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Glacial change slow to heat up Japan’s economy

by Florian Coulmas

TRANSFORMING JAPANESE WORKPLACES, by Takashi Sakikawa. Palgrave Macmillan, 2012, 248 pp., $100 (hardcover)

The Japanese manager was once portrayed as a fearless samurai ready to take on the world. This was when Western companies and management scholars woke up to the presence of a potent competitor outside the Western world. High-growth Japan was going to overtake everybody else, and the Japanese manger was the harbinger of this unexpected challenge.

This looks like a story set in the remote past. As a matter of fact, it is one that many still remember from firsthand experience; however, the half-life of explanations of success in business tends to be short.

Japanese business has been dragged down by various adversities such as fierce international competition, a surge in the yen, and an aging and declining workforce. As a result, Japan is no longer feared, its management model no longer considered worth emulating.

“Transforming Japanese Workplaces” is a study on how Japanese enterprise culture responds to the challenges Japanese companies have been facing since the burst of the bubble economy in the early 1990s, especially in the first decade of this century. Its author, Takashi Sakikawa, is a professor of organizational behavior at Niigata University. He argues, and demonstrates to some extent, that Japanese companies are, indeed, changing their ways, albeit slowly.

His investigation concentrates on manufacturing, particularly the electronics industry, which, in the course of the past two decades, has lost much of its competitive edge. Sakikawa’s point of departure is the Japanese management that was credited, rightly or wrongly, for Japan’s economic success during the high-growth decades. Its three traditional pillars were lifetime employment, seniority-based pay and enterprise unionism. He concedes that not all Japanese companies were always organized along these lines, but looking for signs of change by focusing on these three elements is a valid approach.

In addition Sakikawa characterizes Japanese company culture as collectivist, egalitarian and masculine (i.e., male-dominated). The results of several case studies he carried out suggest that Japanese companies are transforming themselves. For instance, in some companies seniority pay is being replaced by merit-based pay. However, it is not always clear whether or to what extent such changes are driven by economic necessity or future-oriented organizational innovation.

A major theme of transformation addressed in this book is homogeneity and diversity. A highly integrated uniform culture was once identified, and by some praised, as the secret of Japan’s success. Now, as it doesn’t seem to do the trick anymore, greater diversity is hailed as the right formula to regain lost competitiveness.

Sakikawa speaks of greater diversity of Japanese management culture today, but mind you that the diversity he diagnoses is of rather modest nature. We are not talking about a massive influx of labor migrants form faraway countries who do not speak Japanese or want to pray five times a day, but about the inclusion of female managers, job hoppers and younger employees in key positions. According to the author, this makes for “the heterogenization of Japanese companies’ culture … bringing new perspectives and knowledge to the organizations.”

If this is the extent of change in Japanese workplaces, there is no reason to fear that Japanese corporate culture is being transformed out of recognition. Sakikawa is concerned that interest in Japanese companies and management style is limited today.

He may be right, for Japan Inc. is no longer perceived as a threat to Western dominance. Yet, his book has its merits in offering some insights into adjustments of management in the absence of growth.

Florian Coulmas is director of the German Institute for Japanese Studies Tokyo (DIJ). His recent book, written together with Ralph Luetzeler, is titled “Imploding Populations in Japan and Germany.”

  • Mints

    Perhaps because the emphasis on “diversity” is so recent, Japanese companies have a very superficial understanding of it. Diversity mainly serves as a PR gimmick for the big firms.

    Here is one example of what these firms really think of diversity. To comply with a government guideline calling for companies to employ people with disabilities at a rate of 1.8% of the total workforce, large corporations set up a special subsidiary to hire them, and have them do work that is unrelated or indirectly related to operations. The point is to segregate these disabled employees from the rest of the “uniform” workforce.

    Meanwhile, hiring of female managers is moving at such a snail’s pace that many major companies will probably never end up appointing a woman to their board of directors.

    Japanese management style has practically nothing to offer these days. More than adjustments, it needs to be overhauled.