The business organization of Japan is very different from that existing in Western countries, such as the United States and Europe, as it is characterized by having reached higher levels of efficiency in business management and generating a set of stable practices, which, despite if many of them are not theorized, they allow us to maintain that a Business Economics School has been structured, typical of the Japanese experience.
This School or modality of organization of business competition and its state regulation is characterized by the different way in which the following features are established in relation to the efficiency of Western capitalism:
1. The degree of separation between property and management.
2. The employer and the labor collective; their forms of stimulation.
3. The basic forms of efficient management: cost and quality.
4. The creation of the technological base of the business system.
5. The double business structure and the horizontal and vertical organization of monopoly agreements.
6. The globalization of the world economy and the "immigrant" company.
1. The degree of separation between property and management
The level of analysis in the development of capitalist property and its realization in the direction of production is demonstrated by Marx in the division of property capital and function capital personified in the owners of capital and those who put them in function: the entrepreneurs capitalists who are those who perform the function of exploitation and, therefore, capitalist property. "Today, the capitalist's orders in the factory are as indispensable as the general's orders on the battlefield."
“All directly social or collective work on a large scale requires, to a greater or lesser extent, a direction that establishes a harmonious link between the various individual activities and executes the general functions that arise from the movements of the total productive organism, unlike those that performed by individual organs. A violinist only conducts himself, but an orchestra needs a conductor. This function of direction, surveillance and liaison becomes a function of capital as soon as the work submitted to it takes on a cooperative character. As a specific function of capital, the managerial function also assumes a specific importance ”.
“The capitalist therefore does not need to waste his time, personally taking care of this work. A conductor does not need, much less be the owner of the instruments, nor does one of his leading functions include paying the “salaries” to the other musicians “.
"In the process of reproduction, the working capitalist represents capital as the property of others vis-à-vis the salaried workers and the capitalist who owns money takes part in the exploitation of labor, represented by the working capitalist."
“The antithesis between the function of capital in the process of reproduction versus the simple ownership of capital outside of the process of reproduction makes one forget that the active capitalist can only act as a representative of the means of production vis-à-vis the workers by doing these work for themselves or what is the same, making the means of production function as capital ”.
Marx's demonstration that capitalism itself generates the separation between property and management, which is manifested in the figure of the entrepreneur, offers from this point of view the methodological basis to understand the need for not only all collective process of Production requires a management, but through the management executed by management, the property is realized in its essence and purpose that it determines.
In Japan the presidents and directors of large companies in general are not its main shareholders, but are the so-called "employee directors". The main axis of the Japanese business organization lies in the high degree of separation that exists between the function and the property, that is, individual capital does not work, but that of legal entities (firms that put their capital). The administrator does not put it the owner, as it happens in the western countries, he is going to be chosen by the collective (company) and is based on the characteristics that he has; therefore, competition will be greater among workers, since the employer will be chosen not for their number of shares, but for their capacity.
This structure of company management offers an illusion to the aspirations of the employees and sharpens the race to occupy the first positions in the echelons. Another curious factor is that 75% of the shares belong to legal entities, while 25% belong to individual shareholders, contrary to what happens in the United States and Europe. All this mechanism the State has known how to stimulate and has managed it in a very intelligent way in a way that satisfies its interests.
2. The employer and the labor group: their ways of stimulation
Although it is often believed that harmony is given great importance in Japanese society in general, and in business in particular, there is indeed strong competition among employees aspiring to the top of the ladder. and to receive the highest possible value in the bonus system distributed twice a year: June and December.
This spirit of competition of the workers is used in a very subtle way by the companies that use the old policy of “divide or rule”, that is, the Japanese have established a mechanism aimed at committing the worker to the company, in addition to a system evaluation and a salary payment that oblige you to work efficiently.
This competition between employees is further heightened when companies propose to compete with rival entities to expand their market share. This same work dynamic has affected not a few Japanese households, since the absence of the father for long hours of work contributes to diminish their prestige with their children and to the deformation of the marriage. It is common to see the whole family having breakfast in a Japanese television ad and the children saying goodbye to their father with this phrase: "Daddy, see you tomorrow."
Parents return home very late, taking more than an hour due to traffic, and this means that during working days they cannot have the opportunity to talk with their children; only on Sunday they have contact with their family. On the other hand, it should be noted that the word Sodai Gomi, large and useless garbage, has spread with great force in Japan, which is used to define those parents who do not take care of their family because they are exhausted from work. on Sunday lying down or just watching television. There is another phenomenon called karochi which means sudden death from exhaustion due to overwork.
As mentioned earlier, the union's administration constitutes the core of Japanese management. The Personnel Department has a lot of power, as it employs and fires; determines the specific placement of each worker within the company; promote promotions; and establishes the magnitude of salaries and bonuses. The latter is given great importance, since it constitutes an incentive for work.
The evaluation system takes into account the attitudes assumed by the workers, as members of the organization, their initiative at work, discipline, harmonious nature, etc. In this way, a labor discipline is established in which subordinate employees blindly obey the higher level in order to achieve the best evaluation in order to obtain higher wages and the best job title. In this way, companies organize and force their employees to work.
Another way to stimulate the worker is to allow him to be part of the improvement proposals in the company, stimulating and channeling his contribution for social and personal recognition. This has its monetary reward, but the prizes do not usually exceed the figure of 5 or 6 dollars. More important than money is the personal recognition they provide.
To conclude, it should be noted that there is another method of stimulation based on the large differences in wages between the different companies, according to their size. This great difference between companies motivates workers to have a psychology dependent on companies. For their part, companies use this loyalty of their employees, together with the personnel evaluation system, to lead them to work more intensely, even to get them to voluntarily renounce their right to salary payment for extra work performed. In reality, everything indicates that the supreme objective of companies is to seek the highest possible profits.
3. The basic forms of efficient management: cost and quality
Quality is a set of qualities or properties of a product that conditions its usefulness to satisfy certain productive and personal needs.
In its broadest sense, quality is something that can be improved. When talking about quality, one tends to think first in terms of product quality, that is, the technological question, but there is the social question to which the Japanese give great importance, since quality also means helping individuals to be aware of continuous improvement in personal, family, social and work life; in other words, continuous improvement that involves everyone: managers and workers alike.
You cannot talk about quality without taking into account the comprehensive control of costs, prices and profits. By improving quality, productivity increases because fewer processes are carried out and there is less waste, costs decrease, because there are fewer mistakes and delays, time and materials are better used. As a result, a chain reaction occurs: increased productivity allows, on the one hand, to penetrate markets, improve quality and, on the other, lower prices and consequently remain in business; that is, you enter the competition, which creates the basis for further development.
According to Dr. Ishikawa, a leading Japanese engineer, quality control is about developing, designing, manufacturing and maintaining a quality product that is more useful and always satisfying to the consumer. It therefore requires a broader interpretation of the company's process information by all workers, engineers, managers and executives.
Quality begins with the cost reduction process and if an interrelated analysis is not done, then it is not worth it, the analysis does not work; it is based on technology, but only with technology is quality not guaranteed. To do quality control, you have to use the aforementioned control as a basis, know the costs, prices, profits and the integral control of all this, together with the control of production volume, sales and stocks, as well as the dates of delivery, the amount of waste, the number of defects or corrections necessary to keep statistics with the incidents and reduce them.
Insufficient supply of a demanded product will be as detrimental to customers, as excessive supply, since it implies poor control and waste of labor, raw materials, energy, etc. There is poor control of production volume if fluctuations in percent defective continue or if an entire lot is rejected. That is why it is said that cost control and quality control are two sides of the same coin and in order to control one well it is necessary to control the other well.
One of the fundamental issues on which Japanese quality control is based is that there are no perfect standards, be they national, international or company-wide, as these generally contain inherent flaws as customer requirements continually change and year after year a higher quality is demanded. Standards are adequate at the time of setting, but they quickly become outdated; in practice, it is necessary to constantly review and improve them in order to satisfactorily meet consumer requirements.
Japanese quality control is a revolution and a new concept in management thinking. The characteristics of Japanese quality control that distinguish it from Western quality control are the following:
1. Quality control throughout the company with the participation of all members of the organization.
2. Education and training in quality control.
3. Activities of the quality control circles.
4. Quality control audit.
5. Use of statistical methods.
6. Activities to promote quality control at the national level.
This conception raises the need to provide quality control education to all employees: from the president, to the line workers, it is necessary to vary the reasoning of all and repeat the education and training inside and outside the company of indefinitely, that's how the Japanese carried out quality control. To achieve these objectives, the main interest of the company must be people's happiness and, as a first measure, receive an adequate income.
On the other hand, consumers must feel satisfied and happy when they buy and use the goods and services of the company, the workers in no case can think that the quality control mechanisms are to control their work. In Japan there are private entities to promote quality control activities: quality control research group, the quality month committee, the headquarters of quality control circles.
The Japanese do not control quality to only project exports, but for them quality transcends the company, it is a social relationship of production, a process, it is a reserve for the reduction of the cost of production, as a more dynamic way to maintain its competitiveness.
Quality control constitutes a conceptual revolution in management, since managing based on respect for the customer can increase the degree of satisfaction of consumer needs, both in means of production and in means of consumption.
The Japanese introduce scientific-technical advances to production quickly, causing an unmatched compatible replacement. The Japanese industry is based on offering quality items at low prices due to hard work and massive, efficient and highly competitive production.
In 1962, quality control circles began to be established. They are made up of small groups that carry out quality control activities within the same workshop or workplace; As part of company-wide quality control activities, they continually carry out self-development and mutual development, control and improvement within the workshop using quality control techniques with the participation of all members.
The basic ideas of quality control circles are:
1. Contribute to the improvement and development of the company.
2. Respect man and create a pleasant workplace where it pays to be.
3. Exercise human capabilities fully and eventually take advantage of their infinite capabilities.
4. The creation of the technological base of the business system
One of the factors that have characterized the transformation of Japan's economy and industry is the improvement of the technological level carried out through rapid innovation in technology and the various efforts of the industrial sector as a whole.
After World War II, Japan has been making greater efforts to introduce new technologies with a view to keeping up with the world's technological innovation. A form used by them for technological advancement has been reverse engineering, which has integrated the technological approach with the social economic one.
Reverse engineering, as an economic way to efficiency, consists of introducing the advances of the physical, mathematical and genetic sciences to industrial and agricultural production techniques, which, based on the results obtained in other processes and different countries, and decomposing them In its component elements, it manages to locate those that determine the attributes of its efficiency and, in addition, act on them in such a way that its modification leads to an increase in efficiency levels.
For the Japanese, solving the copying / technological creation contradiction has made it possible to reach a technological base in which obtaining avant-garde products rests on their own technology, with their own techniques and highly used foreign and own raw materials. Japan has distinguished itself by skillfully purchasing technology licenses, patents, and agreements, primarily from the United States. This entire process has been led by MITI.
Reverse engineering has advantages, these are:
1. Decrease in research and development costs.
2. Decrease in investment cost.
3. Decrease in production cost.
4. Increased quality.
5. Decrease in time, as a common variable (saving years and months).
6. Increase of compatible substitution.
7. Increased competitiveness.
8. Creation of the company's technological base.
Japan, thanks to the aforementioned, from technology importer is becoming a technology exporter, it is exporting technology to developed countries.
5. The double business structure and the horizontal and vertical organization of monopoly agreements
The global trend towards the fragmentation of the production process has caused subcontracting to become increasingly important, consisting in the fact that a company (the main one) entrusts other companies (subcontractors) with the production of a more or less important part of the components of their products.
The economic impacts of subcontracting are multiple, the most relevant being: the decrease in costs, the increase in flexibility and the reduction of the necessary resources.
Through subcontracting, the main company manages to reduce its costs, by reducing the magnitude of certain resources (fixed assets) that imply greater structural charges or fixed costs and, in most cases, by acquiring products (components) from the subcontracted company or factors) at prices lower than the costs that it would have incurred in manufacturing them itself.
The reduction of the dimension of the fixed assets and the greater adaptability to changes in the demand for its products, to changes in the products themselves, in technology, in tastes, allows the subcontractor company greater flexibility, a very important condition in the present. The same reduction in fixed assets, together with the decrease in the stocks of components that go to subcontracted companies, means that the main company reduces the resources necessary to carry out its activity.
The following diagram shows the advantages of small and medium-sized companies.
As mentioned previously, in Japan there is a grouping between companies, interrelated horizontally, with the name of zaitbatsus. These are groups of large firms operating in the Japanese economy. In the war period they engaged in the military industry and were dismantled by the United States at the end of the war, re-emerging as monopolies. The Japanese currently have six great zaitbatsus: Mitsui, Mitsubishi, Sumitomo, Fuyo, Sanwa and Ichican groups.
Each zaitbatsu is made up of several firms, a bank, trading house, insurance house, shipyards and the domain of a given industry. The relations between the zaitbatsus are carried out horizontally, since they are not fundamentally subject to technological ties or property or productive structure, but rather are limited to monopoly agreements in terms of prices and leadership in markets and territories.
Linked to the zaitbatsus, but observing a vertical structure, are the so-called keiretsus. Its appearance is part of the 1960s, when corporate groups of small and medium-sized companies subordinate to large industry developed, whose relationship was given by subcontracting activities. The subcontractor companies were grouped under the big ones in subordinate conditions.
This structure gives Japanese capitalism great flexibility because it works as an escape valve for production and employment capacity, workers are not fired, but instead move to other small companies that do not have as much robotization and in this way cushion unemployment.
Keiretsus are also characterized by allowing very stable relationships, both from an economic, financial and commercial point of view, and guarantee the delivery of production just in time (just in time). A peculiar issue in the keiretsus is their property relations, since they have developed a mechanism of cross-holding of shares; 75% of the shares are owned by other firms, only 25% are in the hands of individual shareholders. That 75% is not traded on the stock market with which the firm is protected from hostile actions in the environment. Japan has a double structure in the economy made up of large, medium and small companies.
6. The globalization of the world economy and the “immigrant” company
Globalization presupposes the incorporation or integration of all countries in a dynamics of economy functioning on a planetary scale and the fragmentation of spaces and processes. All the regions of the planet, with their respective economic structures, material and human resources, will be able to function in this global dynamic where current competitive advantages are increasingly due to the ability to adapt to changes whose levels are given by knowledge and qualified human resources..
Globalization is based on the productive changes in the pattern of accumulation of global capital linked to the ongoing technological revolution. The flow of investments from these countries is different, both due to their geographical orientation and their form.
The "immigrant" company represents a new type of business organization that will respond to the phenomenon of globalization of the economy and will differ from the so-called "subsidiary company" and "subsidiary company". Its appearance is framed in the 1970s with operations in the manufacturing sector, but reached its development levels in the 1980s.
The formation of the "immigrant" company is the result of the interrelation of the macro and microeconomic levels expressed in the country's economic policy, which through the business system transforms the foreign company into an "immigrant" company, a condition by which it can carry out their interests without opposing those of the country in an antagonistic way.
The "immigrant" company guarantees the reproduction of national capital in open economy conditions and develops a complete business system on the basis of which it develops its corporate strategy; attaches equal importance to business, both abroad and domestic.
It combines both the conditions of a foreign company and a company created in the country so that it can act in accordance with the business system and essential interests that it contains; that is to say, it implies an insertion of the foreign company in the business system of the native company, at the same time that it protects it from hostile actions of the competition. This insert has peculiar characteristics:
1. The “immigrant” company makes direct investments and builds its own plants, maintaining stability at the management points.
2. It uses local workers and specialists and creates local managers, but keeps Japanese managers in key positions.
3. It penetrates not only the local markets, but also the markets of the triad the United States, Japan and the European Union, managing to maintain itself.
4. It develops its activity in high and medium technology sectors, which encourages it to produce products with high added value and enables it to acquire, stabilize and create new markets.
The study of this phenomenon, which has only just begun, constitutes one of the research priorities to take advantage of the Japanese experiences in business organization abroad and the adequate understanding of its negotiation system.
Final Considerations
Certainly, the organization of business competition and its state regulation in Japan offer features that enhance the ability to obtain surplus value internationally with respect to the United States and Western Europe and that are not only associated with obtaining relative surplus value, but also to obtaining absolute capital gains.
The great competition among workers generated by the separation in Japan between ownership and management, at the same time increases the degree of exploitation and business efficiency. The degree of real subordination of labor to capital in Japan can be considered very high in this sense, since the Japanese worker is interested not only in his back and hands, but also in his intelligence and conscience at the service of capital.
As an example of this, the Japanese state found a way to reach and outperform the most developed capitalist countries in the post-war technological competition: it achieved technology transfer by all possible means and at the same time, increased the degree of exploitation of its class national worker, by extending the working day (overtime) and increasing the intensity of work above the international average.
From all of the above it can be deduced that increased exploitation is the antidote for the less technologically advanced countries compared to the more advanced countries, which allows a higher rate of accumulation, especially if preference is given to "function capital" on the "capital property".
Bibliography
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See Dictionary of Political Economy, Editorial Progreso, Moscow, 1985.
See Inai Masaaki: Kaizen. "The key to Japanese competitive advantage", Compañía Editorial Continental, SA de CV, Mexico City, 1989.
See Kaoru Oshikawa: "What is total quality control?", Editorial de Ciencias Sociales, Havana, December 1977.
See Joaquín Fernández and Ernesto Molina: ob.cit.
See group of authors: The strategic direction of the company. An innovative approach to management (s / d)
See Sindo Michihiro: Japanese Management in Japanese Capitalism (conference), Cuba-Japan International Event, Havana, September 5-7, 1994.
See Adelaida Aria Marrero, Joaquín Fernández Núñez, Magaly León Segura, Ernesto Molina Molina, Olga Pérez Soto and Idalia romero Lamorú: The Japanese business organization and its compatible aspects with business restructuring in Cuba, Faculty of Economics of the University of Havana and CEAO Japanese Studies Division, Havana, 1995.
