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1. Introduction
During 1980s, Japanese have achieved rapid economic growth. Japan¡¦s GNP is second highest in the world. Many Japanese companies are well known for their outstanding performance and productivity, such as Panasonic and Sony, and etc. The success, which Japanese have obtained, has caused great interests among many Western experts. Subsequently, the term ¡§Japanization¡¨ has been coined to describe ¡§Japanese-style management¡¨.
During 1990s, Japan has been always suffering the severe economic recession. Refer to appendix I, the Japanese unemployment exceeds the UK¡¦s. Today, Japan¡¦s management has been criticised for its centralised, inflexibility administration (Whitehill, A. 1992). There is no such a management style can last forever.
The historic and culture roots of Japan have significant implications to the growth of this management style. Confucian value affects many aspects of modern Japanese-style management (Whitehill, A. 1992). Such as the inner drive for satisfaction through self-development, group spirits, collectivism and loyalty. Confucianism, the foundation of Japanese cultural tradition, underlies the thinking and behaviours of managers (Whitehill 1992). Japanese mangers are deemed to benevolent, paternalistic to subordinates. Nowadays, in Japan, authoritarianism and paternalism is still the dominant essence of managing workers. On opposite to collectivism, individualism represents the main characteristic of Anglo-Saxon culture. Therefore, it is necessary to explore the similarities and differences between these two types of cultures under the context of human resource management.
Essay service for your Implementing Japanese HRM in British companies paper
In this report, Super British Computer (SBC) is selected as a research company for Japanese HRM practice. The company is one of British largest computer manufacturers, has been expending rapidly since its establishment in 1985. Nevertheless, rapid high-tech innovations intensify fierce competition in global computer market. SBC is facing challenges to improve efficiency and performance
2. Sources of Information
Information are obtained through the following sources:
¡P Books (Japanese and British management practices, culture)
¡P Journals
¡P Online Sources
Journals (www.onlinejournal.com)
(www.michionline.org)
(www.tandf.co.uk/journals)
Documents (www.stat.go.jp/english/data/figures)
(www.nli-research.co.jp/eng/resea/econo/eco9802b.html)
The books and journals were mainly acquired from the Pilkington Library, Loughborough University.
3. Relevant Literature
Bamber, G. J., and Lansbury, R. D.(1993), International and Comparative Industrial Relations, Routledge, London.
Berggren, C., and Nomura, M.(1997), The Resilience of Corporate Japan, Paul Chapman Publishing Ltd, London.
Dore, R. (1987), Taking Japan Seriously: A Confucian Perspective On Leading Economic Issues, Athlone Press, London.
Fucini, J. J., and Fucini, S.(1992), Working for the Japanese: Inside Mazda¡¦s American Auto Plant, The Free Press, New York.
Harikuyo, H. and Hook, G. (1998), Japanese Business Management ¡V Restructuring for growth and globalisation, Rouledge, London.
Lorriman, J. and Kenjo, T. (1994), Japan¡¦s Winning Margins-Management, Training, and Education, Oxford University Press, New York.
Nanto, D. (1982), ¡¥Management, Japanese style¡¦, Management by Japanese Practice, Praegar Publisher.
Oliver, N., and Wilkinson, B.(1988), The Japanization of British Industry, Basil Blackwell, UK.
Oliver, n., Delbridge, R. and Lowe, J.(1998), ¡§Japanization on the Shopfloor¡¨, Employee Relations, Vol.20 pp.248-260.
Pascale, R. and Athos, A. (1981), The Art of Japanese Management, Allen Lane, London.
Sasaki, N.(1990), Management and Industrial Structure in Japan, Pergamon, Oxford.
Thurow, L.(1985), The Management Challenge: Japanese Views, Cambridge, London.
Whitehill, A. (1991), Japanese Management ¡V Tradition and transition, Rouledge, London.
4. The Method of Investigation
The research begins by abstracting the essence of various publications on the virtues of Japanese human resource management practices from the late 1980s with emphasis in 1987 until 1990s. The investigation then focuses on the implications of societal and cultural differences between Japan and Britain. Based on the findings of the implications, we shall be able to evaluate the practicability of implementing Japanization in a typical computer corporation in Britain.
5. Findings
Corporate Profile
Incorporated in 1985, Super British Computer (SBC), is a professional high-end computer system manufacturer in the United Kingdom. Most members of SBC¡¦s RD team and management staffs have at least 15 years experience in this field. Currently headquartered in Manchester, the SBC family or more than 10000 employees spreads over five continents with subsidiaries in Netherlands, Germany, Russia, Australia, Malaysia, Mainland China, South Africa, the Middle east, and the United States. With a strong commitment to research and development, SBC has grown rapidly since its establishment. With its proven ability to design, the RD team uses its impressive combination of both advanced technical know-how and experiences to make SBC stand out in the competitive business environment.
The Essence of Japanese-Style Management
Japanese Management style is inseparable from cultural uniqueness. They have been generated very recently as rational systems well adapted to their environment.
In Japanese corporations, especially in manufacturing, like Honda and Nissan, etc. There is a sense of unity, which has been fostered beyond the demarcation between employers and employees. This is "participatory management," unifying the efforts of employers and employees who share the same management ideals. Japanese-style employment practices, which are characterised by the hard (production related ¡V just in time Total Quality Control) and soft (the management of Human resources) aspects ( Oliver and Wilkinson, 1995). Japanese human resource management include six main attributes.
l Lifetime employment ¡Vits ability to foster individual loyalty and encourage the development of firm-specific skills. The main point for employees is cost their own life.
l Enterprise Unionism
l Seniority-based pay ¡V reward employs based on the seniority rather than job performance.
l Job rotation ¡V rotate employees through different function.
l Group-orientation ¡V social relationship are based upon a flame of a group attribute rather than individuals.
l Recruitment ¡V recruit directly from high school and university, etc.
This process was characterised by three conditions: (1) management based on familism, (2) family-owned and -operated enterprise, and (3) maintenance of broad, family-operated network of assets and business connections.
The Japanese style of management is distinct in the fact that they make an effort to make their employees feel that they are a 'part' of the company, and that they make a difference. Some credit has to be given to the employee himself, as he is puts the good of the 'company' first. Japanese leaders are try to creating a harmony environment to subordinates rather than using authoritarianism.
The studies on the pragmatism of transferring this only style have been primarily approaching the western. Japanization management is an important theory in concept of transferring Japanese management to the country. The assay will discuss the different between Japanese and western style in management, so that the company can choose best method to run its business.
Incorporating ¡§Japanization¡¨ in SBC
This section examines the issues involved should SBC implement the practices of Japanese-style management.
Lifetime Employment
An important feature of Japanese employment system is that employees remain with the company for a life-long career, and in exchange for hard work they expect not to be laid off in difficult time (Berggren 1997: 91).
Many Japanese companies provide employees housing, medical treatment in return they get employees loyalty. It could be a strategy for SBC to retain core employees for their sufficient capabilities. However, nowadays, lifetime employment has been criticised for its inflexibility. And Western companies have already called off lifetime employment, instead of life-style employment method, namely, flexible employment (i.e. flexible working hours) and part time job with individualism.
As a computer company, it is not suitable for SBC to adopt lifetime employment pattern. Firstly, those highly professional programmers¡¦ performance cannot always meet SBC¡¦s requirements. Thus, SBC won¡¦t be willing to guarantee them stable incomes and jobs in the long run. Secondly, the model of getting annual salary increase has already been out of date for the management¡¦s perspective. Increasing emphasis on individual performance and accountability has led SBC to introduce a performance based salary system. Thirdly, providing a flexible work environment for the staff is the best solution for the Computer Company. Because the talented staff tend to rapidly float. Retaining them for their contribution is always a dilemma. SBC can provide welfare to motivate employees in order to avoid ¡¥brain drain¡¦, but it does not guarantee lifetime employment. SBC welfare systems are aimed at core employees and mid-manager teams. Only those who are committed to the company and contribute to the development of the company are retained. For instance, the company can provide a saving plan to the staff, such as providing a reasonable monthly stipend in the year. It also offers a comprehensive Medical and Dental Program that provides employees and their families with a wide range of convenient, high-quality health care services.
It may develop a computer purchase program to assist eligible employees in buying a home computer. The company could finance a loan of up to 80% of eligible expenses, without interest. Repayment is made through payroll deductions.
Enterprise Unionism
Enterprise union can make a significant contribution to the moral and productive efficiency of the enterprise (Koike 1988: 259-63). In Japanese industrial relations system, enterprise unions intend to promote spirit of collectivism and close relationship among colleagues. The enterprise unionism has been, in combination with the lifetime employment system, particularly effective in providing ¡¥voice¡¦ for Japanese workers in large companies. In effect, companies may create a harmonious environment in which employees would devote themselves to the companies as much as they can.
However, in the UK, it is argued that the Thatcher governments were able to launch their attacks on the union (and to be successful) precisely because the unions had become discredited and suffered a loss of morale (Eldrige et al 1991). Now the most obvious finding from cross-nation comparisons of labour unions in Britain and Japan is the similar marked decline in union density common to both countries in the 1980s and 1990s (see appendix II). A study of British union efforts to secure their financial bases in the troubled 1980s carried the chastening conclusion that all the unions studied were heavily dependent on employers¡¦ support (Wilman, Morris and Aston 1993: 206-9). As Marsh and Cox observe, British unions are not wealthy bodies (Marsh Cox 1992: 56).
In addition, it is argued that the Japanese unions as poor imitation of ¡¥real¡¦ full-blooded independent unions, incapable of sustaining militant action against their employers. Moreover, the voice effect does not seem to make sense because the proportion of union workers who communicate their problems was low, which means communication methods for union workers are ineffective and inefficient. From above analysis, it is unnecessary for SBC to build own union system. It would be suitable to promote a flexible welfare system to motivate employees individually.
Seniority-Based Pay
This emerged at the same time as lifetime employment to cope with the philosophy of which employees are expected to serve in a company for the whole life, and rewarded for the loyalty to the company, which is a greatly valued virtue in Japan.
Japanese payment system consists of two parts: basic salary and allowances. The peculiarity of the system is found in the basic salary, which is often called nenko-based pay, or ¡¥seniority-based pay¡¦ (Berggren 1997:75). Basic salary is the largest component of the compensation and is made up of seniority pay, position pay and ability pay. The system basically meant that seniority (length of service) and age are given prominence among a range of criteria in determining payment, rather than job performance or competence (Nick 1988: 20). There are several unique aspects in seniority-based pay.
Firstly, mid-career entrants are ranked lower than regular employees in basic pay. Within the context of lifetime employment model, it is understandable that there is little need for mid-career recruitment as most of employees are hired directly from schools and anticipated to remain with the company for a life-long career. However, the concept doesn¡¦t seem to be practicable under SBC¡¦s corporate culture. SBC is always searching for well-experienced and talented mid-career entrants as well as highly potential fresh graduates in the open job market.
Secondly, there is no difference in individual basic salary among skilled, semi-skilled and unskilled production workers if age, length of service and individual assessment results are the same. Regardless of qualification or competency, Japanese companies attempt to fix a value on the person instead of trying to measure the contribution he/she has made to the company. Attempting to affix an intangible human value on an employee beyond his or her economic value may seem humanistic, but it definitely leads to conflicts.
It is true that SBC like to stress that people are its most important resource, but the conception comes against a background of compensation based on tasks and results. Seniority-based pay may not be applicable as its major determinants are completely opposite to the results-oriented criteria carrying out by SBC. In Japan, it is found that current trend towards revaluation of employment and personnel system is rising as well, which includes the growth of merit-based pay(See Appendix III). With only 24.5 percent of companies not planning to introduce merit-based pay, the once prevalent seniority-based pay system appears to be steadily losing ground. These reforms in employment and pay systems are being led by the IT sector. According to industry sources, in recent years the information services industry has become known for its high labor mobility including a rising proportion of mid-career hiring, and progressive work conditions such as flex time (See Appendices IV and V). Currently SBC¡¦s pay scheme is designed essentially on the basis of employees¡¦ performance. Good performance is properly rewarded through a systematic Cross-Department Appraisal System, thus SBC can retain core employees successfully.
Group Orientation
In Japan, the interests of a group are placed over those of an individual. The concept of group focus and cooperativeness in Japanese-style management is manifest. i.e. employees are expected to contribute ideas for improvement of the decision-making processes in management- widespread and slow consultation, a diffusion or blurring of responsibility, but prompt execution of agreed decisions(Dore 1987:12).
Information sharing
Japanese companies see the sharing of experiences and expertise as a vital competitive advantage. They circulate information systematically to everyone to whom it might be useful, not only within the company, but also to their subcontractors and suppliers (Lorriman 1994:89).
The introduction of extensive communication systems, employee involvement schemes, and the harmonization of terms and conditions all have relatively long histories in the UK (Nick 1988:108). SBC faces problems of communication among departments. Informal and extensive direct communication is encouraged at SBC yet not organized enough to achieve effective information sharing.
Consensus decision-making
The Japanese decision-making process is frequently referred to as ¡¥bottom-up¡¦, consensus decision-making process. This process involves the circulation of documents to concerned members of an organization to gain their approval in advance of implementing a proposal. It means that subordinates are likely to have the opportunity to have their views heard and to have some influence.
Basically, the system may best be thought of as a system of reverential enquiry about a superior¡¦s intentions¡¦ (Sethi et al. 1984), a confirmation-authorization process. Japanese style decision-making does not mean that all decisions are made at mid-management levels. It is a fallacy to believe that the authority to give final approval to decisions is delegated to lower levels by those top executives.
As it was stated above, SBC has established open upward communication channels and involvement schemes through which employees are free to express their ideas and even dissatisfaction to as high a level as they feel necessary. The system works successfully not only to increase harmonization of workplace, but also to avoid the improper abuse resulting from absolute power. Due to this fact it would be unnecessary to adopt the Japanese consensus decision-making process.
Recruitment
Whether at company or national level, Japan takes a much more analytical and strategic approach to recruitment than its competitors. One essential element in that strategy is the broad and long-term view taken of the types and sources of recruit required (Lorriman 1994).
The typical characteristic of Japanese management is that they do not look for specialist skills in recruits, but rather basic ability. Their strategy is not what the prospective employees can do at present, but their potential to be multi-skilled and adaptability to long-term change situations. Japanese company recruit directly from school and universities, and providing training throughout employee¡¦s career.
To SBC, the technology competition is intensive in the market, and the computer product life cycle is short. The company needs to produce computer more efficiently than competitors to cope with the increasing demand form PC market. The Japanese long-term employment doesn¡¦t suit SBC shop floor workers recruitment of the company.
First of all, the British labour turnover is higher than Japanese, especially those young graduates. A comparison of the frequency of job changes in Japan and UK is shown in Appendix VI. It is extremely difficult for British Blue-collar workers to make a long-term commitment to the company. They are more individual and market-oriented than Japanese workers.
Second, it wastes time and money to train workers to be multi-skilled in the shop floor. ¡¥So called multi-skills¡¦ means no specific skill, which will mismatch the work enquiry. For example, in assembly area, workers are merely asked to assemble the components of computer; they don¡¦t need to test the performance of computer. Otherwise, it may arise quality problem in production. Generally speaking, workers with specific skills are expected to create value immediately. Rather than exploring the potentialities of employees by SBC, it would be cheaper if employees do it by themselves.
To create competitive strategies for company¡¦s long¡Vterm development, it would be necessary to consider Japanese method - recruit young employees from universities directly, especially for White-Collar employees. University graduates stand for the most promising research strength with its youth and creativity. As the competition to recruit IT and computer science gradates is intense, SBC has to develop various contact with top ranking universities.
Job Rotation
Job rotation refers to lateral transfers of employees between jobs in an organisation. The strength of Japanese company is that knowledge and skill taught to younger employees accumulated inside the company. The job rotation in Japanese company is certain kind of on-the-job training. Through the interaction between experienced employees and young ones, the company¡¦s performance will be improved. This process may cultivate generalists who are useful in any area within the company.
There three main advantage of job rotation. First, employees who rotate accumulate more human capital. Second, firm itself learns more about its employees if it can observe how they perform at the different job. Third, rotation would be a way to motivate employees through job content.
In fact, SBC have already practiced job rotation among its shop floor works. The problem is that frequent rotation will have a negative impact against TQM. It is hard for workers to handle a new job very quickly. In solution, the frequency and scale of job rotation has to be controlled. If the shop floor workers were limited to a couple of jobs, they would become expert at those jobs and the product quality would go up.
However, job rotation would better not be practiced in the core computer RD departments. Computer is highly sophisticated product PC technology is continuously being replaced by new ones. Job rotation would break off the new product research process. In addition, the previous work experience that current employees accumulated may not match the further enquiries of technology development.
Conversely, the managerial people of different departments can benefit a great deal from job rotation. There has been claim that this entail non-specialised career path and that Japanese managers are often perceived as broad generalist but have little specialised expertise. Nevertheless, some prefer to think of them as becoming ¡¥multi-specialists¡¦ as new assignment under the job rotation system come only every 3 to 5 years; enough time is spent on each assignment to develop considerable expertise in various areas (Whitehill 1991). The implication here is that the rate of rotation is crucial in nurturing highly effective leaders and managers in the company.
Naturally, job rotation requires time and costs in equipping employees assigned with the required skills to perform the newly tasks. There are certain risks to be considered under this context. Comparatively, the Japanese sense of duty and loyalty in workplace significantly surpass the British. Therefore, SBC bares the risk of investing training scheme and losing those skilled workers eventually.
6. Conclusion
The conclusion is presented as bullet points for clarity:
¡P SBC has to gain flexibility to control labour cost. It is necessary to reduce the likelihood of long-term employment and by giving both employees and SBC more autonomy in choosing the "right" partners.
¡P It is unnecessary for SBC to build union system.
¡P SBC faces problems of communication among departments. Informal and extensive direct communication is encouraged at SBC not organized enough to achieve effective information sharing.
¡P SBC¡¦s open upward communication channels and involvement schemes work successfully, it would be unnecessary to adopt the Japanese consensus decision-making process.
¡P Because of high turnover of labours, the Japanese long-term employment doesn¡¦t suit SBC shop floor workers recruitment of the company.
¡P To recruit creativity and talented young people with great potentialities, SBC has to develop various contacts with top ranking universities.
¡P If the frequency and scale of job rotation were controlled, the product quality would go up, vice versa.
¡P The rate of rotation is crucial in nurturing highly effective leaders and managers for SBC.
There are some viable principles that could be adapted by SBC; however, the Japanese-style HRM is judged not to be entirely pragmatic to be implemented as a whole.
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