Presentation is loading. Please wait.

Presentation is loading. Please wait.

1 Guru to the Western world Japan Week 3. 2 Overview – Japanese business environment Business conglomerates Business conglomerates Zaibatsu Zaibatsu Single.

Similar presentations


Presentation on theme: "1 Guru to the Western world Japan Week 3. 2 Overview – Japanese business environment Business conglomerates Business conglomerates Zaibatsu Zaibatsu Single."— Presentation transcript:

1 1 Guru to the Western world Japan Week 3

2 2 Overview – Japanese business environment Business conglomerates Business conglomerates Zaibatsu Zaibatsu Single family controlled Single family controlled Central holding company Central holding company Pyramid structure Pyramid structure In 1930s 4 Zaibatsus controlled 25% of Japanese business In 1930s 4 Zaibatsus controlled 25% of Japanese business Zaibatsus dissolved in 1947 Zaibatsus dissolved in 1947

3 3 Keiretsu – key to business "Big Six" enterprise complexes (Mitsui, Mitsubishi, Sumitomo, Fuyo, Sanwa and Dai– ichi Kangyo) "Big Six" enterprise complexes (Mitsui, Mitsubishi, Sumitomo, Fuyo, Sanwa and Dai– ichi Kangyo) Horizontal Type – diversify in many fields Horizontal Type – diversify in many fields Typical structure - Typical structure - –stable vertical cross–shareholding relationships –horizontal affiliations reaching diverse markets –possession of large–scale economic resources –often close managerial ties –executives sit on boards for several companies –regular presidents meetings

4 4 Keiretsu – key to business Common trait to all Big Six within complex is Common trait to all Big Six within complex is –central city bank –general trading company –insurance company In 1992 Big Six members represented only 0.007% of registered companies but controlled In 1992 Big Six members represented only 0.007% of registered companies but controlled –19.29% of capital –16.56% of assets –18.37% of sales

5 5 Vertical Keiretsu Vertical type – large manufacturing company groups held together by capital ties Vertical type – large manufacturing company groups held together by capital ties Typically umbrella format Typically umbrella format Examples: Examples: Matsushita Matsushita Hitachi Hitachi Toshiba Toshiba Tokyo Electric Power Tokyo Electric Power Toyota Toyota

6 6 Vertical Keiretsu Commonly held together by Commonly held together by –capital ties –long–term contracts –financial and technological support Frequently spin off divisions to become separate companies linked to parent Frequently spin off divisions to become separate companies linked to parent 1995 estimated suggested largest 30 groups were comprised of approximately 12,577 subsidiaries and affiliated entities 1995 estimated suggested largest 30 groups were comprised of approximately 12,577 subsidiaries and affiliated entities

7 7 Business related Keiretsu Business related - companies tied to groups by business relationships Business related - companies tied to groups by business relationships E.g. assembler – supplier relationships E.g. assembler – supplier relationships

8 8 Highly protectionist activities Congressional Research Service report (1994) raises several international trade issues Congressional Research Service report (1994) raises several international trade issues Keiretsu tend to buy from within their groups and may discriminate against other exporters to Japan Keiretsu tend to buy from within their groups and may discriminate against other exporters to Japan Allegedly Big Six made 68% of their purchases from companies in which they had at least a 10% equity interest and bought only 5% from foreign unrelated companies Allegedly Big Six made 68% of their purchases from companies in which they had at least a 10% equity interest and bought only 5% from foreign unrelated companies Official figures are 15% inter-company purchases Official figures are 15% inter-company purchases

9 9 Highly protectionist activities Japanese transplant automakers, in particular, have relied heavily on their traditional Japanese suppliers who have followed them to their U.S. plants Japanese transplant automakers, in particular, have relied heavily on their traditional Japanese suppliers who have followed them to their U.S. plants Keiretsu ties may provide an advantage to Japanese companies in developing new technology or in long-term planning Keiretsu ties may provide an advantage to Japanese companies in developing new technology or in long-term planning Keiretsu distribution systems may discriminate against foreign producers in reaching the retail Japanese consumer Keiretsu distribution systems may discriminate against foreign producers in reaching the retail Japanese consumer Keiretsu stockholding patterns make the buying and selling of Japanese companies, let alone hostile takeovers, nearly impossible Keiretsu stockholding patterns make the buying and selling of Japanese companies, let alone hostile takeovers, nearly impossible

10 10 Keiretsu – trading links All Keiretsus have the support of a Trading Company (Sogo Shosha) All Keiretsus have the support of a Trading Company (Sogo Shosha) These provide range of goods and services These provide range of goods and services It is essentially the marketing operation of the Keiretsu It is essentially the marketing operation of the Keiretsu But provides But provides Links to financiers Links to financiers Customer and product intelligence Customer and product intelligence

11 11 Management features - 1 Lifetime employment Lifetime employment Rigorous selection Rigorous selection Recession has caused changes Recession has caused changes Temporary work Temporary work Short-term contracts Short-term contracts Job Rotation Job Rotation Increases motivation Increases motivation Makes workers more efficient Makes workers more efficient Gives full insight Gives full insight

12 12 Management features - 2 Seniority based promotion Seniority based promotion Strict hierarchical relationships Strict hierarchical relationships Decision making process (Ringi) Decision making process (Ringi) Nemawashi – sounding out at all levels Nemawashi – sounding out at all levels Ringi Seido – deliberations at same level Ringi Seido – deliberations at same level Just in Time (JIT) Just in Time (JIT) Maximum efficiency Maximum efficiency Cost reduction Cost reduction Efficiency Efficiency Supplier relationships Supplier relationships

13 13 Management features - 3 Total Quality Control Total Quality Control Quality is built into every process Quality is built into every process Inherent not external Inherent not external Quality Circles Quality Circles Groups of employees meet to identify and solve work-related problems Groups of employees meet to identify and solve work-related problems Provides – Provides – Commitment Commitment Sense of ownership Sense of ownership Improved communications Improved communications Motivation Motivation

14 14 Management features - 4 Kaizen – the key to competitive success Kaizen – the key to competitive success Constant improvement Constant improvement Customer oriented Customer oriented Suggestion system Suggestion system US import US import Pervades all areas of work environment Pervades all areas of work environment Not just cost Not just cost

15 15 Are there downsides to Japanese management? Is productivity improvement the result of cost cutting? Is productivity improvement the result of cost cutting? Decision making processes impede creativity Decision making processes impede creativity Once performance improvement techniques are made public all companies adopt them Once performance improvement techniques are made public all companies adopt them Japanese business culture is not transferable to western organisations Japanese business culture is not transferable to western organisations Attempts to impose some of the cultural expectations on workers in UK plants owned by Japanese companies can cause friction Attempts to impose some of the cultural expectations on workers in UK plants owned by Japanese companies can cause friction

16 16 The dark side of Japanese management in the 1990s Christopher B Meek – 2004 Jrnl of Managerial Psychology Christopher B Meek – 2004 Jrnl of Managerial Psychology High commitment – low satisfaction High commitment – low satisfaction Increase in Increase in Karoshi Karoshi Ijime Ijime

17 17 Incidents of Karoshi in Meek (2004)

18 18 Japanese worker job satisfaction Whitehill & Takezawa (1968) Whitehill & Takezawa (1968) asked about how central or important their commitment to their employer and their work was in comparison to other possible life priorities asked about how central or important their commitment to their employer and their work was in comparison to other possible life priorities Statement, I think of my company as the central concern in my life and of greater importance than my personal life, Statement, I think of my company as the central concern in my life and of greater importance than my personal life, 9 percent of Japanese respondents agreed 9 percent of Japanese respondents agreed 1 percent of American respondents agreed 1 percent of American respondents agreed

19 19 Japanese worker job satisfaction Statement, I think of the company as a part of my life at least equal in importance to my personal life, 57 percent of Japanese respondents agreed Statement, I think of the company as a part of my life at least equal in importance to my personal life, 57 percent of Japanese respondents agreed 22 percent of American respondents agreed 22 percent of American respondents agreed only 8 percent of the Japanese agreed that they thought of their company as strictly a place to work and only 8 percent of the Japanese agreed that they thought of their company as strictly a place to work and separate from their personal life compared to 23 percent of the Americans separate from their personal life compared to 23 percent of the Americans

20 20 Potential reasons Ganbatte – willingness to work hard & unceasingly under extreme conditions Ganbatte – willingness to work hard & unceasingly under extreme conditions Family oriented dependence – one looks to the family first for comfort Family oriented dependence – one looks to the family first for comfort Socializing effect that the outside world is to be feared Socializing effect that the outside world is to be feared The importance of not appearing foolish in front of others The importance of not appearing foolish in front of others Company in the role of family – lifetime employment Company in the role of family – lifetime employment

21 21 Fatally Flawed Management? Did Japanese management work because economically Japan was working? Did Japanese management work because economically Japan was working? Incidents of karoshi and ijime increased at time of Japanese economic downturn Incidents of karoshi and ijime increased at time of Japanese economic downturn Greater pressure on management to get more from workers Greater pressure on management to get more from workers Workers socialisation led them to accept… Workers socialisation led them to accept… To a point To a point Is western thought affecting worker conscience? Is western thought affecting worker conscience? Are attitudes changing? Are attitudes changing?

22 22 Karoshi in context? 37 year old engineer died of a stroke at work in 1987 – quoted in Meek 37 year old engineer died of a stroke at work in 1987 – quoted in Meek My husband worked for an automobile company where his job was designing engines. For more than three years... he would leave home before 7 oclock... and not return home until about 2:00 a.m. He worked on holidays as well...We got no workers compensation from the company whatsoever because, although he died at work, he died of stroke and the workers compensation applies only to cases of loss of limb while working with machines. Lately, when I think that if he hadnt had to work so hard he would still be alive today and my children would still have their father, I cant help but blame the company. My husband worked for an automobile company where his job was designing engines. For more than three years... he would leave home before 7 oclock... and not return home until about 2:00 a.m. He worked on holidays as well...We got no workers compensation from the company whatsoever because, although he died at work, he died of stroke and the workers compensation applies only to cases of loss of limb while working with machines. Lately, when I think that if he hadnt had to work so hard he would still be alive today and my children would still have their father, I cant help but blame the company. Seeing our children grow up without a father is too much for me to bear. Our eldest son said; Seeing our children grow up without a father is too much for me to bear. Our eldest son said; Dad was stupid! He worked too hard all the time Dad was stupid! He worked too hard all the time

23 23 The great management myth? Is Japanese management just a set of production techniques? Is Japanese management just a set of production techniques? Is management in Japan simply an application of societal norms transferred to the substitute family (ie the workplace)? Is management in Japan simply an application of societal norms transferred to the substitute family (ie the workplace)?

24 24 Interview with head of Kenwood Economist March 2004 Mr Kawahara is quick to stress that there are some tasks at which Japanese firms excel. Mr Kawahara is quick to stress that there are some tasks at which Japanese firms excel. Above all is a manufacturing philosophy that emphasises highly-trained workers, continuous efforts to eliminate defects, and lean production that minimises waste. Above all is a manufacturing philosophy that emphasises highly-trained workers, continuous efforts to eliminate defects, and lean production that minimises waste. In Japan's high-growth years, this was a world beater, so the country's management shortcomings did not matter much. In Japan's high-growth years, this was a world beater, so the country's management shortcomings did not matter much. Alas, he says, because of this success, business leaders "never needed to learn how to manage". Alas, he says, because of this success, business leaders "never needed to learn how to manage".

25 25 The China Syndrome? If there was a Japanese management style that could work outside Japan If there was a Japanese management style that could work outside Japan Where would it be? Where would it be? China? China? Increasing academic interest in Japanese manufacturing plants in China Increasing academic interest in Japanese manufacturing plants in China

26 26 Early thoughts In Japans Reluctant Multinationals Trevor (1983) divided up Japanisation process into In Japans Reluctant Multinationals Trevor (1983) divided up Japanisation process into hard and soft systems hard and soft systems Fukadas (1995) study of transferability suggests some transfer of techniques taking place. Fukadas (1995) study of transferability suggests some transfer of techniques taking place. This looked at Japanese plants in China This looked at Japanese plants in China

27 27 Taylors work - 1 Taylor (1999) studied production practices in Japanese manufacturing plants in China Taylor (1999) studied production practices in Japanese manufacturing plants in China Plants represent Japanese manufacturing practices to reasonable high degree Plants represent Japanese manufacturing practices to reasonable high degree No common management practice No common management practice No overall pattern in 20 cases No overall pattern in 20 cases We cannot meaningfully speak of Japanisation We cannot meaningfully speak of Japanisation Production methods are adapted – profitably - to local and parent company circumstances Production methods are adapted – profitably - to local and parent company circumstances

28 28 Taylors work - 2 Looking at personnel practice in Japanese firms in China - Taylor (2001) Looking at personnel practice in Japanese firms in China - Taylor (2001) The main findings were The main findings were despite claims of cultural similarity (!!) between China and Japan, personnel management practices were generally not transferred from Japan to the plants in China despite claims of cultural similarity (!!) between China and Japan, personnel management practices were generally not transferred from Japan to the plants in China practices that may appear as Japanese inspired were often informed by local practices practices that may appear as Japanese inspired were often informed by local practices there was diversity in the forms of practices used, indicating neither sophistication nor a singular recipe of management methods there was diversity in the forms of practices used, indicating neither sophistication nor a singular recipe of management methods Hofstede scores Hofstede scores Individuality Ch 15 – Ja 46 Individuality Ch 15 – Ja 46 Power Distance Ch 80 – Ja 54 Power Distance Ch 80 – Ja 54


Download ppt "1 Guru to the Western world Japan Week 3. 2 Overview – Japanese business environment Business conglomerates Business conglomerates Zaibatsu Zaibatsu Single."

Similar presentations


Ads by Google