Discuss the following questions in class before reading the case. 1. In your opinion, what are the reasons for the Japanese “economic miracle” that has occurred since World War II? 2. Many Japanese companies have become extremely successful in international business during the past twenty years. Which Japanese firms and products are well known in your country? In your opinion, why have these Japanese products been so successful? 3. The Japanese style of management has received considerable attention lately because of the success of the Japanese in doing business overseas. What do you know about Japanese management techniques? 4. How would you describe the system of management that is widely used in your country?
THE MORIOKA MANUFACTURING
During the 1970s and 1980s, worldwide attention has focused on the successes of Japanese firms doing business in the United States, Europe, and elsewhere. Nissan, Toyota, Honda, NEC, Sanyo, Panasonic, and numerous other Japanese brand names have become household words throughout the world. Only two or three decades ago, the largest and most successful international firms came almost exclusively from the United States and Western Europe. How have the Japanese attained such an impressive position in world markets? As we have already seen in “The U.S. Auto Industry Case,” the Japanese auto manufacturers are currently exceeding their American and European competitors in labor productivity and in reducing production costs. In addition, in many industries the quality of Japanese products is perceived to be better than that of firms from other countries. Companies that want to compete successfully against the Japanese will need to achieve similar results in their own business activities. The purpose of this case is to focus attention on the issue of labor productivity, using the Japanese model as a basis for the discussion. Japanese-style management has been widely analyzed, from its emphasis on long-term employment to its concept of consultative decision making. The central issue in all of the analyses is that Japanese firms appear to pay more attention to human resources (i.e., the people who work in the firm) than do firms from other countries. Among the policies used by Japanese firms for human- resource management are these four key elements: 1. long-term employment,
2. slow performance evaluation and promotion,
3. generalist career paths, and
4. consultative decision making.
Since World War II, large industrial corporations in Japan have followed a practice of hiring their employees and managers directly from high school or college, then keeping them employed throughout their careers within the same firm. Very little mobility exists between companies, since Japanese society has come to expect that a person will remain with the same employer until retirement. A very positive aspect of this practice is that it provides job stability for everyone in the firm, so that individuals tend to identify their own interests more with the company, which must perform well if their jobs are to be protected. Also, the company can justify expenditures on the training of employees, knowing that they will remain and offer benefits to the company from their increased skills. The negative aspect (from a Western point of view) is that few socially acceptable choices exist for someone who wishes to change companies during a career, regardless of the reason. By giving careful evaluation to each employee and manager, Japanese firms demonstrate a sense of caring for the person. Also, by promoting managers through the ranks of management very slowly, the firm conveys to all that long-term performance is what counts. Even after the long initial period, ranks tend to be equal among people with similar seniority, though tasks and compensation become differentiated according to performance. People “save...