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| How did the Japanese management system
developed?
Why did it work and doesn't work now?
| Summary: This is the
thirteenth part of the
Japanese corporate organization study. I started
off with a perspective on the
Japanese corporate restructuring and
potential scenarios for the future of Japan. Then I
provided a brief outline of the
history of modernization of Japan. I also alluded
to the
transition underway in Japanese business and society.
Then I discussed how the
Japanese employers are reconsidering traditional
compensation systems and replacing them for young
workers with more performance oriented models. After
that I pointed out all the
new trends in employment and labor and how this is
upsetting the traditional corporation. That has led to
redefining of the
employer employee relationship in Japan and I have
argued that
Japan is at crossroads. That is why I
discussed the
case of Pioneer Electric Company that failed in efforts
to become more efficient and profitable because it could
not layoff workers. Subsequently I went into the details
of the
Japanese management system,
how it developed, and why managers behave the way they
do, followed by the
highlights of
Japanese management principles.
On this page you can about the history of the Japanese
management. |
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Lifetime
employment is a pillar of
Japanese society.
Bank loans and
mortgages are granted to lifetime employees in the
assumption that they will never
lose their
jobs, and therefore, will have the ability to
repay. There are also legal hurdles to dismissal. A
firm must stop recruitment, cut overtime, fire part-time
staff, re-organize its labor force, ask for volunteers
to leave, and offer the redundant workers jobs at
affiliates (not necessarily in this order) before they
can be legally sacked.
The
lifetime employment has historical roots and has
been in place since the 1940s. The practices of lifetime
employment and promotion by seniority were then used by
enterprises involved in the war effort to retain their
most capable workers and managers. Eventually, the tacit
promise of a job for life and steady promotion based on
length of service became the twin pillars of corporate
management. But today, as the
baby boom generation is moving, through seniority,
into upper management positions, the recession is
forcing corporations to restructure. The length of the
recession is making it increasing difficult for
companies to simply unload surplus workers on
subsidiaries -- hence the layoffs of virtually
unemployed managers.
Another
related feature of the
Japanese management system is the
seniority-based wage system. It takes away the often
destructive individual competition between employees and
promotes a more
harmonious group relationships in which each
employee works for the benefit of the entire group,
secure in the belief that he will prosper with the group
and that, in due time, he will acquire the benefits that
accrue for long and faithful service. |
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Continued:
How did the Japanese lifetime employment system developed |
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