GROUP 1

CASE STUDY 1

BUI LAN ANH

LY UYEN VAN
DO VIET THANG
LE TUAN DUNG
HO THI YEN VY
NGUYEN THI HAI YEN
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1. What were the triggers of cultural change in Japan during the 1990s? How is
cultural change starting to effect traditional values in Japan?

The triggers of cultural were change in Japan during the 1990s:

 During the 1990s, Japan’s economy began to slow. The prolonged economic slump
forced many Japanese companies to abandon their traditional ways of doing business
like lifetime employment. This caused younger people just entering the workforce to
question whether the loyalty that workers had traditional given companies, and that
had been traditionally reciprocated, made sense. Many younger people concluded
that it no longer made sense to be tied to a single company, that instead it could be
beneficial to take advantage of new opportunities when and where they arose.
 The younger generation, which grew up in a world that was richer, where Western
ideas were beginning to make themselves felt and concluded that loyalty to one
company might be not the best for themselves.
 The difference between the generation born after 1964 and their parents is the change
in the Japanese culture. In addition, Japan’s companies need many younger staff who
have more creative, dynamic than older employees. Moreover, the companies want to
abandon the lifetime employment.
 It led to a change in the traditional values in Japan.
The cultural change starting to effect traditional values in Japan
 Change in perceptions of traditional workplace orientation, lacks of trust
 Younger generation exposed to necessary business culture compromise
 Shift from collectivist to individualist values
 Younger generation uncertainties of lifetime employment system
 All these events led towards individualism.

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2. How might Japan’s changing culture influence the way Japanese businesses
operate in the future? What are the potential implications of such changes for
the Japanese economy?

Japan’s changing culture influence the way Japanese businesses operate in the future:
According to the changing culture of Japan, the new generation, which resisted the
lifetime employment concept of their parents, has pushed for more freedom to move from
company to company. Japanese businesses can’t operate the way they used to due to
Japan’s changing culture. Companies especially have and had to change their human
resource strategies such as the pay schemes or the recruiting system.
Matsushita changed the pay scheme for its 11,000 managers. In the past, the traditional
twice-a-year bonuses had been based almost entirely on seniority, but now Matsushita
said they would be based on performance. The payment according to work performance
will be the best motivation to stimulate employees to the highest efficiency. Beside, Staff
bonus is the way to enjoy the success of the company but not a gift for the older worker.
Gradually abandon its policy of lifetime, eliminating the excessive benefits are not based
on merit and practical contributions. However, the company ready fired in order to
organizational renewal. Specifically, reducing apparatus can easily change and reduce
personnel costs and management costs in a difficult period.
Similarly, the lifetime employment system and the associated perks also disappearing
instead the company accept changes to identify opportunities and face challenges. The
new system will be aim to the younger worker who have a lot of creative idea and power.
Given the opportunity and conditions for youth talents have a greater say in the operation
of the company. There are better incentive to entice and keep the creative youth
component, bold and rapid access to new knowledge in the company.
The potential implications of such changes for the Japanese economy
Such changes can have both beneficial and harmful effects on Japanese economy.
Focusing on individualism brings a high level of entrepreneurial activity with it, which
involves the opportunity for new products and new ways of doing business. These can

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help the economic growth and pulling out the economic slump. In otherwise, this trend
might be bad for firms. For instance, when a worker frequently switches workplaces, he
might lack the company-specific knowledge and thus might not be so valuable for a
company. Likewise, the high fluctuation makes it also very difficult to build a team
within an organization to perform collective tasks. Therefore, these factors may influence
the highs and lows of Japan’s economy in a more direct way.
3. How did traditional Japanese culture benefit Matsushita during the 1950s-
1980s? Did traditional values become more of a liability during the 1990s and
early 2000s? How so?

Traditional Japanese culture benefit Matsushita during the 1950s-1980s

Matsushita was established in 1920 and become a giant consumer electronics company in
Japan within the next decades. Traditional Japanese culture is based on strong group
identification, reciprocal obligations, and loyalty to the company. With this sort of culture
it was possible for Matsushita to hire employees, who worked hard for the greater good
of the company. On the other hand Matsushita was mutual loyal to their workers and
provided them with a wide range of benefits. After the World War II people haven’t had
as great prospects as they had a few years later thus they were thankful for every job they
could get and committed to it. Once hired they would spend the rest of their lives
working for the same company, which supported to develop unique firm-specific
knowledge. As a result Matsushita was at the fore front of the rise of Japan to the status
of major economic power.
- Traditional Japanese culture was important to Matsushita’s success from the 1950s
to the 1980s. Group identification, reciprocal obligations, and loyalty to the
company meant that Matsushita took care of its employees from the “cradle to the
grave.” Matsushita take care of its employees for life providing benefits such as
subsidized housing and retirement bonuses in exchange for loyalty and hard work.
Employees worked for the greater good of Matsushita and in return, Matsushita
bestowed its “blessings” on its employees. .

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- Matsushita’s employees hard working to contribute for the development of

company.
- Japan’s traditional culture helps Matsushita become a major economic power
during the post war years and through the 1980s
- Traditional culture of Japan during the period 1950-1980 suffered dominated by
Confucian values. This offers the advantage that the structure, organization
manner clearly manageable. Matsushita successes by saving time to arrange,
structure.
Traditional values become more of a liability during the 1990s and early 2000s
These traditional values became a liability during the 1990s and early 2000s, when, after
several years of poor performance, Matsushita began to change. Many other companies
had already shifted away from the traditional business model to a model with a greater
emphasis on individual performance.
- The compensation based almost entirely on seniority that makes have problems
such as growth in manufacturing equipment slowdown and rising costs
- Traditional values became a liability, the new generation did not show interest in
the traditional values
- Apparatus cumbersome, inflexible and uncreative were losing gradually
competitive advantage
4. What is Matsushita trying to achieve with human resource changes it has
announced? What are the impediments to successfully implementing these
changes? What are the implications for Matsushita if (a) the changes are
made quickly or (b) it takes years or even decades to fully implement the
changes? With its human resource changes Matsushita was trying to enhance
its performance by offering a traditional option and making the company
more attractive to new employees with its offers of a high start salary but no
retirement bonus and no subsidized services.

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Matsushita’s changes to its human resource policy are an effort to essentially keep pace
with the modern workplace. However, while individual performance now takes
precedence over seniority for compensation, the company is implementing its changes
slowly. Matsushita has designed a three-tiered employment option that includes a choice
of subsidized company housing and a retirement bonus, or a higher salary and no
subsidized services, or some combination of these. Many students may suggest that the
changes are not particularly popular. Just 3 percent of new recruits chose the higher
salary and no benefits option, while over 40 percent took the combination package. This
trend may become problematic for Matsushita which is now dealing with an aging
workforce.
Matsushita started to make changes in human resource practices in 2000. They offered
the choice of three employment options with differences in salaries, benefits and
commitments. With this choice they wanted employees to believe in democratization, to
encourage individuality, to take initiative and to seek risks.
The impediments to successfully implementing these changes: Difficulties in the
cancellation of commitments on mode lifelong work for employees who hired under the
traditional method. The costs for the change is too expensive.

The implications for Matsushita if Matsushita changes its system quickly

Advantage Disadvantage
Having the opportunity to quickly Negative impact on the psychology of the
overcome the difficulties to take workers (because if it happened too quickly, it
the success would create a shock to the workers and they
could not adapt and accept the change.)
Attracting young human resources Strong opposition from the ruling class and senior
who are innovative and dynamic. staff to protect their interests. (The older
They alternative generation aging employees in the company don't want the change
staff present passive. to meet the new requirements of the job.)
Costly

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(When the company pays salary by work

performance, they need to build a clear
measurement system. Besides that, recruiting with
3 modes selection, the company will build 3
system payment salaries. In addition, the
company will face opposition by the staffs who
worked long years.)

The implications for Matsushita if it takes years or even decades to fully

implement the changes

Advantage Disadvantage
The company has plenty of time to change Costly
(firstly, have an impact for the employees change (Because the
Ideas and cooperate with companies to change. Secondly, have company have to do
time to train employees familiar with the methods of new the change in the
operation, new assessment procedures to ensure the job. long time)
Thirdly, have time to experiment, change adjustment policies.
Finally, they have chances to recruit and train young workers to
replace employees who do not perform well)

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5. What does the Matsushita case teach you about the relationship between
societal culture and business success?
Relationship between societal culture and business success in Matsushita

Societal culture Business impact

Traditional Japanese post war culture Confucian values in workplace
Westernized culture Achievement of organizational goal
Individualism Changes to HR strategies

 Societal culture and business success are interdependent. We have seen that
Matsushita had and has to consider the societal culture in order to gain greater or even
any business success. As a result any company needs always to regard the societal culture
for the purpose of acquiring and maintaining business success and needs to respond in an
appropriate time to any changes of culture.
Societal culture and business culture are strongly intertwined. A society’s culture has a
direct impact in a company’s culture. Social cultural impact on business success through
business culture Business success when we change in enterprises culture suitable with the
leaders and staffs. In order to succeed, the managing parties should anticipate changes in
society which lead to social-cultural changes.

Every culture experience modifications should be applied slowly and also may not be
changed completely. So, the staff also had time to adapt to change, the employees will
probably become another cessation of work and employees are mainly conductive to a
company’s success. In this case the change from Confucian values to western values, and
the company has to adapt its working conditions.

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