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The
Japanese
Management Theory
Junglel
J. BERNARDKEYS
THOMAS R. MILLER
Memphis State University
Many competing hypotheses have been advanced to account for the apparent effectiveness of Japanese management practices. The present review of some of the leading theories attempts to classify and clarify the
state of knowledge of Japanese management. Although each theory may
be correct as a partial explanation of Japan's success, no single conceptualization has captured the complexity of Japan's managerial achievement. Further development of integrated, internally consistent models is
needed.
In response to Japan's impressive business performance over the last decade, the mystique of Japanese management has been addressed by a deluge
of books and articles. The perceived superiority of
management practices in Japan has been the subject of intensive inquiry by both the academic and
the executive communities. Researchers' efforts to
unlock this mystery have revealed a multitude of
factors presumed to account for the excellence of
Japanese management, but the most striking results
perhaps are the diversity of factors cited and the
disagreement over the causes of this success.
Competing hypotheses abound, ranging from the
"Seven S" theory of Pascale and Athos (1981)
about a unique Japanese management style to the
"bottom line" explanation that stresses the Japanese focus on long term operating results. Some observers believe that excellence in Japanese management springs primarily from an emphasis on human
resource development. Others maintain that the
source of Japanese success is not found in social
practices, but rather in the profound understanding
of the intricacies of the decision making process.
Several researchers laud the effective use of employee quality circles as the key element of Japanese success. Still others claim that Japanese expertise in technological developments and in manufacturing management is the basis of their ef-
342
Quality Circle
A common theme in the literature on the effectiveness of Japanese management is their development and utilization of "quality control circles" or
just "quality circles," as they are now commonly
called (Cole, 1980; Rehder, 1981; Takeuchi, 1981;
Yager, 1980). Although there are many variations
of quality circles in practice, nearly all are structured as a relatively small group of employees who
meet together to discuss and develop solutions for
work problems relating to quality, productivity, or
cost.
In many respects, quality circles are rooted in the
work of the humanistic behavioral scientists such as
Chris Argyris, Douglas McGregor, and Rensis
Likert, who have long emphasized the significance
of employee participation to effective management.
Schooled in these behavioral techniques, the Japanese borrowed and adapted them to their organizations. However, it appears that the Japanese found
their organizations more receptive to this form of
participation than have American managers. Cole
(1980) argues that Japanese managers have more
fully accepted the fundamental premise of participative management-that employees are capable of
contributing and desire to contribute to organizational requirements of a supportive supervisory climate and that the commitment of sufficient time for
the participative process may be better satisfied in
Japanese industry than in the United States.
Thus, the quality circle theory ascribes the effectiveness of Japanese management to an in-depth application of the participation concept, which apparently has resulted in improved productivity through
higher levels of motivation, greater sharing of decision making, stronger employee commitment, and
increased job satisfaction. In an extensive review of
quality circles, Munchus (1983) concluded that
they have been successful in widely diversified cultures, but that the results of their use in the United
States are still open to question. Matsushita Electric, for example, uses them widely in Japan but
does not consider the American worker suited to
such activity.
343
and superiors). The authors' chief research instrument included interviews and observations of the
styles of chief executive officers in the United States
and Japan-in particular, the Matsushita Corporation and ITT.
Pascale and Athos maintain that U.S. management is very similar to Japan on all the hard S's of
strategy, structure, and system, but that Japan has
advantages in the soft S's of staff, skills, and style.
These advantages stem largely from the Japanese
culture, which differs in its approach to ambiguity,
uncertainty, imperfection, and interdependence.
The authors discuss at length how the Japanese
manager in communicating with others has learned
to make the most of ambiguity, indirection, subtle
cues, trust, interdependence, uncertainty, implicit
messages, and management of process, as opposed
to the U.S. managerial norm of striving for complete openness, explicitness, and directness in order
to minimize ambiguity and uncertainty. Unfortunately, the authors support their theory only with
broad generalizations drawn from comparisons of
the chief executive officer of Matsushita Corporation and ITT's Geneen.
Organizational
William Ouchi (1981) summarizes his work in
what has become the best selling book on Japanese
management, Theory Z. Instead of emphasizing the
differences in the styles of leaders of key organizations in the United States and Japan, Ouchi focused
in his writing on the organizations, themselves. He
first describes the ideal Japanese organizational
model, which he used as a "foil" against which to
compare and understand the American model. The
Japanese organization is characterized by lifetime
employment, slow evaluation and promotion, nonspecialized career paths, implicit control mechanisms, collective decision making, collective responsibility, and holistic concern for employees. In sharp
contrast, features of American organizations include short term employment, rapid evaluation and
promotion, specialized career paths, explicit control
mechanisms, individual decision making, individual
responsibility, and segmented concern for workers.
Ouchi also argues that the characteristics of Japanese management have derived from their culture
a culture woven interdependently because of collective rice farming and crowded conditions causing
Japan to be very ripe for industrialization. In con346
activities.
In contrast to the above model, Cole (1971) cautions that Western knowledge of the blue-collar
worker in Japan is still shallow and laden with stereotypes of limited validity. He claims that the vision of the Japanese worker as always polite and
unemotional differs sharply from the gregarious,
spontaneous, openly expressive workers in the Tokyo plant he observed. The character of the Japanese worker is further explicated by Tsurumi
(1981), who maintains that politeness, hard work,
orientation toward group activity, and loyalty to
management are no more inborn traits of the Japanese than of Canadians and Americans. Although a
popular view of Japanese work groups touts their
strong cohesiveness and the benefits of consensus
decision making, Cole warns that this emphasis
masks the strong competition within Japanese society. Such competition reveals itself in efforts to cultivate favor with superiors through flattery or politicking, which can result in conflicts within the
work group. Further, Cole questions the authenticity of Japanese employee security through lifetime
employment, noting that there are many devices
employers can use to get employees to quit that fall
short of actually firing them.
Yazaburo Mogi, first executive vice president of
the Kikkoman soy sauce plant at Waleworth, Wisconsin, cautions that "the Japanese seniority system, while it offers security and creates a harmonious atmosphere conducive to good results, may also
reduce incentives to do good work" ("How the Japanese Manage," 1981, p. 103). Rejecting the
".myth" of the Japanese as "supermen" and the
conclusion that Japan's industrial success is linked
to the uniqueness of Japanese human factors or
"the spirit of its workers," Blotnick argues that it
would be as correct to link Japan's success to "the
coercive, regimented side of its society," which
Americans would "hardly want to emulate" (1981,
p. 132).
The transfer of strong family ties to industry has
fostered several interesting phenomena. Tanaka
(1981) reports that employees tend to hire "total
persons," and employees tend to become totally immersed in the organization for which they work.
Because the company becomes a surrogate for the
family, work takes on the same ethos as a contribution to the family-loyalty, sincerity, and so on.
The company's (family's) prosperity becomes more
Japanese firms arise from consumer or environmental issues. Rarely does protest involve issues such as
feminism, investment policy, wages, or living and
working conditions. For protests that do arise, litigation is quite uncommon (Japan has half the population of the United States, but only 11,000 lawyers). Nor is shareholder pressure a viable
alternative for special interest groups; 90 percent of
all directors are "inside" directors employed by the
company (Janger & Berenkein, 1981).
A further source of confusion is the tendency toward oversimplification in explaining the effectiveness of Japanese management. It is doubtful that a
one-factor or two-factor theory of management
such as "decision making" or "quality control" can
account fully for a country's economic achievements. Surely a group of complex forces taken together delineate the dimensions of Japanese management experience. A related element of confusion
is the difficulty of distinguishing causation from
correlation. Sullivan (1983) bases his anti-theory Z
on such an argument.
Another caveat to the student of Japanese management concerns the tendency toward overgeneralization of the "Japanese management" mystique.
Research on Japanese management practices has
focused primarily on large, highly visible firms in
the automotive and electronics industries. What of
the experience of the smaller firms and businesses
engaged in retailing, agriculture, chemicals, or in
the service industries such as banking and finance?
Can one characterize the management practices of
an entire nation from such a small and nonrepresentative sample? Although Ouchi and Pascale and
Athos have highlighted dramatic differences between Japanese and American management practices, it is doubtful that the few firms cited truly
represent the norms of "Japanese" and "American"
management. The excellent productivity and quality of Japanese manufacturing in such mass production industries as automobiles, household appliances, and steel are well recognized, but one should
not conclude that the Japanese enjoy superiority
over international competitors in all industrial efforts. As noted by Tsurumi:
Japanese industriesdo not outperformAmerican,
Figure 1
Fundamental Factors Underlying Japanese Management Practices:
A Suggested Pattern of Causalitya
Underlying Factors
Management Practices
Commitment to sufficient time to manage
Diligence in implementation of plans
Discipline and order in work
Sufficient time to implement concepts and systems
Development of an integrated organizational philosophy
Growth of implicit control systems
Atticulation of company philosophy
Executive investment in employee training and development
Socialization process in hiring and integration
Reduced turnover and high loyalty
Nonspecialized career paths
Development of internal labor markets
Emphasis on soft S's-staff, skills, style
Company unions rather than craft unions
Emphasis on teamwork and cooperation
Consensus decision making
Participative management
Trust and interdependence
Quality circles
aOverlapping lines represent shadings of dual causality. The authors acknowledge that some of the resultant practices may, in turn, reinforce the underlying factors, suggesting two-way causality.
349
ceptance of changes in work-methods and technology that enhance productivity. (This approach
contrasts sharply with an American tendency to
reap short term benefits from new employees with
entry-level skills by retaining them in a job until
they leave the organization.)
The recruitment and selection process is approached differently when one hires for a lifetime
rather than the short term. More emphasis must be
given to the socialization factors-the "fit" of the
employee to the organization, one's satisfaction
with the company philosophy, one's relationships
with peer groups at work, the acceptance of management style, and so on. Indeed, hiring may be
based more on social factors than on entry skills,
because the latter will be utilized less.
The intensive socialization of the Japanese firm's
efforts to inculcate the culture of the organization
in employees-through such extensive ritualistic
practices as employee calisthenics, singing the company song, after-hours group activities, and company sponsored vacations-help develop and sustain
long term commitment and loyalty to the organization. The holistic concern that is evidenced for employees and their families may be viewed as a sensible effort to safeguard the employer's substantial
investment in human resources and further bond
the employees to the organization.
The long term commitment and concern for employees and the consequent familial relationship
promote trust and support of organizational leadership. Unlike the employee who is likely to remain
with an employer (and a boss) for a short time, the
Japanese system promotes accommodation and
unity of interest. Knowing the extended nature of
the employment practice, the worker is less inclined
to engage in major confrontations or conflicts that
would damage the long term superior-subordinate
relationship. One would expect communications to
be more gentle, subtle, implicit, and "family
oriented."
Finally, a commitment to lifetime employment
with holistic concern for employees is likely to produce a balanced, reciprocal psychological contract
calling for a "company" type of identity. The employer's side of the contract is likely to include
more participation of employees in the decision
making process. When one has remained with a
company long enough "to belong," the person also
is more likely to be "consulted" on important mat-
imization, certain benefits are likely to follow. Management is allocated more time to develop objectives and implementation plans. The longer planning horizon is conducive to the generation of
interpersonal relationships that foster mutual understandings and implicit goals. Furthermore, the
time frame of all plans-short run, intermediate,
and long term-tends to lengthen, and immediate
pressures tend to diminish. Deliberate planning and
communication exhibits itself in orderliness and diligence of implementation of production operations
and in the integration of manufacturing strategy
and operations policy. There is time to produce customized in-house process equipment, and, perhaps
more importantly, the long tenure of employees provides time to select employees whose skills match
the equipment or to train those whose skills do not.
The impact of the long planning horizon on Japanese industry is further evidenced in the activities
of the Ministry of Trade and Industry, which provide a supportive, stable environment for the industries that are responsive to expressed national economic goals. The predictability of public policy
toward business and industry permits an easier organizational commitment to long term strategies
rather than a penchant for short run expediencies.
The success in Japan of quality circles, statistical
quality control, and consensus decision making also
is facilitated by the long term focus. Often the lack
of success with these approaches in the United
States has not been because they are faulty in theory or concept, but rather because they have been
implemented poorly. Poor implementation usually
means too hastily introduced. However, given sufficient time for employers to become comfortable
with these new approaches, and with co-workers,
many implicit control systems and corrective adjustments arise to prevent the failure of these complex managerial concepts and systems.
Commitment to Lifetime Employment
The mutual commitment of Japanese management and the employee to lifetime employment appears to underlie a number of the celebrated Japanese management practices. The mutual awareness
created by the investment of the two parties permits
long term efforts in training and development. It
also encourages rotational training programs
outside one's specialized field and, perhaps most importantly, as cited by Drucker, promotes the ac350
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