Case Study Five: Culture Clash at Oyamada Industries Oyamada Industries is a Japanese multinational corporation that develops and

produces a range of consumer electrical products including televisions, MP3 players and computer games consoles. It has recently moved into the personal computer market producing a range of notebooks, PD s and peripherals. It has !" subsidiary operations #orld#ide $the ma%ority of #hich are in &outh'(ast sia) #ith appro*imately +,,, employees. In -,,,, Oyamada opened a greenfield plant producing ./D and plasma televisions for the (uropean market in 0remen, 1ermany. fter an e*tensive decision'making process, Oyamada had chosen to site the plan in 0remen to benefit from the available skills in the local and national labour markets and because it felt that, #ithin a (uropean conte*t, 1ermany #ould represent a good 2cultural fit3 #ith the Oyamada approach to labour relations and production. 4his #as based on an assumption of similar degrees of collectivism #hich contrasted #ith its principle alternative option to build a plant in (ngland. 5hen the plant first opened Oyamada 0remen it had a #orkforce of -6, employees. ll

production #orkers at the plant #ere 1erman and recruited primarily from the local labour market. Many #orkers had previously been employed at as recently'closed 1erman producer of electrical e7uipment for the automobile industry. Production at the plant is organised in a typically Japanese manner #ith self'managed and cross'functional teams given responsible for particular aspects of production. 5hile some line manager roles have been filled by 1erman #orkers #ith previous supervisory e*perience, the ma%ority of these #ere filled by Japanese #orkers brought in from other Oyamada subsidiaries. Originally, all the senior managers at the plant #ere Japanese and had previously #orked at other subsidiaries or Oyamada head7uarters in 8yoto. and development activity continues to be done at the company head7uarters. Over the 9::,s Oyamada sa# significant gro#th in global market share in its core areas of operation. In particular, it sa# its presence gro# considerably in key markets in the ;& largest subsidiaries in other parts of &outh (ast sia, particularly in /hina. and 5estern (urope. During much of this decade, the ma%ority of its products #ere produced in its t the time of its In all of its opening, 0remen represented one its largest investments outside of sia. ll research

subsidiaries, Oyamada has sought to impose its core approach to <=M albeit tailored to fit #ith local legal re7uirements. &enior managers take the perspective that organisational culture can override national cultural differences and, therefore, it has largely not responded to differences in cultural norms in its management style, approach to employee relations and the organisation of #ork. 4he reason for this is that senior management feel that the high levels of productivity #hich Oyamada achieves, particularly in comparison #ith its 5estern competitors, is partly a 7uestion

of culture #hich reflects the inculcation of traditional Japanese values in its #orkers. >or this reason, an e*portive approach to <=M has been adopted consistent #ith Oyamada3s global business strategy and tight <? control over subsidiary decision'making and target'setting. Initial #orker training #as done by Japanese trainers from other subsidiaries or <? #ho stayed on site for three months until the plant #as up and running. Production supervisors go to Japan every si* months to learn ne# techni7ues, to discuss developments and to disseminate these in the 1erman plant. &ome #orkers on highly'specialised machinery spend some considerable time in Japan learning associated techni7ues and this practice continues. 4here are, ho#ever, some areas of moderate local adaptation in labour management. In Japan Oyamada #ould typically select school leavers to #ork as operators, #hilst in 1ermany most #ere older #orkers #ith some e*perience, along #ith a handful of apprentices. &chool leavers in 1ermany #ere regarded as being unreliable and not 2team players3 #hich could contribute to problems of absenteeism and lacking #ork ethic. Despite some reservations about the manner in #hich the dominant approach to <=M at Oyamada and the 1erman principles of co'determination and #orks councils might #ork together, senior managers #ere initially surprised by the degree of cooperation in #orker consultation $for e*ample, over substantive issues of #ork design). safety fault. fter si* months, ho#ever, the company #as forced to recall a number of the televisions produced at 0remen because of a ;pon investigation, the production manager attributed the problem to having emanated from a single operator on a highly'specialised piece of machinery having 2informally3 trained a colleague to operate the machine, unbekno#nst to management. 0oth #orkers #ere reprimanded but complained that #orkers should be trained across machinery rather than rigidly sticking to single areas of operation. ?uality initiatives such as total 7uality management and 7uality circles #ere also blamed for the 7uality problems. 4hese have been implemented #holesale in the 1erman plant but are deemed to have been unsuccessful, not least because #orkers feel that they conflict #ith the role of the #orks council. Moreover, 7uality circles often take place outside of normal #orking hours and involvement is unpaid. Meetings are, therefore, poorly attended. subse7uent decline in the demand for Oyamada televisions produced in 0remen also sa# the need for the plant to cut costs in order to maintain the levels of efficiency demanded by head7uarters. &enior managers decided that the only #ay to achieve this #as to make a number of #orkers redundant. 4he 7uality problems also sa# the escalation of a number of employee relations problems at the plant. 4he operation of the #orks council became more conflictual #ith managers and union representatives failing to come to an agreement over a range of issues. 4he <= director felt that the union #as simply being obstructive and argumentative and #anted to

punish management for the mistakes of #orkers. Markus

cher, the local union representative,

responded by claiming that #hilst Oyamada #as happy to adhere to the fundamental principles of Japanese employment #hen it suited them, it re%ected them #here it acted to benefit #orkers $for e*ample, a strong commitment to long'term employment security). <e also claimed that the company failed to understand the basic principles of 1erman employment relations and simply #anted the union to be passive and for the #orks council to simply 2rubber'stamp3 managerial decisions. Questions 9. Dra#ing on the typologies of cultural difference, discuss #hy Oyamada has e*perienced <= difficulties at its 0remen plant. 5hy might managers have assumed 1ermany to have been a good 2fit3 for the company@ -. Dra#ing on an understanding of Japanese and 1erman employment relations, ho# might #e account for both the differences in opinion over the operation of the #orks council@ <o# might the changed attitude of the Japanese senior managers to#ards the #orks council be e*plained@ 3. 5hy might the profile of the operator #orkforce in 1ermany represent a problem for the Japanese approach to <=M, compared to that #hich is found in many of Oyamada3s plants in Japan and &outh (ast sia@ !. <o# might Oyamada have avoided the problems detailed in the case study@ <o# might the company no# address these problems@