International Management

International Ninth Edition Luthans | Doh

Fred Luthans

Management Jonathan P. Doh

Ninth Edition

Japanese Management

Comparative Management
By: Masroor Ali Soomro
International Management Ninth Edition Luthans | Doh
International Management Ninth Edition Luthans | Doh

Japanese Microenvironment
Some Quick Facts
Area: about 378,000 sq. Km.
High Population density: Over 127 million people.
Language: Japanese spoken by 99% of population.
High Ethnic, racial and cultural homogeneity
Religion: Buddhism and Shinto.
Longest overall life expectancy rate in the world.
International Management Ninth Edition Luthans | Doh

Japanese Microenvironment
Japanese Culture draws from early Confucian roots (from China) including:
A tendency of groupies
Hierarchy
Order
Conformity
Deference to authority
Emphasis on harmony
Reverence for education

Japanese people like to be known by the name of their employers than by their
vocational designation or title.

They respect status: therefore they hunt big names not smaller ones.
They Hunt companies not jobs.
International Management Ninth Edition Luthans | Doh

Snapshot of japanese culture

Self-Awareness, the Group, and Conformity

One of the most homogenous nations in the world

Strongly aware and proud of their country

High on fashion and technology

Islander mentality

Relationships take foremost priority, reflects in business too

Hard work is a given, not a exception

International Management Ninth Edition Luthans | Doh

Japanese Microenvironment

Prevalent Japanese Sociocultural Patterns and Tendencies

International Management Ninth Edition Luthans | Doh

Japanese Microenvironment

Prevalent Japanese Sociocultural Patterns and Tendencies

International Management Ninth Edition Luthans | Doh

Japanese Microenvironment

Prevalent Japanese Sociocultural Patterns and Tendencies

International Management Ninth Edition Luthans | Doh

Japanese Microenvironment

Prevalent Japanese Sociocultural Patterns and Tendencies

International Management Ninth Edition Luthans | Doh

Japanese Microenvironment
Japanese Government and Politics:
International Management Ninth Edition Luthans | Doh

Japanese Microenvironment
Japanese Government and Politics:
International Management Ninth Edition Luthans | Doh

Japanese Microenvironment

Japanese Economy:
Japanese economic and industrial modernization gained momentum in the late
1800s.
After a long period of self imposed isolation from the outside world
Rapid Economic growth after WWII of 7% per year on average.
In few decades it became worlds first most advanced industrial economy
Japanese economy extensively rely on free enterprise economy system i-e free
market guided economy
Government support significantly to specific industries which it think of vital for
future development
Alliance Capitalism is cultural norm of Japanese economy
Job Security for full time male employees
International Management Ninth Edition Luthans | Doh

Japanese Microenvironment
Japanese Economy:
International Management Ninth Edition Luthans | Doh

Japanese Microenvironment
Japanese Economy:
International Management Ninth Edition Luthans | Doh

Japanese Microenvironment
Japanese Economy:
International Management Ninth Edition Luthans | Doh

Japanese Microenvironment
Japanese Economy:
International Management Ninth Edition Luthans | Doh

Japanese Microenvironment
Alliance Capitalism: (Keiretsu)
A family of independent companies free to conduct their business as they best,
yet bonded together by their collective ability to assist one another.
One long-standing feature of Japanese economy has been its relational
business Alliances or networks known as Keiretsu.
These commonly include dozens (sometimes hundreds) of affiliated firms.
Integrated by web of relationships ranging from tight to loose.
Interrelationships include:
Preferential purchasing or sourcing
Cross-ownership
Information
Directorship
Personnel
Contacts
Contracts and
Capital
International Management Ninth Edition Luthans | Doh

Japanese Microenvironment
Types of Keiretsu:
1. Horizontal Keiretsu (also Zaibatsu-type)
The former descendent of large diversified Pre-WW II Zaibatsu
groups date back in19th century. Banned by American occupation
authorities after world war II, but remnant firms regrouped into present
day Keiretsu.
2. Vertically Keiretsu:
A large manufacturing or services oriented company, with members bound
by hierarchical buyer and seller relationship.
International Management Ninth Edition Luthans | Doh

Japanese Keiretsu
International Management Ninth Edition Luthans | Doh

Japanese Microenvironment
Some very well know Big Names are:
Toyota Motor
Nissan Motor
Honda Motor
Hitachi
Nippon Steel & Sumitomo Metal
Panasonic
Sony
Suzuki
International Management Ninth Edition Luthans | Doh

Japanese Management??
Japanese companies, like Japanese society, are
hierarchically organized with individuals knowing
their position within a group and with regard to each
other
International Management Ninth Edition Luthans | Doh

Management and working styles 1

JAPAN WEST
generalists specialists
promotion by seniority promotion by performance
conflict is solved privately conflict is solved in public
people-oriented task-oriented
long-term planning short-term planning
informal communication formal communication
decision by consensus decision by majority
interdependency interdependency is viewed sceptically

Summary
International Management Ninth Edition Luthans | Doh

Management and working styles 2

JAPAN WEST
reciprocal commitment between less bonds
managers and workers

open-plan offices working space is structured according

to individual needs

formalized and ritualized interactions informal interactions more common

intuitive, nonverbal communication is analytical, logical argumentation style

important

face-to-face communication more written communication more important

important

Summary
International Management Ninth Edition Luthans | Doh

Japanese Management Common Features

Life time employment
Collective decision making
1] Ringi-sei - The circulation of consultative memorandums around a
company in order to achieve consensus.
2]Information flow from the bottom of the company to the top.
3]Most policies originate at the mid-level management
4]Top Management plays only a supervisory and encouraging role.

Collective responsibility
Slow evaluation and promotion
Implicit control mechanisms
Non specialized career path
High self disciplined
Holistic concern for employee as a person
International Management Ninth Edition Luthans | Doh

MODEL OF JAPANESE MANAGEMENT

Hatvany and Pucik (1981) offer a model of Japanese management:
Job rotation and slow promotion;
Evaluation of attributes and behavior;
Emphasis on work groups;
Open communication;
Consultative decision making; and concern for employee.
International Management Ninth Edition Luthans | Doh

Philosophy of Japanese Management

Fully satisfaction of customers needs
Achieve employee's fulfillment
Slow and careful way of implementing
Willingness to any activity if necessary
Zero-defect theory
Rom was not built in a day approach
International Management Ninth Edition Luthans | Doh

Japanese Management
Practices
1) PLANNING
Long term orientation
Collective decision making with consensus
Involvement of many people in preparing and making the
decision
Decisions flow bottom to top
Slow decision making and fast implementation of the decision
International Management Ninth Edition Luthans | Doh

Contrasting Planning Function

between Japan and US
Japanese United States
1.Long term orientation 1.Primarily short term Orientation
2.Collective decision making with 2.Individual decision making
consensus
3.Involvement of many people in 3. Involvement of a few people in making
preparing and the making the decision decision and
selling it to persons with divergent values
4. Flow of critical decisions from top to 4. Decisions initiated at the top, flowing
bottom and down. back to top; flow of no critical
decisions often from bottom to top.
5.Slow decision making; fast 5.Fast decisions making; slow
implementation of the implementation decision requiring
compromise, often resulting in suboptimal
decisions Japanese
International Management Ninth Edition Luthans | Doh

Japanese Management
Practices
2) Organizing
Collective responsibility and accountability
Ambiguity of decision responsibility
Informal organization structure
Well-known common organization culture and philosophy;
competitive sprite toward other enterprises
International Management
Contrasting Organizing Function
between Japan and US
Japanese
1.Collective responsibility
.Ambigious decision responsibility
2 3.Informal organization structure
4. Well-known common organization
culture and
Ninth Edition Luthans | Doh
United States
1.Individual responsibility and
accountability
2.Clear and specific decision
responsibility
3. Formal, bureaucratic organization
structure
4.Lack of common organization culture;
philosophy; competitive spirit toward
other identification with profession
rather than with enterprise company
International Management Ninth Edition Luthans | Doh

Japanese Management
Practices
3) Staffing
Young people hired out of school; hardly any mobility of people
among companies
Slow promotion through the ranks
Loyalty to the company
Very infrequent performance evaluation for new employees
Promotion base on multiple criteria
International Management Ninth Edition Luthans | Doh

Japanese Management
Practices
3) Leading
Acting as A social facilitator and group member.
Paternalistic style
Common values facilitating cooperation
Bottom-up communication
International Management Ninth Edition Luthans | Doh

Contrasting Leading Function

between Japan and US
Japanese United States
1.Young people hired out of school; hardly any 1.People hired out of schools and from other
mobility of people among companies companies;
frequent company changes
2.Show promotion through the ranks 2.Rapid advancement highly desired and
demanded
3.Loyalty to the company 3. Loyalty to the profession
4. Performance appraisal once or twice a year 4.Comprehensive performance evaluation, usually
common once a year
5.Appraisal of long-term performance 5.Appraisal of short term results
6.Promotion based on long-term performance and 6. Promotion based primarily on individual other
criteria performance and often on relatively short-
term performance.
7.Training and development considered a long- 7.Triaing and development undertaken with
term investment hesitation( employee may switch to
another firm)
8.Lifetime employment common in companies 8.Job insecurity prevailing
International Management Ninth Edition Luthans | Doh

Japanese Management
Practices
4) Controlling
Control by peers
Control focus on group performance
Saving face
Extensive use of quality control circles.
International Management Ninth Edition Luthans | Doh

Contrasting Controlling Function

between Japan and US
Japanese United States
1.Leader acting as social facilitator and 1.Leader acting at the decision maker and
group head of member the group
2.Paternalistic style 2.Directive style) strong, firm, determined)
3.Common values facilitating cooperation 3. Often divergent values; individualism
sometimes hindering cooperation
4.Avoidance of confrontation, sometimes 4.Face-to-face confrontation common;
leading to emphasis on ambiguities; emphasis on
harmony clarity
5.Critical communication top-down and 5.Communication primarily top-down up;
bottom noncritical communication often bottom -
up
International Management Ninth Edition Luthans | Doh

Human Resource Practices In Japan For

Managers
High wages based on seniority (including substantial bonuses)
Structured managerial career paths
Employment security (for regular employees)
Company-sponsored welfare systems (I.e. subsidized housing,
recreational facilities, etc.)
Wide involvement of middle management in decision making
International Management Ninth Edition Luthans | Doh

Manager Career Path

International Management Ninth Edition Luthans | Doh

Manager Career Path

International Management Ninth Edition Luthans | Doh

Manager Career Path

International Management Ninth Edition Luthans | Doh

Four pillars of Japanese HRM

Long Term Employment
Seniority based promotion and compensation
Company-driven employee training programs
Trade/labor unionism
International Management Ninth Edition Luthans | Doh

Long-term Employment (Shu-shin-kuyo)

Long-term employment and job security (Shushinkuyo)

New employees are recruited directly from school rather than
in an open job market.
An exchange of commitment between the employer and the
employee.
The employer must be prepared to make sacrifices for the
employee to ensure lifelong loyalty and commitment.
International Management Ninth Edition Luthans | Doh

Japanese Management Style

Theory Z: Popularized by Dr. William Ouchi.

Theory Z focused on increasing employee loyalty to the company

by providing a job for life with a strong focus on the well-being of
the employee, both on and off the job.

According to Dr. Ouchi: Theory Z management tends to promote:

Stable Employment
High Productivity
High employee morale and satisfaction
International Management Ninth Edition Luthans | Doh

Japanese Management Style

Theory Z as an Approach to Management
Humanistic approach to management
Hybrid management approach combining Japanese
management philosophies with U.S. culture.
Places a large amount of freedom and trust with workers
Assumes that workers have strong loyalty in both teamwork and
the organization
International Management Ninth Edition Luthans | Doh

Japanese Management Style

Characteristics of Theory Z
Long-term employment and job security
Collective responsibility
Implicit, informal control with explicit, formalized measures
Collective decision-making
Slow evaluation and promotion
Moderately specialized careers
Concern for a total person, including their family (Holistic
Concern)
International Management Ninth Edition Luthans | Doh

Lean Management
Lean management is the development of the problem solving
capabilities of the entire workforce allocating specific
categories of problems to each layer of the organization.

Leader is less focused on problem solving, high focus on

building problem solving muscle of the workforce
International Management Ninth Edition Luthans | Doh

Ten Principles of Lean Management

1. Eliminate waste
2. Minimize inventory
3. Maximize flow
4. Pull production from customer demand
5. Meet customer requirements
6. Do it right the first time
7. Empower workers
8. Design for rapid changeover
9. Partner with suppliers
10.Create a culture of continuous improvement (Kaizen)
International Management Ninth Edition Luthans | Doh

Kaizen Approach
[Continuous Improvement]
Policy of constantly introducing small incremental changes in
a business in order improve quality
It assumes that employees are the best people to identify
room for improvement as they practically deals with
operations
Small improvements needs less capital investments
International Management Ninth Edition Luthans | Doh

Innovation Kaizen
Creativity Adaptability
Individualism Teamwork (systems approach)
Specialist-oriented Generalist-oriented
Attention to great leaps Attention to details
Technology-oriented people-oriented
Information: closed, proprietary Information: open, shared

Functional (specialist) Cross-functional orientation

orientation Build on existing technology
Seek new technology Cross-functional organization
Line + staff Comprehensive feedback

Limited feedback