In the decades after the second World War the Japanese economy experienced
phenomenal growth. Western academics and press have often praised
the Japanese management model as a major success factor for the “Japanese
miracle”. Many have called for the adoption of Japanese practices in
Western firms in order to remain competitive against the Far-Eastern counterparts.
But in the 1990s the burst of the bubble economy and the resulting recession
have lead to a change in the view on Japanese management practices.
Many now see the Japanese model as outdated and ready for a thorough
overhaul.
This essay explores in how far the problems and structural changes that Japan
experienced over the last ten to fifteen years have necessitated a radical
change in her management practices. After briefly introducing the Japanese
management model in the second section, several social and economic developments
are discussed that might have a lasting impact in the management
practices. The fourth section examines and explains observations made
about the actual effect on Japanese management in the face of these developments.
Finally, the essay concludes that, while incremental adjustments are
taking place, rather than a radical change or, indeed, a westernisation of
Japanese management, a more fundamental rethinking might take place in
the future.
Table of Contents
1. Introduction
2. The Japanese Management Model
3. A Changing Context for Japanese Management in the 1990s
4. Radical Change or Incremental Adjustment?
5. Conclusion
Objectives and Themes
This essay explores whether the structural problems and economic crises Japan faced during the 1990s have necessitated a radical overhaul of its traditional management practices or if the system is capable of surviving through incremental adjustments.
- The defining characteristics of the Japanese management model, specifically the core-periphery labour structure.
- The impact of long-term economic shifts, demographic changes, and the bursting of the "bubble economy".
- The role of the keiretsu business networks in maintaining traditional management practices.
- The debate between proponents of radical "westernization" and those observing slow, path-dependent modification.
Excerpt from the Book
2. THE JAPANESE MANAGEMENT MODEL
A large amount of literature has been written on the subject of Japanese management, which oftentimes does not capture the complexity of the subject (Handy et al, 1988). On the other hand one can observe a wide array of concepts being linked to the Japanese system of management. These include general management practices like long-term planning and consensus decision-making, manufacturing systems like JIT and TQC, and human resource management (HRM) practices like life-time employment and seniority-based wages (Keys et al, 1994).
As is often done in current literature, in this essay the Japanese management model will be understood as a set of HRM practices (Dedoussis, 2001). The key elements of the model upon which many authors agree include a system of wages and promotions based on seniority, enterprise-level labour unions, long-term planning, a bottom-up decision-making approach, recruitment from within the firm, and a range of company incentives like bonuses (Handy et al, 1988). The most prominent feature of Japanese-style management, however, is lifetime employment. Lifetime employment principally refers to the recruitment of graduates directly from university which will then be retained until their retirement at the age of 55 or 60 (Sullivan & Peterson, 1991). The individual elements of this management system are coherent in that they are interrelated and build upon each other, at least in principal: for example, since employees must have less fear of becoming redundant, organising industry level unions is not thought necessary (Fingleton, 1995). This, in turn, reduces union pressure on firms.
Summary of Chapters
1. Introduction: This chapter provides an overview of the "Japanese miracle," the subsequent economic downturn in the 1990s, and the central research question regarding the necessity of a radical management overhaul.
2. The Japanese Management Model: This section defines the core elements of Japanese management, emphasizing lifetime employment and the dual labor market structure within keiretsu groupings.
3. A Changing Context for Japanese Management in the 1990s: This chapter analyzes the external pressures faced by Japan, including an aging population, shifting cultural values, and the post-bubble economic depression.
4. Radical Change or Incremental Adjustment?: This chapter evaluates the current debate on whether Japanese firms are undergoing a westernization of practices or if they are successfully utilizing internal mechanisms to preserve the status quo.
5. Conclusion: The final chapter summarizes that while the Japanese model has not been fundamentally dismantled, future survival depends on whether the keiretsu system can continue to absorb economic shocks.
Keywords
Japanese Management Model, Lifetime Employment, Seniority System, Keiretsu, Economic Crisis, 1990s, Structural Change, HRM Practices, Core-Periphery, Westernization, Industrial Relations, Demographic Shift, Japan, Labour Market, Corporate Governance
Frequently Asked Questions
What is the fundamental focus of this academic work?
The work examines how the structural and economic challenges experienced by Japan in the 1990s have impacted and potentially transformed the traditional Japanese management model.
Which thematic areas are prioritized in the analysis?
The essay centers on human resource management, the specific role of the keiretsu in protecting the core workforce, and the tension between traditional Japanese values and Western efficiency-oriented management methods.
What is the primary research objective?
The objective is to determine if the changes seen in Japanese firms represent a transition toward a radical, Western-style management model or if they remain incremental adjustments that allow the core principles to endure.
Which scientific methodology is applied?
The author uses a literature-based analysis, synthesizing secondary research, industrial reports, and management theory to interpret the ongoing debate about the nature of change in Japan.
What topics are discussed in the main body?
The main body covers the definition of the management model, the demographic and economic crises of the 1990s, and an assessment of current reactive versus radical management shifts.
Which keywords characterize this essay?
Key terms include Lifetime Employment, Keiretsu, Core-Periphery, Seniority System, and Structural Adjustment.
How does the "two-spheres" view explain the survival of lifetime employment?
The "two-spheres" view posits that the system remains stable because firms can offload economic volatility onto "peripheral" workers, thereby shielding the "core" workforce from the need for radical restructuring.
Why are the keiretsu considered essential to the management model?
The keiretsu function as a shock-absorber, allowing for the transfer of employees between member firms and providing the structural flexibility required to maintain long-term employment practices despite external market pressures.
What does the author conclude about the future of the Japanese model?
The author concludes that while incremental modifications have been successful so far, a more fundamental rethinking of management may be inevitable if the economy does not recover and structural pressures persist.
- Citation du texte
- Karl-Guenther Illing (Auteur), 2003, The Effect of Japan's Structural Difficulties in the 1990s on the Japanese Management Model, Munich, GRIN Verlag, https://www.grin.com/document/19601
