^Academy of Management Review, 1984, Vol. 9, No. 2. 342-353.

The Japanese Management Theory Jungle^

J. BERNARD KEYS
THOMAS R. MILLER
Memphis State University
Many competing hypotheses have been advanced to account for the ap-
parent effectiveness of Japanese management practices. The present re-
view 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 conceptu-
alization has captured the complexity of Japan's managerial achieve-
ment. Further development of integrated, internally consistent models is
needed.

In response to Japan's impressive business per-
formance over the last decade, the mystique of Jap-
anese management has been addressed by a deluge
of books and articles. The perceived superiority of
management practices in Japan has been the sub-
ject 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 Japa-
nese focus on long term operating results. Some ob-
servers believe that excellence in Japanese manage-
ment 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 em-
ployee quality circles as the key element of Japa-
nese success. Still others claim that Japanese exper-
tise in technological developments and in manu-
facturing management is the basis of their ef-
'Portions of this paper were presented at the 42nd Annual
Meeting of the Academy of Management, New York, 1982. The
authors acknowledge Harold Koontz (1961), author of the clas-
sic paper, "The Management Theory Jungle."
342
fectiveness. Yet another school of thought attributes
Japanese achievement to their mastery of the use of
statistical quality control applications.
To those attempting to comprehend the Japanese
phenomenon, it appears that a dense jungle of con-
fusion has grown up consisting of conflicting "theo-
ries" (using the term broadly), each of which offers
hope as an explanation for the apparent superiority
of the Japanese system of management. The jungle
of Japanese theories is reminiscent of the "mental
entanglement" that characterized American man-
agement theories in the 1950s, addressed in a clas-
sic article by Harold Koontz (1961). The purpose
of this paper is to classify and to clarify the state of
knowledge of Japanese management.
The Jungle of Theories
Manufacturing Management
Robert H. Hayes (1981) conducted his research
by visiting and studying several plants of six Japa-
nese companies. He finds the answer to Japanese
superiority in their excellent manufacturing man-
agement: clean facilities, responsible employees, lit-
tle or no inventories on the plant fioor made possi-
ble by the absence of work stoppages, almost no
rejected products, and "just-in-time" materials arri-
val. He discovered a remarkable absence of crisis
management in the plant and excellent mainte-
nance of equipment. Hayes captures the essence of
Japanese manufacturing management in the old
Japanese proverb: "pursuing the last grain of rice in
the corner of the lunchbox." He points out that the
Japanese are never satisfied with the quality of
their products even when the defect rate is at an
unbelievable 1 percent, nor are they satisfied as
long as any defect exists in the manufacturing oper-
ation. Hayes believes that technological advantages
in Japan stem not from superior technology per se,
but from the Japanese insistence on building their
own process equipment in-house, which they in turn
match with skilled employees trained in-house.
They will not accept the compromise of a machine
developed for several "users, and therefore several
uses."
Further support for the manufacturing manage-
ment theory is provided by Wheelwright (1981),
who states that Japan's impressive accomplishments
in manufacturing result chiefly from the effective
integration of operations policy and manufacturing
strategy. In marked contrast to the Japanese, the
author cites the common American tendency to
treat product quality and production planning as
"swing factors" that can be traded off in order to
meet the production output deadline. Thus, an
American manager may deliver a product that, al-
though functionally acceptable, does not meet the
quality specifications. In reporting their impressions
after visiting the plants of three Japanese compa-
nies—Tokyo Sanyo Electric, Toshita Tsurumi
Works, and Yokogaua Electric Works, General
Electric manufacturing executives agreed that the
critical differences between Japanese and American
manufacturing were not really cultural and environ-
mental, but rather were related to basic manufac-
turing policy and practice. Observers reported a
high degree of cleanliness and organization with or-
derly and timely flow of materials through the pro-
duction system. They commented that although
Americans have the necessary knowledge of effec-
tive manufacturing processes, they have lacked the
discipline to implement them fully (Wheelwright,
1981). Wheelwright concludes that Japan's "truly
impressive discipline and consistency in manufac-
turing operations" is the result of "a deliberate,
thorough, and painstakingly developed way of
thinking about the day-to-day management of pro-
duction" (1981, p. 68). In other words, he holds
that the Japanese have become so efficient chiefly
because of excellent manufacturing practices. How-
ever, in interpreting these observations in order to
isolate causes, an alternative hypothesis should be
343
recognized: orderly production operations may be
the result of the effective practice of management
rather than the cause of manufacturing efficiency.
Quality Circle
A common theme in the literature on the effec-
tiveness of Japanese management is their develop-
ment 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 struc-
tured 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 Japa-
nese borrowed and adapted them to their organiza-
tions. 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 partici-
pative management—that employees are capable of
contributing and desire to contribute to organiza-
tional requirements of a supportive supervisory cli-
mate 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 effec-
tiveness of Japanese management to an in-depth ap-
plication of the participation concept, which appar-
ently has resulted in improved productivity through
higher levels of motivation, greater sharing of deci-
sion 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 cul-
tures, but that the results of their use in the United
States are still open to question. Matsushita Elec-
tric, for example, uses them widely in Japan but
does not consider the American worker suited to
such activity.
Statistical Quality Control
In the 1950s the Japanese focused on upgrading
the quality level of their manufactured products in
an effort to reverse the notion that "made in Japan"
signaled inferior merchandise. As with the develop-
ment of quality circles, the expertise came largely
from consultants in America — in particular from
W. Edwards Deming and J. M. Juran, who lectured
widely on the development and utilization of statis-
tics and quality control techniques. The Japanese
quickly embraced and effectively implemented the
popular techniques developed in the United States,
including zero defects and value engineering, and
have become dedicated to the gospel of quality
(Takeuchi, 1981). The Japanese appreciation for
Deming's work is evidenced by his receipt of the
Second Order Medal of the Sacred Treasure from
Japan's Emperor Hirohito.
Of course, productivity is closely related to quali-
ty, and in Japan there is a fervent interest in "doing
it right the first time." Deming argues that quality
cannot be increased by inspection, and using men
and machines to separate good products from bad is
not the answer. The quality capability must be built
into the production process. In comparing Japanese
and American management, Deming (1980) argues
that Americans learned the techniques too, but the
Japanese took them seriously.
Long Term, Bottom Line
Peter Drucker suggests that the real reason for
Japanese superiority springs from their focus on
long term objectives. Large U.S. institutional inves-
tors, such as the pension funds, he laments, tend to
reject firms that do not show strong performance in
such short term measures as quarterly earnings per
share. Thus, high technology companies are reluc-
tant to "plow back money long term" for fear of
adverse effects of their price earnings ratios. The
market, he believes, has become far too sensitive to
short term fluctuations (Flanigan, 1981).
A similar theme is echoed by William Anderson
(1981), chairman and chief executive officer of Na-
tional Cash Register Corporation. He cautions that
American managers must look "beyond this
month's sales report and this year's financial per-
formance" and begin to evaluate both employee and
organizational achievements from a long term pro-
spective. The clear implication is that U.S. manage-
ment should adopt criteria that look five years
344
ahead, not just a month ahead.
Further evidence of the long planning horizon of
Japanese management is the tradition of lifetime
employment, resulting in a worker spending his en-
tire career with one firm. For example, the average
job tenure at Fujitsu is 13 years; the average job
tenure in the United States is 3.6 years (Naka-
yama, 1980). While providing essentially a guaran-
teed job to the worker, the longevity of employment
encourages extensive investment in employee train-
ing and development and promotes employee loy-
alty and esprit de corps, as evidenced by the com-
pany songs and exercise programs in many of the
large plants. The nearly complete job security also
reduces costs of turnover and subsequent recruit-
ment. But, perhaps most important, the worker's
assurance of economic security greatly reduces
one's resistance to technological change that en-
ables methods changes to be implemented more
easily. Drucker maintains that this willingness to
accept change and to embrace opportunities for
productivity gains might be "the most important se-
cret of the Japanese economy" (1971, p. 116). In
sharp contrast, the typical American worker in a
unionized firm has been conditioned to resist
change, fearing both real and imagined threats to
his/her economic security.
However, a key point in evaluating the unioniza-
tion issue should be noted. In Japan, employees be-
long to company unions rather than craft unions;
thus they could not readily change companies if
they wished to do so. The strong company affiliation
makes it easy to shift employees from plant to plant
within the same company (Tanaka, 1981). These
employer advantages are enhanced by the strong
feeling of security promoted by the Japanese life-
time employment concept. Drucker recently com-
mented that lifetime employment, which restricts
labor mobility and the threat of strikes, has ren-
dered the union powerless in the private sector, al-
most an "organ of management" (1982, p. 26).
It should be recognized that the Japanese man-
agement focus on long term profitability is feasible,
in part, because of the supportive role of the Japa-
nese government. The comments of Reddy and Rao
are revealing: "The Japanese government has been
pursuing economic growth with a passion that
American government has reserved for fighting
communism" (1982, p. 5). The close relationship
between business and government has been charac-
terized as "Japan, Inc.," suggesting the behavior of
a superconglomerate (Drucker, 1981). Indeed, some
argue that Japan's economic success is related
chiefly to the unique business-government relation-
ship fostered by the Ministry of International Trade
and Industry (MITI). As noted by Tsurumi (1981),
government policies through tax incentives and
other assistance programs are directed to rewarding
the firms fulfilling the goals that support industrial
growth and national stability. A related factor ena-
bling business to focus its attention on the civilian
product market is the low level of national re-
sources committed to defense expenditures in Ja-
pan, a much publicized criticism by American
producers.
Decision Making
At first glance, the consensus decision process of
the Japanese appears to be simply an application of
the American concept of participative management.
Ouchi (1981) states that a consensus has been
reached when there is agreement on a single alter-
native and when there is a mutual understanding of
views of the participants and when there is support
for the decision, whether one preferred it or not, be-
cause it was determined in an open and fair man-
ner. However, Ouchi argues that even this degree of
participation does not approach the Japanese con-
cept of consensus decision making, in which an im-
portant decision such as where to put a new plant
or changing a production process would involve all
who would likely be affected by it, perhaps 60 to 80
people. Ouchi further notes that two or three per-
sons would have the task of discussing the decision
with the affected employees and repeating this pro-
cess when significant changes arise. Although this
process is very time consuming, when the decision is
finally determined, the support for it is nearly
unanimous.
Howard and Teramoto (1981), professors in
Great Britain and Tokyo, respectively, argue
strongly that the most important difference in
American and Japanese management involves the
subtle differences in decision making. The word in
the Japanese vocabulary that describes decision
making is "nemawashi," which refers to the "politi-
cal" processes by which an unofficial understanding
is reached before any final decision is made on a
particular matter. The literal meaning of
nemawashi is "the process of planting a tree, i.e..
345
implanting its roots into the soil so it can grow."
The authors believe that it perfectly describes the
appropriate process of practical decision making in
any culture.
To the Western observer, the consensus decision
making process may appear to be exceedingly ineffi-
cient, but this attitude fails to give proper consider-
ation to the implementation of the decision. In de-
fense of the Japanese decision making practice, it is
advanced that a consensus decision, though medio-
cre, can yield better outcomes than an imposed de-
cision, though brilliant, because of the support of
employees, their knowledge of the decision parame-
ters, and their commitment to successful execution
of the decisions. Further, the considerable time that
goes into defining the issue reduces the risk that a
preconceived solution will prevent proper definition
of the problem, a criterion of decision making prac-
tices of American managers (Kobayashi, 1970).
Attempts at Integrated Models of Japanese
Management
Several students of the Japanese management
process have gone beyond the search for the single-
factor explanation in their efforts to develop more
comprehensive theories. Three of these notable ef-
forts will be reviewed briefly.
Seven S
Richard Pascale and Anthony Athos (1981) util-
ize in their model the framework of seven manage-
ment variables developed by McKinsey & Com-
pany. The seven variables of S's are superordinate
goals, strategy, structure, systems, staff, skills, and
style. These are the "levers" of organizational and
management functions with which executives can
influence large complex organizations. Superordi-
nate goals function as the unifying elements that tie
together the various activities and interests of orga-
nizational members.
According to Pascale and Athos, the variables
can be divided into "hard S's" and "soft S's." The
hard S's, presumably the more impersonal and in-
stitutional factors, are strategy, structure, and sys-
tems. In contrast, the soft S's, dealing more with
human values and interpersonal issues, are staff
(the concern for having the right sort of people to
do the work), skills (training and developing people
to do what is needed), and style (the manner in
which management handles subordinates, peers.
and superiors). The authors' chief research instru-
ment included interviews and observations of the
styles of chief executive officers in the United States
and Japan—in particular, the Matsushita Corpora-
tion and ITT.
Pascale and Athos maintain that U.S. manage-
ment 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 com-
plete openness, explicitness, and directness in order
to minimize ambiguity and uncertainty. Unfortu-
nately, the authors support their theory only with
broad generalizations drawn from comparisons of
the chief executive officer of Matsushita Corpora-
tion 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 organiza-
tions 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, non-
specialized career paths, implicit control mecha-
nisms, collective decision making, collective respon-
sibility, and holistic concern for employees. In sharp
contrast, features of American organizations in-
clude 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 Jap-
anese management have derived from their culture
— a culture woven interdependently because of col-
lective rice farming and crowded conditions causing
Japan to be very ripe for industrialization. In con-
346
trast, the American cuiiure nas ucvciopcu num the
spirit of individualism of an expanding frontier, a
culture less conducive to industrialization.
Ouchi and Jaeger (1978), like Pascale and Athos,
point out that the Japanese style is not culture
bound, however. Many Japanese firms, with little
adaptation, have transported their successful opera-
tions to the United States. Theory Z, then, becomes
the modified model, which includes the best of the
Japanese and American models. Theory Z empha-
sizes long, but not lifetime, employment; consensual
decision making, as in Japan; individual resfK)nsibil-
ity as opposed to the Japanese emphasis on collec-
tive responsibility; slow evaluation and promotion as
in Japan; implicit control (Japanese) but with ex-
plicit measures (American); moderately specialized
career paths (a compromise); and a holistic concern
for employees, as in Japan (Ouchi &. Jaeger, 1978).
Ouchi's theory has not been immune to criticism.
In his review of Theory Z, for example, Gibney
sharply challenges Ouchi's assertion that Japanese
organizations can be so readily typified and under-
stood from the few cases cited by Ouchi: "Ouchi
has given us a chrome-plated collection of hasty
generalizations, slogan-type writing, and dimestore
business sociology, based on what one might call a
modified dart-board technique of research" (1981,
p. 17).
A thoughtful, incisive critique of Theory Z is
provided by Sullivan (1983), who develops an anti-
theory Z "descriptive" conceptualization that con-
trasts sharply with Ouchi's "prescriptive" model.
Anti-theory Z acknowledges the existence of life-
time employment, nonspecialized careers, and auto-
matic promotions, but suggests that these are cul-
tural, historical factors rather than managerially
initiated incentives. Further, Sullivan hypothesizes
that these conditions produce some minimally com-
petent managers who, when promoted automati-
cally, must depend heavily on subordinates. The re-
sultant consensus decisions and sharing of
responsibility may stem more from necessity than
from intimacy, involvement, and trust. Thus, con-
sensus decisions and collective responsibility protect
bureaucratic, hierarchical relationships, which, he
proposes, exist in some Japanese firms. In addition,
Sullivan argues that Theory Z does not, as Ouchi
claims, emanate from humanistic management. In-
stead, Sullivan contends that Theory Z derives from
the "industrial clan" values of Durkheim (1902/
1933) that promote and sustain a regulated social
order as opposed to the self-interest of individuals.
Human Resource
Hatvany and Pucik (1981) have conceptualized a
model of Japanese management that focuses on the
maximization of human resource development. Em-
phasizing the use of an integrated system of man-
agement, the authors' model rests on the implemen-
tation of three interrelated strategies: development
of an internal labor market, articulation of a com-
pany philosophy stressing cooperation and team-
work, and utilization of a well-defined socialization
process for hiring and integrating new employees
into the company.
The unique element of Japanese management
highlighted by Hatvany and Pucik is the internal
labor market, which derives from the lifetime em-
ployment syndrome discussed earlier. Japanese
firms hire males after graduation, with the expecta-
tion of retaining them for a lifetime. This security
of male employment is assisted by using female and
part time workers in order to adjust the size of the
workforce to current economic conditions, by un-
derpaying workers in the early stages of their ca-
reers in favor of compensation in later years, and by
slow career path movement. The Japanese utilize
an intensive socialization process designed to foster
a "company man" identity.
Many specific techniques are utilized by the Jap-
anese to promote and reinforce their management
system. Broad knowledge of company operations is
fostered by job rotation, slow promotion, and the
lifetime employment. Company policies and assign-
ments tend to build group cohesiveness and team-
work and emphasize the importance of the collec-
tive interests of the group, rather than the
individual's own interests. Employee evaluation en-
compasses both performance factors and workers'
attitudes and behaviors. Open communications are
fostered by extensive face-to-face communications
(the absence of private offices, even for high rank-
ing managers) and by the frequency with which
foremen and senior plant managers tend to visit
workers on the plant floor. Use of consultative deci-
sion making practices is another supporting tech-
nique of Hatvany and Pucik's model. The final ele-
ment in their model is management's expression of
concern for employees enhanced by extensive com-
pany sponsored cultural, athletic, and recreational
347
activities.
In contrast to the above model. Cole (1971) cau-
tions that Western knowledge of the blue-collar
worker in Japan is still shallow and laden with ste-
reotypes of limited validity. He claims that the vi-
sion of the Japanese worker as always polite and
unemotional differs sharply from the gregarious,
spontaneous, openly expressive workers in the To-
kyo plant he observed. The character of the Japa-
nese 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 Japa-
nese 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 soci-
ety. Such competition reveals itself in efforts to cul-
tivate favor with superiors through flattery or poli-
ticking, which can result in conflicts within the
work group. Further, Cole questions the authentic-
ity 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, Wis-
consin, cautions that "the Japanese seniority sys-
tem, while it offers security and creates a harmoni-
ous atmosphere conducive to good results, may also
reduce incentives to do good work" ("How the Jap-
anese 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 im-
mersed in the organization for which they work.
Because the company becomes a surrogate for the
family, work takes on the same ethos as a contribu-
tion to the family—loyalty, sincerity, and so on.
The company's (family's) prosperity becomes more
important than individual prosperity, and work for
the company—not leisure—becomes the essence of
life.
Sources of Entanglement in the Jungle
Many differences in the Japanese style of man-
agement and Western styles can be attributed to
sharp differences in the respective cultures rather
than to management practices (Schein, 1981). The
common thread about which Japanese life has de-
veloped is "intimacy," which has evolved from the
dictates of collective farming, little available land
space, and the need to construct homes that offered
little privacy. The family cultural forces are trans-
ferred to business firms, reinforcing compliance of
behavior and promoting high performance (Cao,
1981). In strong opposition to this style, which pro-
motes close social relations, American life has de-
veloped around rugged individualism and indepen-
dence (Ouchi, 1981), which has grown out of the
developing frontier and a land intense economy
rather than a labor intense one. Thus, the cultural
focus on the groups' interests, as opposed to the in-
dividual's, is strongly imbedded in Japanese work-
ers in contrast to their American counterparts.
Several environmental and structural factors
seem to offer Japanese management an advantage
over the United States. Most Japanese employees
who are union members belong to company unions.
Of the directors of major corporations, 16 percent
are former union officials (Janger & Berenkein,
1981). Unions and management tend to form a
strong productive partnership, paving the way for
easy introduction of labor-saving devices. The influ-
ence of such "macro" factors as MITI, extensive
capital investment, modest defense expenditures,
lower wage rates, and the relatively undervalued
yen have been slighted as causal factors of Japan's
economic success when compared to the much pub-
licized managerial prowess of the Japanese. Fur-
ther, Vogel has argued that the Japanese educa-
tional environment is the foundation of its economic
achievement: "If any single factor explains the Jap-
anese success, it is the group-directed quest for
knowledge" (1982 p. 65). Perhaps this quest arises
in the very competitive school systems and is rein-
forced by the close relationships among academic
performance, schools attended and job placement.
Nearly all of the confrontations faced by
348
Japanese nrms arise irom ujii:»uiiici «JI unT
tal issues. Rarely does protest involve issues such as
feminism, investment policy, wages, or living and
working conditions. For protests that do arise, liti-
gation is quite uncommon (Japan has half the pop-
ulation of the United States, but only 11,000 law-
yers). 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 to-
ward oversimplification in explaining the effective-
ness 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 achieve-
ments. Surely a group of complex forces taken to-
gether delineate the dimensions of Japanese man-
agement 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 man-
agement concerns the tendency toward overgeneral-
ization 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 nonrepre-
sentative sample? Although Ouchi and Pascale and
Athos have highlighted dramatic differences be-
tween Japanese and American management prac-
tices, it is doubtful that the few firms cited truly
represent the norms of "Japanese" and "American"
management. The excellent productivity and quali-
ty of Japanese manufacturing in such mass produc-
tion industries as automobiles, household appli-
ances, and steel are well recognized, but one should
• not conclude that the Japanese enjoy superiority
over international competitors in all industrial ef-
forts. As noted by Tsurumi:
Japanese industries do not outperform American,
Canadian and other foreign counterparts . . . in ag-
riculture, aircraft, nonferrous metals, and some ad-
vanced telecommunications equipment. In the fields
of organic and non-organic chemicals, pharmaceuti-
cals, large-scale computers and large earth-moving
 equipment, American firms lead the Japanese by a
substantial nnargin (1981, p. 7).
The need for additional research to resolve incon-
sistencies and conflicts is clear. True, insights and
understandings are developing, but much of the evi-
dence is andecdotal or is so narrowly based that ac-
curate conclusions must necessarily be tentative.
Although these results are to be expected, given the
youthful state of research on Japanese industrial
sciences, some observers have been unable to resist
drawing broad conclusions that are appealing in
their simplicity but are unwarranted by the re-
search data.
Common Factors in the Theories and
Models—A Mental Factor Analysis
Although the positions of the writers above pre-
sent different views and perspectives on Japanese
management success that have contributed to the
"entanglement," there appear to be underlying fac-
tors at the heart of the Japanese system that foster
the development of the various management theo-
ries and models. First, Japanese managers seem to
be oriented to a longer planning horizon than their
American counterparts. Second, Japanese firms are
Figure 1
Fundamental Factors Underlying Japanese Management Practices:
A Suggested Pattern of Causality'
Underlying Factors
Long-Run Planning Horizon
Commitment to Lifetime Employment
Collective Responsibility
"Overlapping lines represent shadings of dual causality. The authors acknowledge that some of the resultant practices may, in turn, rein-
force the underlying factors, suggesting two-way causality.
more inclined to accept a lifetime commitment and
holistic concern for their employees. Finally, the
Japanese appear more strongly committed to the
concept of collective responsibility than individual
accountability. These three factors are explored as
integrating concepts in interrelating the streams of
Japanese management thought presented above.
A suggested pattern of causality among the un-
derlying factors of long run planning horizon, com-
mitment to lifetime employment, and collective re-
sponsibility and a summary of outcomes char-
acterizing Japanese management are shown in Fig-
ure 1. The authors contend that these underlying
factors may be chiefly responsible for the develop-
ment of the elements of the Japanese system of
management and that these are rooted in the Japa-
nese culture. Although a model of perfect causality
is not claimed, the tentative pattern of causality in
Figure 1 relates and summarizes much of the ex-
isting evidence.
Long Run Planning Horizon
Once management commits itself to planning for
the long run rather than focusing on short run max-
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
349
imization, certain benefits are likely to follow. Man-
agement is allocated more time to develop objec-
tives and implementation plans. The longer plan-
ning horizon is conducive to the generation of
interpersonal relationships that foster mutual un-
derstandings 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 dil-
igence of implementation of production operations
and in the integration of manufacturing strategy
and operations policy. There is time to produce cus-
tomized in-house process equipment, and, perhaps
more importantly, the long tenure of employees pro-
vides 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 Japa-
nese industry is further evidenced in the activities
of the Ministry of Trade and Industry, which pro-
vide a supportive, stable environment for the indus-
tries that are responsive to expressed national eco-
nomic goals. The predictability of public policy
toward business and industry permits an easier or-
ganizational 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 the-
ory or concept, but rather because they have been
implemented poorly. Poor implementation usually
means too hastily introduced. However, given suffi-
cient time for employers to become comfortable
with these new approaches, and with co-workers,
many implicit control systems and corrective ad-
justments arise to prevent the failure of these com-
plex managerial concepts and systems.
Commitment to Lifetime Employment
The mutual commitment of Japanese manage-
ment and the employee to lifetime employment ap-
pears to underlie a number of the celebrated Japa-
nese 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 im-
portantly, as cited by Drucker, promotes the ac-
350
ceptance 01 cnanges m
ogy 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 ap-
proached 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 man-
agement 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 com-
pany song, after-hours group activities, and com-
pany sponsored vacations—help develop and sustain
long term commitment and loyalty to the organiza-
tion. The holistic concern that is evidenced for em-
ployees and their families may be viewed as a sensi-
ble 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 em-
ployees and the consequent familial relationship
promote trust and support of organizational leader-
ship. 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 confiicts 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 pro-
duce a balanced, reciprocal psychological contract
calling for a "company" type of identity. The em-
ployer'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-
ters affecting the company.
Emphasis on Collective Responsibility
According to most writers, Japanese management
shuns individual accountability and credit in prefer-
ence for collective or group responsibility and re-
wards. If true, organizations managed by such per-
sons would place heavy emphasis on the values of
teamwork and cooperation. Decisions more often
would be made collectively or, more likely,
nemawashi style. Participative management or con-
sensus management would not be a style that most
managers forced on themselves, but rather would be
a natural way of engaging in the collective sharing
of responsibility.
The present phenomena of quality circles and
consensus decision making are rooted in the Japa-
nese cultural traditions emphasizing interdepen-
dence, collaboration, and cooperation. The apparent
subordination of the individual's needs and interests
to those of the group has strong precedent in the
Japanese culture. The willing acceptance of one's
role in the organization reflects the traditional com-
mitment to the priority of collective action. The em-
phasis on collective responsibility fosters a congru-
ence of goals among employees and management,
which is bolstered further by lifetime, two-way con-
tracts between them.
The presence of a hard-working, orderly
workforce can be related to the orientation to col-
lective responsibility of the Japanese. When coupled
with a high degree of goal congruence between em-
ployer and employee, the emergence of cohesive,
productive, disciplined work groups is not surpris-
ing. The impressive performance of the Japanese
work force, particularly their high productivity and
exceptional quality levels, reasonably derives from
those underlying conditions that support vigorous
implementation of high output standards and supe-
rior quality control systems.
Clearing a Path Through the Jungle
From a review of the research findings on Japa-
nese managerial success, one is reminded of Porter's
(1962) parable of the spindle, in which the prover-
bial specialists, called on to solve a problem, all
found the answer deeply imbedded in their own
particular expertise. On greater reflection, however,
it is proposed that the writers probably are not bi-
351
ased in their analyses, but rather are unable to fully
grasp the intricacies of the data to describe ade-
quately Japan's industrial success. For, as noted, in
addition to the host of management-based theories
proposed as explanations for Japanese achieve-
ments, alternative theories built on government and
environmental models, for example, "Japan Inc.,"
have been hypothesized. Thus, they are reacting not
only as did the scientists in the parable of the spin-
dle, but also as did the blind men in the fable in
which they describe the elephant. You will recall
that one felt the knee of the elephant and described
it as a tree-like creature: another felt the tusk and
likened it to a spear; and a third felt the tail and
insisted that it was small and round like a rope.
Perhaps all of the theorists are correct in attrib-
uting some Japanese excellence to the area of Ja-
pan's industry that they have examined. Maybe the
Japanese, in their obsession to redeem the honor of
their country after World War II and in their quest
for world respect in industry, have produced excel-
lence in many areas of the process of management.
If so, it should not be surprising that existing re-
search efforts have failed to capture adequately the
essence of Japanese management effectiveness. Fur-
ther, it seems unlikely that additional research
seeking single-factor or dual-factor explanations of
the Japanese success will be more successful; the
panacea will continue to be elusive. Also, the jungle
warfare among managemetit theorists cited by
Koontz in 1961 is not lacking among students of
Japanese management today. For there exists a ten-
dency to discount or discredit rival hypotheses or
conceptualizations that are incompatible with one's
own.
Of what value are the present theories in the jun-
gle? It is argued that they are of considerable value
as long as researchers and organization develop-
ment implementors recognize that elements of Jap-
anese management do not stand alone, but rather
they require supporting cultural and environmental
frameworks to be effective. As in most new systems
of management, practice must precede research,
and research must initially address small segments
of the implementation. For the organization con-
templating adoption of the Japanese system, Chung
and Gray (1982) stress that extensive preparation
and commitment is necessary, pointing out that an
adoption will not work unless the organization is
willing to change its whole philosophy of organizing
people. In a similar vein, England (1982) presents
evidence to suggest that the social and institutional
framework of American industry is inimicable to
the tenets of Ouchi's Theory Z, and this will limit
its adoption by firms in the United States.
Perhaps the most fruitful approach for uncover-
ing tracks in the Japanese management theory jun-
gle will be to build models that reflect the "system"
of Japanese management—the interdependencies of
the political, economic, social, and religious vari-
ables with management practices. What appears to
be most needed is the development of integrated, in-
ternally consistent models that encompass the eval-
uation and the context of Japanese management
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J. Bernard Keys is Professor of Management and Associate

Dean of the Fogelman College of Business and Economics,
Memphis State University.

Thomas R. Miller is Professor and Chairman of the Depart-

ment of Management and Associate Dean, Fogelman College of
Business and Economics, Memphis Slate University.

353