Japanese-style management was once widely acclaimed as ideal. Since the collapse of the bubble economy, though, it has been discarded as a model for its incompatibility with reform. Now the system is being revaluated, and active debate is going on in the business community on how to adapt it to changing times.
Carlos Ghosn, president and chief executive officer of Nissan Motor Co., writes in the August issue of the monthly magazine Bungei Shunju that Japanese-style management derives its strength from three basics: seniority-based wages, lifelong employment and concentration of power in middle management.
Ghosn says companies under Japanese-style management have had mixed results. Some are thriving, but others are in serious trouble -- as was the old Nissan. A study of the differences enables us to see how these three features of Japanese-style management work.