A PROJECT REPORT ON MANAGERIAL CONCEPT AND

PRACTICES IN JAPANESE MANGEMENT

SUBMITTED TOWARDS PARTIAL FULFILLMENT OF

PGDM PROGRAM
Academic Session 2018-2020

Submitted By
OINDRILA DASGUPTA
Roll No: 18011
CALCUTTA BUSINESS SCHOOL

Submitted to
Prof. Shekhar Chaudhuri
Table of Contents

S.no. Particulars Page no.

1 Introduction & History about Japanese management 2

2 Findings &story of Japanese management 3

3 Long term survival and commitment 4

4 Porter’s diamond model and model of Japanese 5

management

5 SWOT analysis 6-

6 Management practices and style 7-8

7 Management philosophy, ownership structure, HR, 9-11

Operation and corporate structure

8 Techniques/key terms in Japanese management 12-14

9 Conclusion 15
10 References 16

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INTRODUCTION ABOUT JAPANESE MANAGEMENT
Japanese management is called Omikoshi management. Omikoshi refers to the young men who carry the
portable shrine in festival parades. . Today, Japan is the most influential economy in Asia and the second
largest economy in the world. Japanese consumers are among the richest in the world, and the Japanese
market still provides profitable investment opportunities. Japanese are perfectionist. Japanese companies
are known for their customer orientation, highly motivated and their high-quality products. Japanese
management has the responsibility to create a harmonious environment in which each member of the
group effectively contributes to group goals. People were very friendly and supportive, the enthusiasm of
employees for their job and their company was enormously high, and there was real team spirit.
Not only are the Japanese able to adopt Western ideas and techniques without problems but they also
maintain a unique perspective of the world. It examines the cultural foundations of Japanese management
and explains the most famous Japanese business concepts, such as kaizen, just in time, and lifetime
employment.

Japanese management started

Numerous books and articles have be written on the Japanese management systems. Abegglen (1958) was
one of the first to bring Japanese management to the attention of a large Western audience, and was follow
by Yoshino (1968), Cole (1971) and Dore (1973) who, through in-depth case descriptions, laid the
groundwork for the avalanche of writings to follow. These classic studies identified and described those
crucial differences in management style and practice that were identify in later studies as critical to
Japanese success.

HISTORY OF JAPANESE MANAGEMENT

 It was first mentioned in “The Art of Japanese Management” by Richard Pascals & Anthony
authors in 1981.
 By creating an export market, Japan was able to structurally transform its economy, thereby
granting it access to the technology it needed to develop.
Japan’s culture developed late in Asian terms and was much influence by China and later the west.
 Early in Japan’s history, ruling elite of powerful clans controlled society.
 The most powerful emerged as a kingly line and later as the imperial family in Yamato modern
Nara Prefecture or possibly in Kyushu in the third century A.D.
 Japan rebuilt itself based on a new and earnest desire for peaceful development, becoming an
economic superpower in 2nd half of the 20th century.

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FINDINGS

Japanese management thought evolved in a developing nation and primarily in the manufacturing sector.
The scientific management paradigm was dominant from the start of modern industry in Japan and its
endurance is explained by its profound embeddedness in the Japanese business system. The need for
change (e.g. in strategy) is identified, but as Japan has proved reluctant in the past to shift away from the
LEARN FROM THE BEST

Always look at someone better .the problem is when you get to the top; you have to become more creative
–this is Japan’s challenges. Shortcomings of japan practices are lack of decisiveness, they are not
transparent .decisions sometimes take too long and they lose their timing. Lifetime employment collective
decision-making collective responsibility slow evaluation and promotion implicit control mechanisms
non-specialized career path holistic concern for employee as a person. Efficiency concept, effecting
reforms may remain difficult in the future as well.

STORY OF JAPANESE MANAGEMENT

• The culture of Japanese Management is very famous in the west.

• Flagships of the Japanese economy provide their workers with excellent salaries and working
conditions and secure employment.
• One of the prominent features of Japanese Management is the practice of permanent employment
(Shushin Koyo).
• Employees are not dismissed thereafter on any grounds, except for specific breaches of ethics.
• Permanent employees are hired as generalists, not as specialists for specific positions.
• A new worker is not hired because of any special skill or experience, rather the individual’s
intelligence, educational background, and personal attitudes and attributes are closely examined.
• On entering a Japanese corporation, the new employee will train from six to twelve months in each of
the firm’s major offices or divisions.
• Thus, within a few years a young employee will know every facet of company operations, knowledge
that allows companies to be more productive.
• Another unique aspect of Japanese Management is the system of promotion and reward.
• An important criterion is Seniority.
• Seniority is determined by the year an employee’s class enters the company

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DEMOGRAPHIC SEGMENT

Japan, an island nation in East Asia, is an archipelago located east of the Korean peninsula. It has an area
of 145,882 square miles. Japan is border by the Pacific Ocean on the north and east, by the Philippine Sea
and the East China Sea to the south, and by the Sea of Japan on the west.

LONG TERM SURVIVAL AND COMMITMENT

 Japanese tends to favor the development of long-term relationships. They spend much more time
up front with a potential customer or supplier before making a commitment. Japanese companies
avoid layoffs.
 Communication plaza concept –though this is fading in Japan, employee meet with the executive
informally over lunch or dinner to listen to each other.
 Japanese firm is organized for the employee .it is a more human orientation. Japanese mix with
employee and customers .An insight in Japanese culture…Japanese neighborhoods are less
stratified in terms of economic class. CEOs may live next door to engineer and factory workers.
 Japanese are world class at copying and improving upon an idea, but would be smart to develop
their creativity.in japan teamwork means to help others; here it means functional maximization,
that is to improve results.
 Profit is the result of the pursuit of quality –as quality improves, costs go down. Quality includes
products, services, machines, layout, policy, planning and organization.

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PORTER’S DIAMOND MODEL

Factor condition: high skilled labor force, large number of engineers, highly efficient production process.

Demand condition: Japan’s knowledge buyers made that industry to innovate and grow tremendously.
The Japanese market was very demanding because of the written language.

Related and supporting industries: presence of large number competitive and supporting industries
.domestic suppliers those arte strong global players themselves.

Firm strategy, structure and rivalry: Japan has high priced land and so its factory space is at a premium.
This lead to just in time inventory techniques. Japanese firm cannot have a lot of stock taking up space,
so to cope with the potential of not have goods around when they need it.

MODEL OF JAPANESE MANAGEMENT

 Hatvany and Pucik (1981) offer a model of Japanese

Product management in which they define three interrelated
strategies.
 The authors assert that these general strategies are
Organisa
Process translated into specific management techniques.
tion
 Job rotation and slow promotion
 Evaluation of attributes and behavior
 Emphasis on work groups
leadershi commit  Open communication
p ment  Consultative decision-making and concern for employee.

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PHILOSOPHY OF JAPANESE MANAGEMENT
 Fully satisfaction of customer’s needs.
 Achieve employee’s fulfillment.
 Slow and careful way of implementing.
 Willingness to any activity if necessary.
 Zero-defect theory “rom was not built in a day “approach.

KAIZEN MODEL

Kaizen is the most prominent Japanese management practice. It refers to continuous improvement and the
idea that any managerial process can be perfected. Kaizen is not so much a detailed management practice
but a philosophy that should be lived and implemented by every member of a Japanese firm, from the top
management to the shop floor. The idea of kaizen does not include radical changes, such as job cuts, but
mostly consists of small changes, often on a daily basis, and is based on constant communication with
other group members

SWOT ANALYSIS

Opportunities Threats
Strengths Weakness

-closer -slow promotion -prefering -scope of

relationships system. personality to company.
-non-competition -high training education. -nature of work.
among costs. -challenging in -cultural
employees. -no motivation. time of crisis. differences.
-consensus -tom bata 's
decision making. rotating system.

THEORETICAL AND MANAGERIAL IMPLICATIONS

In terms of theoretical implications, the study contributes to the existing literature in the following two
ways. First, as far as the transferability of Japanese style HRM to subsidiaries abroad is concerned,

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evidence from the case study suggests that the subsidiary HRM practices mainly resemble local practices.
Thus, this study has extended previous research between country-of-origin and localisation. Secondly, it
appears that culture, labour regulations and market conditions are equally important in preventing the
transfer of Japanese practices. In this context, our study contributes towards a clearer understanding of
international human resource practices especially how developing nations’ policy can influence
international human resource policies. The findings of the investigations also provide implications for
decision makers. For local managers attached to Japanese controlled organisations, they might be pleased
to refer to fact that the hybridisation model could serve as a strategy when formulating a new HRM policy.
If successful, this model might lead to longer employee tenures and higher level of employee’s morale.

MANAGEMENT PRACTICES
 Planning in Japanese Management:
1. Long-term orientation
2. Collective decision-making (ring) with consensus
3. Involvement of many people in preparing and making the decision
4. Decision flow from bottom-to-top and back
5. Slow decision-making; fast implementation of the decision
 Organizing in Japanese Management:
1. Collective responsibility and accountability
2. Ambiguity of decision responsibility
3. Informal organization structure
4. Well-known common organization culture and philosophy; competitive spirit toward
other enterprises.
 Staffing in Japanese Management:
1. Young people hired out of school; hardly any mobility of people among companies
2. Slow promotion through the ranks
3. Loyalty to the company
4. Very infrequent formal performance evaluations for new (young) employees
5. Training and development considered a long-term investment
6. Lifetime employment common in large companies.
 Leading in Japanese Management:

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 1. Leader acting as social facilitator and group member
2. Paternalistic style
3. Common values facilitating cooperation
4. Avoidance of confrontation, sometimes leading to ambiguities; emphasis on harmony
5. Bottom-up communication

 Controlling in Japanese Management:

1. Control by peers
2. Control focus on group performance
3. Saving face
4. Extensive use of quality control circles

LEARN FROM JAPANESE MANAGEMENT

The Japanese process is focused on understanding the problem. The desired result is certain action and
behavior on the part of people. This almost guarantees that all the alternatives will be considered. It rivets
management attention to essentials. It does not permit commitment until management has decided what
the decision is all about. Japanese managers may come up with the wrong answer to the problem (as was
the decision to go to war against the United States in 1941), but they rarely come up with the right answer
to the wrong problem. In addition, that, as all decision makers learn, is the dangerous course, the
irretrievably wrong decision.

JAPANESE MANAGEMENT STYLE

 Its global strategies are based on a centralization of assets, resources, and responsibilities.
 Headquarters determines the goals, roles, policies, and procedures with little adaptation from the
subsidiaries.
 Subsidiaries depend on the corporate office for resources and directions with tight control.
 Seniority system for salaries and promotions rather than based on performance.
 The relationship among the employees and employer is like family members and taking
responsibility for each other.
 Employee’s contract is not created based upon job description.
 Analyzing an employee’s ability and aptitude, and then place the “right” people in the “right”
position within the organization.

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  Clerical positions and specialists’ jobs are very similar in western corporations.

MANAGEMENT PHILOSOPHY, OWNERSHIP STRUCTURE AND CORPORATE

STRUCTURE

Management Philosophy

The concepts of “Wa” (harmony) and “service to the nation and society” can be found expressed in
company creeds and mottoes. Every company has its own corporate or management philosophy expressed
in various ways. The most common forms of expression are “Shage” (corporate constitution) and
“Shakun” (code of behavior).
Sincerity and harmony are the most favored in Japanes Management. Refer Exhibit -2 and 3 for some
examples of “Shage” and “Shakun”. Recently, it has become fashionable among companies to establish
and propagate a corporate identity (CI) to improve the corporate image.

OWNERSHIP STRUCTURE:

The vast majority of typical Japanese companies are not family-owned. Some of these exceptions are
Toyota Motor Corporation, Oobayashi Corporation, Taisho Pharmaceuticals Co, Santory Ltd, and a few
others some others .The owners are mainly financial institutions and companies that are affiliated to the
same business group. Refer to Exhibit-4 for example.

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The relationship among the group member institutions are mutual assistance and stockholding,
interlocking directors, human resource development, joint R & D, independent members, no holding
company, regular meetings.

CORPORATE STRUCTURE:

The top-management in Japanese companies has an extremely closed structure. Although two or three
directors may be invited to join the company from outside, in most cases, directors are appointed from
within the company’s former management level-staff. Moreover, employees are not considered
consumable physical resources, but as important corporate members in the corporate structure. Refer
Exhibit-5 for the typical roles at different level in a Japanese company.

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HUMAN RESOURCES MANAGEMENT PRACTICES

The personnel and human resources management practices of Japanese companies are mainly oriented
towards people and their development. There are some specific characteristics, which are not found in the
traditional western management system. Some of these distinct characteristics are:

 Lifetime Employment: The lifetime employment system involves hiring people who have just
graduated a high rate of stability among employees and guaranteeing work until the mandatory
retirement age. The system is oriented towards human relations, human development and training
guaranteed employment, equality, participation and welfare.
 Seniority based promotion and wage system: The promotion from lower level to immediate higher
level is mostly based on seniority. However, the pace of promotion is very slow though. It does
not mean to say that promotion does not take account of performance evaluation and qualification
of the employee. Higher weight age is given to senior person, or on the number of years, he or she
has worked with the company. Wage structure is also based on seniority.
 Groupies: The special cultural quality of Japanese society has a great deal of impact on the
Japanese management practices. The typical Japanese ways of thinking –”Uchi” (insider) and
“Soto” (outsider) is actually practiced in Japanese management system. The special character of
“WE” is very strong in Japanese companies.

OPERATIONS/PRODUCTION MANAEMENT PRACTICES

The Japanese production management system attempts to pursue efficiency in connection with work while
at the same time, shows due considerations for human factors in the company. Some of the major
distinctions can be found in the just in Time production system, subcontracting and quality control.

 Just-In-Time (The Production) System: Producing and dispatching the products just in time is the
main objective of employing JIT. This contains many other areas of improvement like low cost of
production, low inventory cost, low investment for warehouses, immediate checking of
abnormalities, high value-added per person, better quality and improved productivity.
 Subcontracting: Large companies, particularly in manufacturing sector, rely heavily on a regular
subcontracting system. To secure punctual and regular supply of quality parts and semi-finished
products from subcontractors at various levels, large companies provide smaller ones with
technical, managerial and financial assistance in various forms. This way, the large and small

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 companies need not compete and contract for every supply and purchase. Mutual trust is the basis
of their long-term transactions.
 Quality Control: The Japanese production management now cannot work without considering the
concept of quality or customers in a broader sense. All employees from top-management to
workers concentrate on improving these six fundamentals of quality management (Production
Capacity, Quality of Goods and Services, Cost of Operation, Delivery timing, Safety, Morale) to
improve productivity and ensure sustainable future growth of the company.

TECHNIQUES/KEY TERMS IN JAPANESE MANAGEMENT

 Japanese 5S Framework
5 S is a very popular concept in Japanese companies. 5S'' is a tool with Japanese roots, focused on
fostering and sustaining high quality housekeeping. ''5S'' is the beginning of a productive life for everyone,
and is fundamental to productivity improvement. '5S' is a time tested and proven approach (in fact a
stepping-stone) to achieving World Class status. The 1st S stands for Seiri(sorting), 2nd S Seiton
(arranging), 3rd S Seiso (cleaning), 4th S Seiketsu (maintaining) and the 5th S Shitsuke (self-discipline).

 3M’s of Japanese

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In Japanese Language 3M is associated with reducing wastage and lowering of load due to inconsistency.
The terminology commonly used by the Japanese has the following meaning:
 Muda (waste) – activities and results to be eliminated; within manufacturing, categories of waste,
according to Shigeo Shingo, include: 1) Overproduction – excess production and early production
2) Waiting – waste time spent at the machine; delays3) Transportation – waste involved in the
movement and transportation of units 4) Processing – waste in processing; poor process design 5)
Inventory – waste in taking inventory 6) Motion – actions of people or machinery that do not add
value to the product 7) Defective units – production of an item that is scrapped or required rework
 Mura – inconsistency
 Muri – unreasonableness
 LEAN PRODUCTION/ MANUFACTURING

Lean is about doing more with less: less time, inventory, space, labor, and money. "Lean manufacturing",
shorthand for a commitment to eliminating waste, simplifying procedures and speeding up production.
The idea is to pull inventory through based on customer demand.

Five areas drive lean manufacturing/production:

 Cost
 Quality
 Delivery
 Safety,
 Morale
 TOTAL QUALITY MANAGEMENT (TQM)

According to the Japan Industrial Standards, "implementing quality control effectively necessitates the
cooperation of all people in the company, including top management, managers, supervisors, and workers
in all areas of corporate activities such as market research and development, product planning, design,
preparation for production, purchasing, vendor management, manufacturing, inspection, sales and after-
sale services, as well as financial control, personnel administration, and training & education.

Quality control carried out in this manner is called company-wide quality control or total quality control
(TQC)." Quality control in Japan deals with quality of people. It is the fundamental concept of the Kaizen-

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style TQC. Building quality into its people brings a company a halfway towards producing quality
products.

Seven Main Features of the TQC Movement in Japan

1. Company-wide TQC, involving all employees, organization, hardware, and software.

2. Education and Training, emphasis for top management, middle management and workers.

3. Quality control (QC) circle activities by small groups of volunteers

4. TQC audits

5. Application of statistical methods

6. Constant revision and upgrading of standards

7. Nation-wide TQC promotion.

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 CONCLUSION

 Kaizen is the most prominent Japanese management practice. It refers to continuous improvement and
the idea that any managerial process can be perfected. Kaizen is not so much a detailed management
practice but a philosophy that should be lived and implemented by every member of a Japanese firm,
from the top management to the shop for. The idea of kaizen does not include radical changes, such
as job cuts, but mostly consists of small changes, often on a daily basis, and is based on constant
communication with other group members.
 The 5S system is system consisting of five concepts that begin with the letter “S”
in Japanese:seiri (sort),seiton(settingorder),seiso(clean),seiketsu(systematize),
andshitsuke (standardize). The 5S system is an organizational system for production processes
 Quality circles are a means of quality management in the Japanesefrm. They support employees in
contributing their own ideas.
 Genchi genbutsu refers to inspection at the level of the shop for. In doing this, Japanese employees
can find solutions for problems at the actual place where they occur.• After a project or an
event, Japanese business people usually hold a refection meeting called hanseikai . In ahanseikai , the
performance is evaluated, and points o improvement are discussed.
 From the 1990s, however, Japanese corporate management has bounced back and forth between the
Japanese style and the global standard, which might more appropriately be called the American way.
Amid the ongoing globalization, response to global environmental problems, the declining birthrate
and the aging of society, and diverse other changes in the times and our surroundings, the time has
come to pursue a new way of Japanese management as the ideal form for Japanese corporations, which
constitute the core of our market-oriented economy and society. The major strength of the Japanese
approach is the recognition of human creativity. As Taiichi Ohno, who pioneered the Toyota
Production System said: "Manpower is something that is beyond measurement. Capabilities can
be extended indefinitely when everybody begins to think".

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 REFERENCES

 Hayashi, S., (1991). Culture and management in Japan. Tokyo: University of Tokyo Press.
 Nakatani, I., (1992). Economic Analysis of Japanese Firms. Tokyo: Asian Productivity
Organization.
 Low Sui Pheng, Gao Shang, "Bridging Western management theories and Japanese management
practices: case of the Toyota Way model", Emerald Emerging Markets Case Studies, (2011)
 Dirks, Daniel, Jean-Francois Huchet, and Thierry Ribault, eds. Japanese Management in the Low
Growth Era. Berlin: Springer Verlag, 1999.
 Harukiyo, Hasegawa, and Glenn D. Hook. Japanese Business Management. London: Routledge,
1998.
 Bamber, G.J., Shadur, M.A. and Howell, F. (1992) ‘The international transferability of Japanese
management strategies: an Australian perspective’, Employee Relations, Vol. 14, No. 3, pp.3–19.
 Wikipedia.com
 Understanding of Japanese’s management (book).

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