Keys to the success of Japanese organizations
- Increasing productivity Import of technology Distinctive work ethic (other values) But even more important: A different administrative approach.
What can be learned from Japanese organizations
Japanese companies in the US use a style modified for the American reality. Not only in financial and operational matters, but also in terms of personnel.
Many American companies have failed to impose the American system on Japan. The cases of successful companies are precisely those that have not, such as McDonald's and IBM.
The fundamental difference in organizational systems is neither in formal structure nor in size and centralization.
Characteristics of the Japanese Administration System
1) Employment for life
The normal thing is that a Japanese company carries out its hiring once a year. Those who enter the company have their job insured until they are 55 years old, at which time they must retire if they do not belong to the high administrative levels.
They then receive a sum equivalent to five years' salary. To better understand the system, a little history of Japanese companies must be analyzed, until before World War II they were grouped in structures called Zaibatsu.
A Zaibatsu was made up of a group of 20 to 30 large companies from various sectors, gathered around a powerful bank. From each of these companies hung many smaller companies, or satellite companies, which provided specific services to the larger ones, constituting a Bilateral Monopoly in which each satellite company worked exclusively for the larger company and this, in turn, only hired the largest companies. minor services.
The bilateral monopoly does not exist in the West, since there is mistrust regarding having a single supplier of some input. In Japan that does not exist, which makes these monopolies a factor that significantly increases productivity. Although the Zaibatsu ceased to exist after the War, their spirit was preserved.
Japanese companies finance their own social security system in which the government is not directly involved.
Employees who retire when the age is due, are being relocated to smaller companies, either in satellites or larger companies as appropriate, and continue to provide their services for another period. The chain is Bank-Large Companies-Satellites. Only those who withdraw from satellite companies have nowhere to be relocated. On the other hand, the Interior Ministry of Industry and Commerce is the one who can locate its retired employees in a bank.
In this way described, a marked stratification is generated among companies, which leads to a high stratification in educational institutions, since accessing an education of excellence and, therefore, entering the imperial universities, ensures an important position. Education is a subject of vital importance for the Japanese, who train and prepare their children from the earliest years to gain access to these universities.
Factors that make lifetime employment possible:
- Payment of a semi-annual bonus, as compensation, which depends on the performance of the company (corresponds to between 5 and 6 salaries per year), which constitutes a strong incentive to feel part of the organization. It is proportional to the results of the company and not to individual factors.There are many temporary employees, mostly women, who are fired in bad times. These serve as a buffer to protect the work of men who are employed for life. Satellite companies receive service contracts that are more susceptible to fluctuations, then it is they who receive the impact of bad times.
The combination of these factors reduces uncertainty and allows male employees to enjoy their work for life.
Other factors: Trust, Loyalty to the signature, Delivery of the individual to his work. (They are the basis of Theory Z).
2) Evaluation and Promotion
Another fundamental difference of Japanese organizations lies in their approach to evaluation and promotion.
The evaluation process is extremely slow, and it can take up to 10 years for an executive to receive a significant promotion. During that period, people of the same level will receive the same promotions and raises.
The slowness of the process makes short-term corporate games difficult (although it does not eliminate them completely). An open attitude towards cooperation, performance and evaluation is fostered, since it favors the possibility that the real performance level will finally come to light. Young executives are not attracted to making careers at the expense of others, or to pushing for decisions.
The layout of physical spaces in a Japanese office supports this attitude towards performance evaluation. Huge rooms where everyone works together and everyone is aware of what others are doing.
The slowness in the formal evaluation and promotion processes seems totally unacceptable to Americans, not only because they want quick feedback and progress, but because it seems to prevent important positions from being assigned to the most capable want a start. They also point to the incongruity between formal titles and real responsibilities: the most skilled quickly receive responsibilities, however, promotion only comes when they have demonstrated more deeply what they are capable of doing. On the other hand, those who have already proven their ability and contributed to success in the past are assured of a title and a better salary, despite the threat posed by someone younger.
How do you get young employees to willingly accept these greater responsibilities without commensurate remuneration? Through the working groups. They belong to several groups at the same time, which generates a strong sense of belonging and commitment that affects their behavior. The support and approval of your peers is a factor that powerfully affects your attitudes, motivation, and behavior, more than salary, promotions, and hierarchical control.
The Japanese organization only accepts young people who are still in the formative stage of their life, engages them in multiple groups and thereby instills in them a feeling of solidarity and camaraderie.
What is transcendental then, is not the reward or evaluation, but the subtle impression that the individual leaves on his companions, who cannot be deceived.
3) Non-specialized professional paths (Path)
A very important feature: they manage to develop individual careers. The Japanese system does not have people with detailed knowledge of a specific industry, rather it uses constant job rotation to ensure that its high-level executives are experts in harmoniously relating each function, specialty and office of the company.
Weakness of the system: lack of area experts. Studies carried out showed that in the USA, the trajectory of senior executives indicates that they have not performed more than two functions on average.
This has the problem that by developing a lifetime in a specific area, you can lose sight of the global needs of a firm and concentrate on that specific field.
In the USA there is a career in various groups, but in the same specialty; in Japan, a career is made in various specialties, but in a single organization. Then, Japanese executives are not worried about having to look for work because they have it insured. The Japanese do not specialize in a specific field, they specialize in an organization, in learning how to do so that a unique and specific business works as well as possible.
Japanese companies do everything in their power to instill a sense of loyalty in their staff, ensuring that they are treated fairly and humanely. Much more is invested in training.
The most respected managers are those who are in charge of the staff, a situation radically opposite to that of American organizations.
Strengths and weaknesses of both approaches to career:
- North American approach
- Advantages: Ability to organize your experts into a coordinated workforce. Facilitates industrial production Disadvantages: Lack of deep integration among its workers.
The operation of a Japanese corporation
Unlike the North American system, based on the establishment of specific objectives to evaluate performance, the basic control mechanism in Japanese companies is encompassed in a management philosophy that describes the objectives and procedures aimed at achieving them.
Goals represent the values of owners, employees, customers, and government authorities. The procedures to achieve these objectives are determined by a series of beliefs regarding the type of solutions that must be taken and that tend to give good results in the industry or in the company. Whoever manages to grasp the essence of this philosophy of values and beliefs, can infer a number of specific goals that adapt to changing conditions. These goals will be consistent across individuals.
This theory is based on an organizational culture, which is a set of symbols, ceremonies and myths that communicate to the personnel of a company the values and the most deeply rooted beliefs of the organization. This culture develops when employees have a wide range of common experiences that allow them to communicate with each other a myriad of subtleties and creates an environment of coordination that greatly facilitates decision-making.
The process of decision making
Most notable: participation in the decision-making process.
It is different from the participatory goal setting style. (No more than 10 people).
In the Japanese case, all those who will be directly involved with the decision participate. They can be many. Normally a team of 3 people is in charge of talking to everyone until a true consensus is reached. Despite the longer time required, there is a greater chance that everyone will fully support the decision.
When an important decision has to be made, the younger and less experienced person is entrusted to draft the proposal. In this way, vitality is not lost or the process of change is lost. Of course, managers know what the best decisions might be, and the youngster does his best to find them. The same values and beliefs are instilled. Errors also generate good ideas.
This process takes place within the framework established by a harmonically shared philosophy, beliefs and values, which justifies that so many people participate fully and achieve effective results.
Another characteristic: ambiguity in the definition of responsibilities in decision-making.
In Japan, no one has individual responsibility for a particular area, but a group takes joint responsibility for tasks. A very important reason for the collective assignment of responsibility is that bottlenecks are avoided when one of the employees is unable to perform their part of the job.
Collective values
It is the aspect that is most incomprehensible to Westerners: orientation towards shared values, especially the collective sense of responsibility.
Examples indicate that Japanese workers are uncomfortable with the idea of acting individually to improve production. This collectivism is not a goal to strive for or a corporate goal to achieve, rather, it is a natural process that causes nothing significant to happen as a result of individual effort. Anything important stems from a group effort.
Holistic interest in the individual
Holism: an integrated whole has an independent reality greater than the sum of its parts.
The Japanese company forms inclusive relationships. A series of mechanisms provide the social support and discharge necessary to maintain an emotional balance.
Social and economic life are integrated into a single whole, therefore the relationship between individuals is intimate. There are multiple ties that bind them.
Japanese companies compared to North American companies
Models (abstractions of reality):
| JAPANESE ORGANIZATIONS (Type Z) | NORTH AMERICAN ORGANIZATIONS (Type A) |
| Lifetime employment | Short term employment |
| Slow process of evaluation and promotion | Fast process |
| Non-specialized careers | Specialty careers |
| Implicit control mechanisms | Explicit control mechanisms |
| Collective decision-making process | Individual decision-making process |
| Collective liability | Individual responsibility |
| Holistic interest | Segmented interest |
North American Companies
- High staff turnover (4 to 8 times more than Japanese) Little staff training A different tradition
Japan has a lifestyle that reflects the image of a nation whose inhabitants are homogeneous in terms of race, history, language, religion and culture. They had to learn to survive and to work together in harmony. Thus arose a transcendental social value: the importance of the individual as a human being, that is, subordinating individual preferences to the well-being of the group and knowing that personal needs will never be above the interests of others.
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