Japan

Group 2 Anish Thomas Rini Rajan Lisa Thomas

PESTEL ANALYSIS
Political e-governance initiatives - greater transparency to Japanese politics and improve political administration diplomatic row with North Korea - provocative actions have led to the destabilization of peace in the region. Economic The second country after China with official foreign reserves exceeding $1tn. Earthquake and tsunami had a detrimental effect on business and economy, wiped out towns and industrial zones that supplied essential components. The supply disruption

Social Government to alleviate the declining birth rate. The population that contributes to the labor force (1564 years) has steadily - shortage of both labor and industrial productivity. Technological Government expenditure on R&D has increased by around 36% from $128bn in 2001 to $174bn in 2010. Faces challenges from China and India, both of which have R&D, low costs and skilled labor

Environmental Registered with the UN its intention to slash greenhouse gas emissions by 25% from 1990 levels by 2020. One of the largest producers of CO2 in the world. Legal In December 2010, the country announced plans to reduce its effective corporation tax rate from 40.9% to around 36%. World Bank's 2011 Doing Business Report- getting a business up and takes Min.8 procedures and 23 days, which is both a longer period of time and greater level of complexity than the OECD avg. of 5.6 procedures and 13.8 days.

 On a trip to Japan the president of a large American electrical appliances company visited one of the factories of a leading Japanese manufacturer. When he was shown the production line, he was utterly amazed at the workers absorption in their simple task and the diligence and precision of the women workers. He was so impressed, and believed it so important to analyze their motivation, that the president extended his stay in Japan. Thinking it might explain the difference in labor productivity between Americans and Japanese, he tried hard to discover the key to their work attitudes. He observed the same women as they worked on the assembly line for several days, until he finally decided that the way these women approach their work reflect something of japans traditional spirit. They appear to work in exactly the same spirit as they might perform traditional arts, like flowers arranging or tea ceremony. These girls are not just mindlessly moving their hands as they work; they seem to find some delicate diversity in apparently repetitive and simple functions. As a result, their skills improve dramatically.

Organizational Commitment
There are two schools of thought about commitment. The from control to commitment school, was led by Walton (1985), who saw commitment strategy as a more rewarding approach to human resource management, in contrast to the traditional control strategy. Japanese/excellence school, is represented by writers such as Pascale and Athos (1981) and Peters and Waterman (1982), who looked at the Japanese model and related the achievement of excellence to getting the wholehearted commitment of the workforce to the organization.

Ethnocentric
Atsushi Toyoshima Managing Director of Toyota Kirloskar Motor Pvt. Ltd(TKM). Shinzo Nakanishi Managing Director and CEO of Maruti Suzuki India Ltd. Tatsuya Shinkai Chairman of Suzuki Motorcycle India Private Limited Masaru Tamagawa Managing Director, Sony India

Conventional Japanese HRM Systems (CJHRMS)

Seniority Wage System (SWS) Lifetime Employment Systems (LES) Seniority-based Promotion System

Seniority Wage System (SWS)

SWS that were widely practiced from the 1970s Rewarded employees on the basis of cumulative on-the-job experience, and internal training over the years that are strongly related to their tenure. The practice aimed to secure and retain skilled labor. SWS leads to high fixed labor cost that hurts capital gains. It also results in a stark wage difference that could de-motivate younger Japanese workforce

Lifetime Employment Systems (LES)

Considering the scarcity of skilled labor and intensive poaching during the industrial revolution, LES was strategically emphasized in the 1970s to gain full employee commitment. LES that promotes a lifelong employeremployee relationship via the integration of employer-employee goals also promotes employee motivation and stable employment till mandatory retirement age.

Seniority-based Promotion System

Seniority promotion is a form of recognition of achievement based on accumulated job experience and tenure that was once effective in motivating employees. It takes seven to ten years of employment in the same firm for the first promotion, without much difference in authority and income. Owing to limited real opportunities for promotion, management titles empty of substance were eventually created only to backfire as it resulted in steeper hierarchy structure that hindered organizational effectiveness. Moreover, the payroll of senior employees is high, and thus seniority promotion further jeopardizes profit.

Current Scenario
External forces in Japan: High fixed labor cost Economic downturn and competitive business environment Increased importance of profitability as a measure of corporate performance Changing work values of younger workforce Change of management values to securing and retaining highly-competent employees

Criticisms to CJHRMS
CJHRMS are simply incompatible with a globalized future. There is tendency with Japanese firms to lose highly-competent staff to other multinational corporations (MNCs) due to less attractive SWS. Cornered by various changes such as globalization, prolonged recession, high fixed labor cost and the changing work values, Japanese firms have begun to recognize the need to modify CJHRMS to secure a highly-competent pool of workforce for sustaining a competitive edge.

Comparing Indian and Japanese Culture

Power distance
India
Score - 77 Score - 54

Japan

Power is distributed more unequally Conscious

of

their

hierarchical

Accepted by the population as a position in any social setting cultural norm Social inequality is accepted However, it is not as hierarchical as India Education system : everybody is

Leaders are expected to be decisive There is no one top guy and self-sufficient Subordinates should know there born equal and anyone can get ahead place and not question their and become anything if works hard enough

superiors

Individualism

India: 48 and Japan: 46

Both are collectivist society

Being a part of a group is highly valued Stronger acceptance of fate, tending to cause low stress levels However, Japan is not as collectivistic as India Society does not have extended family system Japanese are experienced as collectivistic by Western standards and experienced as individualistic by Asian standards More private and reserved than Indians

Masculinity / Femininity
India
Score 56

Japan Score 95 Employees are most motivated when they are fighting in a winning Drive for excellence

Masculine but more feminine than One of the most masculine societies
Japan Quality of life is the sign of success

Standing out from the crowd is not team

admirable Emphasize the quality of the whole Perfection in every aspect of life life Organizations competitive are not very

Uncertainty avoidance
India Score 40 Score 92 of the most uncertainty Japan

In comparison to Japan, India is very One low

avoiding countries

Uncertain situations and conditions Japan is constantly threatened by are viewed as part of the job More tolerant and flexible natural disasters Lot of time and effort is put into

Population is open to unstructured feasibility studies

ideas and situations

Detailed facts and figures before

Changes are too difficult

Have fewer rules and regulations taking any decision with which to attempt control

Long term orientation

India 61 and Japan 80 Indias LTO lesser when compared to Japan Both countries have high adaption of tradition to the modern context

High savings ratio driven by thrift

Patience and perseverance toward slow results Concern with respecting the demand of virtue

General business challenges

Declining labor force Comparatively poor education and healthcare performance High wage costs: Declining technical workforce Change in legal policies leads to unpredictable situations Violation of human rights, Weak prosecution system, Declining judicial reviews Strong knowledge base

Important points which an Indian Manager should keep in mind

Language Patience and politeness Japan is not as collectivistic Private and reserved than Indians Japan is not as Hierarchical as India Love to compete and win Drive for excellence and perfection High need for uncertainty avoidance Highly long term oriented people

Need for global mindset Overcome the cultural differences Being open minded Comfort with diversity Cultural integration Interest in history, geography and national phenomena Integrity in both ethical and intellectual matters Abstract thinking is essential Risk taking capability Cultural sensitivity