This paper discusses the changes in the Japanese corproate culture that has come about because of major external changes in the society as a whole.
Japanese Corporate Culture Table of Contents1.0 Introduction 2.0 Procedure 3.0 Findings 3.1 Changing social culture. 3.2 Business Culture in Japan 3.3 Why change is needed 3.4 What is Japan and her corporations doing to develop and change 4.0 Conclusion 5.0 Bibliography Japanese Business & Culture An investigation Japanese corporate culture, its trends and changes. 1.0 IntroductionThis report is based around the following quote: “Japan’s corporate culture is the product of uniquely Japanese social and historical influences, so deeply rooted as to easily repel outside influences. Bur Japanese corporations need to change their basic goals….” This report will discuss nature of corporate culture in Japan, and why change is needed. 3.0 Findings The Japanese business culture has been described by Beedham as a culture that acts like a clan, in that there is a large amount of authority given to the man at the top, and in the commitment that is shown by the people around him, Beedham points out that this can be evident in the way that their car factories, investment banks and government ministries are ran. This clan-like-behavior has the effect of making decision making painfully slow, with compromises having to be met in all directions, but this is starting to change, as the people of Japan are starting to change and have different priorities. These changes can be put down to several factors that are changing in Japanese society as a whole. 3.1 Changing social culture. The increasing and speeding up of urbanization is one way in which corporate culture is being changed. Because of this urbanization there is less commitment to groups as people become more individual and have their own priority in life. Marriage and family ties are also starting to loosen. Links between children, parents and grandparents are not the same as they were ten years ago. The greatest impact on people’s commitment to their work is money. As the Japanese become richer, they are starting to see that there is a lot more to just working every hour possible. With this extra money they have been given the opportunity to make friends out of the workplace and focus on other activities such as clubbing, music, football etc. and they are seeing spare time differently. But this is only taking place on the outside edge of Japanese society and the core of Japan which includes the big businesses, are still operating in the traditional way of life and it has been estimated that it will take a further fifty years before a new way of living and lifestyle becomes the norm. (Beedham) 3.2 Business Culture in Japan Business Culture is said to be the product of the mind and is often described as: “how we do things round here”. (source unknown) Before describing the corporate culture within Japan it is useful to understand the corporate culture in the West as a comparison. In the West, business is simply about profit seeking. Its Managers and workers are there to increase profit for the owners of a corporation. The employees are evaluated by how much of a contribution they make towards the generating of this profit. The Western corporation is designed like a profit machine and operated like a profit machine. Within the Japanese business world, the corporation is not seen as been there for just profit. Profit is important, but it is not the only reason for the company’s existence, but involves people and their future. The community factor is as important, and sometimes more important than, short term profitability. The Japanese business people see their company as a community; this community has within in it people who happen to live together by working together. The company is a living society which needs profit as sustenance for growth. Western Europe and China, has seen many revolutions throughout their history in areas such as their religions, politics, industry and culture. When these revolutions occur new system of thinking replaced the old, sometimes these changes are forced upon the population. It was not so in Japan, where new system of thought, whether made internally or introduced from abroad, was added to or mixed with what was the current ideal. Because of this accumulation and mixing of ideas, the Japanese mind has become more complex than the so called “enlightened” cosmopolitan Western mind, and retains the archaic, medieval, modern and post-modern views. An example of the almost schizophrenic thinking of a typical business man from Japan could be, an English speaking business manager of an internationally operating company may behave like a rice growing villager in his board room discussions, then the same person behaves like a Samurai clansman in the competitive market, and like a devoted Buddhist in social functions and like a scientist when he is in search of a solution for his business problems. At the core of the Japanese mind there is a basic notion of ANIMISM, this is the belief that everything has a spirit which is the nature-worshipping religion of Shintoism. Confucianism, Taoism and other schools of thought which came from China are added on top of Shintoism, which is still a powerful element of the Japanese culture and determines many aspects of the social and organizational behaviors. Chinese and Korean scholars and immigrants brought in other types of thinking into Japan and those new ideas were mixed with the indigenous ideals which has resulted in a hybrid strain of philosophy, religion and social ethics Then Buddhism which was refined in China was a further addition to the Japanese character. The final layer added the Japanese character was added through globalization, and occurred in the middle of the nineteenth century and again in 1945. After the American occupation in 1945, to think like Europeans was strongly encouraged. This was accepted but at the same time they retained the “Japanese spirit”. (source: unknown, Internet) 3.3 Why change is needed Because of the complex way in which the Japanese thought process works and the way that the corporate culture works is not seen as the easiest country to do business with. Japan protects its markets and its ideals. With the economic bubble bursting and the emergence of the China as a economic force change is needed to get the economy running at the levels it once enjoyed. As well as China there are the other Tiger economies in the Pacific that are emerging and becoming big players. There are calls for the country to go through further economic deregulation. Shoichiro Toyoda is one of the people calling for this and states: ‘We have to reform and cut our high costs if we are to compete in the future.’ He also says that Japanese companies should become more global, and that it is necessary for companies both to compete and co-operate in international markets and to become more outward looking, (FT 96 Dec 05 page 6) Japan needs to change from a manufacturing-led to consumer-driven economy; from an over-regulated bureaucracy to a more open market; and from a culture of corporate rigidity to one of entrepreneurial freedom. Change has to occur but as long as each section of society continues to benefit from the current situation, there will continue to be no foreseeable movement for change, this lack of development will bring about the end of Japan as a economic power or at least take away the influence it has on the world. However this change cannot just be a gradual change because if it is not quicker in the next 10 years than it was in the previous five, it is highly likely that it will not be able to get back its old position and instead will go into decline. (FT 96 Dec 02 page 20) 3.4 What is Japan and her corporations doing to develop and change At the moment there is a definite change in policy and a deliberate attempt at change within the corporations and this is helped by political changes too. An example of this is seen in the appointment of Taizo Nishimuro as the president of Toshiba. There are three reasons why this appointment was seen as against the norm. The first was that he had spent 14 years overseas. This is seen as a long time and not the norm for a future corporate, because in Japan, head office jobs are seen as the quickest and best way to get to the top echelons . Secondly Mr Nishimuro was not next in line to the job as typically happens within Japanese corporations. There were another nine executives ahead of him, this was another big change in a corporate culture where seniority matters. And finally Nishimuro was not from Toshiba’s heavy engineering division but is an electronics expert, which is a big change for this particular corporation and is another indication of how much they want to change. (FT 96 Dec 05 page 6) Another corporation that is changing the way it is run forever is Canon, who supplied computer printer, copier and cameras. There internal changes have been in action for a longer period than most Japanese corporations. Their changes have been taken place over the last decade. It has given more management control to its foreign based subsidiaries, hired a greater proportion of foreign staff and management, and increased research and development abroad, and this a massive move from what is seen as the ‘norm’ in Japan. This change to Canon’s culture and operations became even more radical during the summer of ’96. During this period, world responsibility for a series of key R&D projects was switched away from its headquarters in Tokyo to the US, France and Britain. Since this there have been more Japanese corporation follow this lead. (FT 96 Nov 18 page 14) It is generally accepted that because of the structure and culture within Japanese corporations that their R&D is not as effective as it could be, as everything is from the grass roots up. The people at the bottom of the chain are asked and checked and so on. This is the reason behind these changes. The Prime Minister of Japan, Ryutaro Hashimoto, has said that he wants to put in place far-reaching financial reforms. A great surprise to all was the idea that the Ministry of Finance, which is the very heart of Japan’s bureaucratic oligarchy, should be broken up. With the policy ideas of Ryutaro Hashimoto concerning deregulation, there has seen a mobile phone boom, a lowering in air fares and the establishment of Japan’s first proper supermarkets In the corporate sector, cross-shareholdings are to be slowly dissolved, and a big change is in the perception that corporation have on profit. Companies are now starting to set targets for their financial returns. (FT 96 Dec 02 page 20) 4.0 Conclusion The Japanese business culture is very different from that in western countries and China and this is a consequence of their history. Japan has never been invaded but different ideologies, religions and ways of thinking have be interwoven into the Japanese character. There is however change occurring within the Japanese social structure. This is mainly down to the speeding up of urbanization and this has the knock on effect of changing the corporate culture slightly Japanese corporations are not seen as been there for just profit. Profit is important, but it is not the only reason for the company’s existence, but involves people and their future. This is however changing with corporations starting to set financial targets for themselves and cut costs. Ways in which the Japanese corporate culture is starting to change can be found in the way that promotions are decided. In the past seniority meant everything and no some positions are given on merit. Also, management positions are starting to be taken up by foreigners, as well as R&D relocation outside Japan. Japanese politics are also helping in the change of culture. Deregulation and liberalization promote a more dynamic organization culture and structure but these developments need backing up with further proposals to deregulate and promote entrepreneurship 5.0 Bibliography Brian Beedham, Tomorrow’s Japan, The Economist, July 13th 1996 Various Internet article with no title or author. FT 96 Dec 05 page 6/ Survey – Japanese Industry: Routes to the top FT 96 Dec 02 page 20/ Lex Column: Japan FT 96 Nov 18 page 14/ Management: Time to pull back the screen