Japanese Companies in Germany:
A Case Study in Cross-Cultural Management
JAMES R. LINCOLN, HAROLD R. KERBO,
and ELKE WITT'ENHAGEN*
From a series of qualitative interviews with Japanese managers and German managers and workers in thirty-one Japanese-owned companies in the Dusseldorf region of western Germany, this article discusses differences in cultural patterns and organizational styles between the German and Japanese employees and the problems these pose for communication, cooperation, and morale. First, we deal with cultural contrasts: language issues, interpersonal styles (personability and politeness), and norms regarding the taking of responsibility. Second, we examine the impact on cross-nationality relations of established organizational practice: for example, German specialism vs. Japanese generalism; direct and vertical vs. indirect and incremental decision making. We also discuss efforts by these firms to find compromise systems that would meet the needs and interests of both sides. The third focus is the reactions of Japanese companies in North Rhine-Westphalia to German unions, works councils, and codetermination regulations. In the labor view, Japanese firms overall do no better or worse than comparable German firms.
Japanese direct investment in Western economies is concentrated in North America and the United Kingdom. In consequence, a rich journalistic and scholarly literature examines the Japanese experience in the Anglo-American countries, the management styles and organization structures of the subsidiaries, and the relations between the Japanese management and the local workforce (see, e.g., Milkman, 1991; Lincoln, Olson, and Hanada, 1978; Pucik, Hanada, and Fifield, 1989; Florida and Kenney, 1992; Oliver and Wilkinson, 1990). There is far less writing,
particularly in English, on the activities of Japanese companies elsewhere in the West. Yet the Japanese corporate presence in continental Europe is already substantial and will almost certainly grow as the European Union and the GAlT erode regulatory and other national barriers to foreign investment and trade.
The topic of this paper is Japanese firms in Germany: primarily, the contrasts in culture and management style that German and Japanese employees of such firms encounter daily in their experiences on the job. Our observations come from a set of interviews conducted in 199293 with Japanese and German managers in the Diisseldorf area, the region of Germany with the highest concentration of Japanese business, and, after London, the leading center of Japanese corporate activity in Europe. Moreover, while our Diisseldorf informants no doubt have their biases, they expressed confidence that, owing to its central location in continental Western Europe and easy access to the East, Dusseldorf would someday overtake London as the premier locus of Japanese business activity in Europe.
Moreover, Germany-North Rhine-Westphalia, in particular-presents a valuable opportunity for research on such questions because of its substantial Japanese business activity. In 1990, Japan, at 5 billion DM, was second only to the United States and the Netherlands in direct investment in the region, this accounting for half the total Japanese investment. Germany was second only to the United Kingdom in the number of resident Japanese in Europe. Forty-five percent of the German-resident Japanese population lives in North Rhine-Westphalia, with almost 8,000 in Diisseldorf alone. A 1991 survey by the Japanese Chamber of Commerce in Diisseldorf found 75,000 Germans employed by 1,099 Japanese corporations in Germany, with more than 100 billion DM in profits in Germany. As a set, then, Japanese corporations have the same weight in the German economy as does Daimler-Benz.
Our information on Japanese-owned companies in Germany comes from a series of qualitative interviews with Japanese managers, German managers, works council members, and labor leaders in the...
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