 2008).
JOB ROTATION Job rotation is adopted only in the production area so that the worker can have the technical know how of the whole production process. It is less common in the Junior Management while the Top and Middle Management remain at their positions. Atlas Honda believes that applying job rotation in the office would be irrelevant to the nature of work of a person. In Pakistan, people tend to focus more on specialized fields, so a marketer may not find it comfortable in the finance department; hence he would feel dissatisfied with the job. On the other hand, he may not perform well in other department as he could do it in his own field. Furthermore, Atlas Honda has only 16 managers in Marketing and Human Resource department and 17 in Finance department so applying job rotation to such a small number would be less useful to the organization (Imran Farooq, personal communication, May 6, 2008). SATEI (PERSONAL ASSESSMENT) SYSTEM Personal Assesment System more or less of the Japanese style is followed. The formula used for the promotion of a person includes performance of a person in the previous years, the performance in the current year and his intra-department and interdepartment reputation. As for salary determination, the formula includes the previous salary of the person, inflation rate, his performance in the organization and his extent of work in compliance with the objectives of the organization (Imran Farooq, personal communication, May 6, 2008). SINGLE STATUS Like in Japan, all the employees wear the same uniform and only way to differentiate is their company I.D. cards. They all sit in the same common offices and if a worker wants to meet the CEO, there is no barrier in between. All the employees eat in the same cafeteria. They follow the queue system and no one is given priority over anyone. If a Manager is standing behind a worker in cafeteria, he cannot force or pressurize him to leave the place for him. He would rather wait for his turn. However, the common traveling of the workers is limited to some extent. The Deputy Managers are given Honda City while the designations of Managers and above are given Honda Civic for their use (Imran Farooq, personal communication, May 6, 2008).
APPLICABILITY OF MANUFACTURING PRACTICES
Most of the Japanese Manufacturing Practices are being followed by the Atlas Honda Pakistan. Now, we discuss each manufacturing practice that is being followed by the company. TOTAL QUALITY CONTROL Total Quality Control is strictly observed strictly in compliance with the standards set by the Headquarters (Japan). The product is checked at each step and error is removed right there and then. This saves the company from wastage cost, and hence there remains no need of the Quality Assurance Department (Imran Farooq, personal communication, May 6, 2008). QUALITY CONTROL CIRLCES In case of the Quality Control Circles, Honda uses the term New Honda Circle. It is a self-triggered group activity that includes 5 – 7 people. They can be from the same department as well as from different departments. They identify a departmental level problems or an organizational problem and they hold meetings, brainstorm and share ideas to find solutions to it. The basic issues discussed in the meetings are cost, efficiency and quality. There are various groups working on different problems within the organization. Open participation of the people is invited. The company conducts a competition between these groups. Each group is given a chance to present the ideas to their identified problems. The President and Vice President of the concerned department sit in the presentations, listen to their ideas and decide the best group on the basis of the contents and benefits to the concerned department and eventually, the organization. The best group is sent to the world convention held which enriches them with a vast exposure to the other firms. The second best group or the runners-up are sent at a Regional Activity conducted every year within a specific region. In case of Pakistan, the concerned region is Asia and the competition can be held in any Asian country (Imran Farooq, personal communication, May 6, 2008)..
STATISTICAL PROCESS CONTROL As in case of the Total Quality Control, the Statistical Process Control is strictly followed at the line. Tasks are performed in a definite sequence with the compliance of the practices followed in Japan. They are given the name of Set Operating Procedures, which implies that things are to be performed in a definite sequence and no compromise will be performed in this regard. These standards are strictly followed all over the world at any of the Honda assembling plants (Imran Farooq, personal communication, May 6, 2008). JUST IN TIME Atlas Honda Pakistan does not follow the Just in Time Approach. They rather adopt the Just in Case approach in their working. They keep stocks of the manufacturing parts due to the poor infrastructure which may result in the delayed supply of the parts. The infrastructure in Pakistan is much underdeveloped as compared to that of Japan. Furthermore, the attitude of the people of Pakistan is much more casual compared with that of Japan. Another reason of not following the Just in Time approach is that most of the parts needed to assemble the car are not manufactured in Pakistan. They are to be imported by air shipments. The delay in flights and the delay in transportation can result in ineffective utilization of the time, hence forgoing the optimal productivity. Therefore, keeping stocks in Pakistan is a necessity (Imran Farooq, personal communication, May 6, 2008). FLEXIBLE PRODUCTION The production at Honda is based on different factors. Most important factor is the market demand of their product. They do not adopt the lean production phenomenon but they use the flexible production method. The plant needs to be utilized at 100% efficiency so as to minimize the fixed costs. The units produced in 2006 were 30000 and those produced in 2007 were 17000 whereas the capacity of the plant was 20000 units (Imran Farooq, personal communication, May 6, 2008).
KAIZEN (CONTINUOUS IMPROVEMENT) Kaizen is very much common at the Atlas Honda Pakistan. The individual makes a proposal for the improvement of productivity or quality of the product as well as the workplace conditions. He then gives the proposal to his supervisor. The supervisor does not reject any proposal, as it would prove be demotivating factor for the individual who gave the idea. The idea is taken into consideration, validated and if feasible, it is implemented. The individual who gave the original idea is given incentives in the form of world tour of Honda factories where he can get a vast exposure and groom his personality (Imran Farooq, personal communication, May 6, 2008). ZERO DEFECT The zero defect practice is followed at Atlas Honda Cars. The aim at the production is to attain perfection. The product is examined at each stage and it is corrected right there and then before getting it into next stage. As a result, the final product obtained is free from all defects and an efficiency of almost 100% is reached. Since all the departments are located within the same factory, the problem can be diagnosed, discussed and solved right there and then (Imran Farooq, personal communication, May 6, 2008). RINGI (COLLECTIVE DECISION MAKING) The decision making at Atlas Honda is collective. The management of course is the main decision maker but the decision making is done after taking the views of everyone concerned with the problem. The democratic way is adopted generally. There is no need of formality and no protocol for a higher designation exists. Hence, it allows more informal and unblocked communication between people who are thus motivated and participate in the decision making (Imran Farooq, personal communication, May 6, 2008). TEAM EFFORT Teams are much common part of the company. People from the same as well as different departments are grouped as teams. They are assigned different set of tasks. They brainstorm and hold meetings on the issues like output, quality of product and customer demands. In the end, they present their ideas to the concerned
authorities. They are accountable for their progress and the tasks they perform to achieve their objectives (Imran Farooq, personal communication, May 6, 2008). LONG TERM THINKING The long term thinking practice is adopted partially. The basic production instructions are given from the headquarters. Everything is planned and developed in the R & D wing at the Headquarters. The regional plants cannot plan to launch a different vehicle in Pakistan. All they can do is to make slight modifications in the model of the car such as Interior, Seats, and Music System after the approval from the Headquarters. This is done so as to cater the potential market as well as to compete with the rival companies in the region (Imran Farooq, personal communication, May 6, 2008). SUGGESTION SYSTEM Suggestions from employees are taken so as to improve the product quality and eventually satisfying the customers at a greater extent. The employees get motivated once they are asked to give their views. The useful suggestions from them help in increasing the productivity of the organization (Imran Farooq, personal communication, May 6, 2008). PUNCTUALITY AND ABSENTEEISM The issue of punctuality and absenteeism is of much importance in the company. The company has its own pick and drop service which takes a 50 minutes time to get the people from the city to the factory which ensures complete punctuality and a minimum chance of getting late at work. The working calendar is planned at the beginning of the year. Total working days in a year are 261 and holidays are planned at the beginning of the working year. The absenteeism rate is below 4.5%. This is because at the major cultural functions like Eid and Independence days, the employees are given a complete week off. This serves as a sort of long holidays. Furthermore, the employees can cash their unavailed casual leaves. Thus, all these measures prevent absenteeism to a much greater extent (Imran Farooq, personal communication, May 6, 2008).
APPLICABILITY OF CULTURAL PRACTICES
Most of the cultural practices of Japanese are not being followed here and this is because of the different cultures and attitudes of people. The applicability of the Japanese Cultural Practices is discusses in detailed below. GROUPISM Groupism is experienced to some extent only. Most of the employees want to work individually and the feelings for the profession vary from person to person. Some people are more interested to make their individual identity than as a team member while the rest are loyal to the organization. However, since our culture promotes unity and common interest, groupism is practiced to some extent but not as much as in Japan (Jamshaid Siraj Yousafi, personal communication, May 6, 2008). CONFUCIAN ETHICS Youngsters today have different perceptions about their family life and professional life. While the family life is believed to sincere and having common interest, they believe professional life full of politics and leg pulling. Confucian ethics are however followed to a some extent but not completely as in Japan due to the generation gap and the changed perception of the young employees at present. Respect for elders is a part of our religion and culture but people now are looking for shortcuts and hence, they become undisciplined and do not concentrate on working hard (Jamshaid Siraj Yousafi, personal communication, May 6, 2008). HOMOGENEOUS SOCIETY Pakistan has a heterogeneous Society which can be differentiated notably on the basis of race, sects, region and languages. However at Honda Pakistan, this heterogeneity does not makes any negative impact over the working of the people and effective management ensures that no dispute arises on the basis of any racial or regional differences (Jamshaid Siraj Yousafi, personal communication, May 6, 2008).
NATIONALISM The spirit of nationalism in Pakistani people is on a lesser priority. The people of Pakistan are normally selfish in nature. Furthermore, the heterogeneous society of Pakistan acts a barrier in the nationalist approach. People first look at their personal interests, and are not at all bothered about the national interests. They are rather looking to find ways to get on the top spot as soon as possible. They desire a high pay without doing anything (Jamshaid Siraj Yousafi, personal communication, May 6, 2008). COMPANY LOYALTY People in Pakistan are more committed than to be loyal. There is a notable difference between the two. Loyalty is one way and an unconditional term, while commitment is a two way conditional term. A loyal employee always stands for the interests of the company irrespective of the salary or status given to him. On the other hand, commitment means that a person is looking after the benefits he is getting against his services rendered for the company. In Japan, people are loyal to their companies but in Pakistan, people stay with the company only till they are getting the desired benefits against their services. People leave for other jobs if they are offered higher salaries or better facilities, hence showing company disloyalty (Jamshaid Siraj Yousafi, personal communication, May 6, 2008). HARMONY The phenomenon of harmony is almost inapplicable. Leg pulling dominates and as the people are selfish, they look after their personal interests first than their joint interests. Furthermore, in some cases, competition is unavoidable. For example, if there is one post of Deputy Manager to be filled from three Assistant Managers, then it is impossible to expect a lack of competitive behaviour. However, competition is unannounced but people are well aware of its presence (Jamshaid Siraj Yousafi, personal communication, May 6, 2008). COMPANY SONG AND MORNING EXERCISE Company song is not sung at the start of the day as it is in Japanese, and most of the people are unaware of the language. Furthermore, translating it may complicate and change the entire the meaning and zeal. However, morning exercise is practiced.
At 7:50 a.m., the bell rings as a signal to the beginning of exercise. The exercise continues from 3 – 4 minutes. Plants are away from factory and exercise is done so as to warm up the employees before getting them to work. People gather in big areas as groups and one person steps out and leads the steps of exercise. Senior management can perform their exercise within their office place. The exercise includes head rotation, arm rotation and body rotation etc. (Imran Farooq, personal communication, May 6, 2008). INFORMAL COMMUNICATION AND CONTROL Since all the management sits in the same hall irrespective of designation, the way of communication at Atlas Honda Pakistan is informal and people can interact freely with each other without any fear. The worker on the line can directly talk with the Manager without any barrier. Since all the departments are located within the same factory, the informal and free communication can help in resolving the problem right there and then (Jamshaid Siraj Yousafi, personal communication, May 6, 2008). BETTER THAN THE BEST People in Pakistan do not believe in working hard and making continuous improvements. They rather want to work for the time that is sufficient enough to get the job done. Japanese are hardworking people while Pakistani people are looking to shortcuts. The different psychology of the two nations forbids the continuous improvement here in Pakistan (Jamshaid Siraj Yousafi, personal communication, May 6, 2008). UNIFORM EDUCATION Education in Pakistan is diverse in nature. While some are educated till primary, the others are matriculates and even some graduates. The literacy rate of 43.4% includes those people who can only write their names. Thus, the organization faces problems at the workers level in order to bring them at a uniform standard. However, there is a fixed criteria for hiring managerial level jobs so the problem of diverse education is minimized in this case (Jamshaid Siraj Yousafi, personal communication, May 6, 2008).
ANALYSIS AND RECOMMENDATIONS
From the information collected from Atlas Honda Cars Pakistan, we can see that most of the Japanese Manufacturing practices are being followed. We can also see that the majority of the cultural practices are not being adopted. Employment practices are followed partially whereas some of them are not being followed. First of all, we analyze employment practices which are not followed or partially followed. It is very difficult to apply Life Time Employment in Pakistan, because of its expensiveness. However, once applied, it would save the company from many other costs such as training, orientation costs etc. First of all, there needs to be a total change in the attitudes of the people so that the Life Time Employment may be put into practice. They need to show loyalty towards the organization. The company on its part should offer Life Time Employment to only those people who have stayed for a significant period with them and performed really well. They should offer attractive benefits to the Life Time Employees which would motivate the other employees to show greater organizational loyalty and hence, offered Life Time Employment by the company. The seniority based pay and promotion is applicable in Pakistan to some extent, especially in public sector. However, such a system can bring more demerits than merits as promoting an employee just for the sake of being senior would discourage the good performers and they would stop working hard. People in Pakistan are less patient and adopting seniority based promotion than performance based can result in a great percentage of employee turnover, hence increasing the company's cost of recruitment, selection and training. The percentage of the turnover can be reduced by offering competitive salary packages and facilitating the job of the employee through the improved working conditions. Flexi time approach is a method that can facilitate the working conditions of a worker and can make him comfortable with his job. With the demands of the employee fulfilled and the working environment comfortable, there remains no logical reason for the turnover rate to be high.
Job rotation is very difficult to apply in Pakistan. As Pakistani employees tend to be specialists than generalist, they face a lot of difficulty in this phenomenon. However, the job rotation should be done more often in the junior management and then the employee should be kept into his own field. The method of job rotation currently adopted by Atlas Honda is suitable enough. The only change needed to be made is a more frequent job rotation of the lower management. Now we analyze the Manufacturing practices currently not followed. Just in Time approach is almost impossible to be applicable in Pakistan, at least for another decade. The basic reason behind this is the poor infrastructure of Pakistan. There are no chances of a remarkable improvement in it within the near future. Hence, the Pakistani companies need to rely on the Just in Case approach. Long term thinking can be applied only if the tastes of the customers stay fixed for a longer period of time, which is not possible. Customer wants change from day to day in Pakistan and Pakistani people are generally not stable. They are always after new technologies. So to think for a long term for Pakistani customers may not prove fruitful. Moving towards the cultural practices, we can see that Groupism and can be adopted if the influence of western culture is eliminated and we follow our traditional culture and our religious practices. But this change is difficult to implement with the changing environment of the country. Homogenous society cannot be brought into Pakistani culture in near future. The only way to bring it into practice is through inter marriages, i.e. people of a specific region should be married with the people of other regions. However, this is easier said than done and will take decades to see Pakistan as a homogenous society. Even then, there is a small chance of this practice being practically seen. In order to adopt nationalism, the first step is to be taken through the higher authorities. They need to show that they care for people and the country and set themselves as the role models. The people on the other hand, should change their
attitudes and recognize that their work is going to benefit their country. Instead of working and becoming an asset of other countries, why not work hard for your own country? The attitude of the people can be changed by offering them the same living standards they can get while working in another country. Political stability should be maintained as it plays a vital role in developing a nationalist approach. Harmony and Company Loyalty will take a lot of time to be practically seen into the Pakistani system, as Pakistani people are naturally more keen towards their personal interests and thus, less loyal to the company. Company Loyalty can be achieved if the employees are given appreciation and a share in the credits for the success. Such non-monetary rewards and recognition of employee's work serve as a motivational tool for an employee's loyalty to his company. The element of favouritism and biasness must be eliminated within the top management and it should be ensured that only performance based rewards would be given. Only in this way, people would be able to work together in groups and harmony would be achieved. In order to have uniform education, the Ministry of Education needs to set certain rules and regulations making education to a certain level compulsory for every Pakistani and ensure that the rules are being followed. As receiving education is never for free, so Government should finance the education of the poor citizens of the country who are living a hand to mouth lifestyle. People should also realize that being educated is in their best interest as well as the interest of their country. Incentives should be given to the educated citizens which would motivate the other people to get education. Achieving uniform education in Pakistan too tough a task and would take a lot of time to be achieved.
Kotelnikov, V. (2008). Kaizen: The Japanese strategy of continuous improvement. Retrieved April 25, 2008, from http://www.1000ventures.com/business_guide/mgmt_kaizen_main.html Thomas Corporation (2006). Japanese Management Techniques. Retrieved April 25, 2008, from http://www.referenceforbusiness.com/encyclopedia/Int-Jun/Japanese-ManagementTechniques.html Waheed, A. (2001). Modern HRM Practices: Contours, Characteristics and Relevance to Pakistan. Peshawar: Pakistan Academy for Rural Development.
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