Global Business

3.Do you think the Japanese management style is still relevant in today’s and tomorrow’s rapidly changing global business environment?

-> Japan experienced an exponential growth around 1980’s, being 2nd largest economy after US and it also experienced its worst growth stagnation in 1990 for the first time, post-world war.

The Japanese term "hourensou" refers to frequent reporting, touching base and discussing -- important attributes that are said to characterize collaboration and information flow within effective Japanese corporate culture. In Japan decisions are made only after having a consensus i.e. Japanese debate a proposed decision throughout the organisation until there is an agreement on it and only then the decision is made. While in western countries, managers are given full authority to make small decisions based on his/her experience.

The Japanese management system revolves around ‘Keiretsu’, which played a vital role in building the Japanese economy and giving birth to national champions such as Toyota, Sony, etc. [b] In Keiretsu number of organisations link together, usually by taking small stakes in each other and usually as a result of having a close business relationship, often as suppliers to each other. The structure, frequently likened to a spider's web, was much admired in the 1980s as a way to defuse the traditional adversarial relationship between buyer and supplier. 

[a] But as of 2016 Japan is experiencing a severe economic crisis where the government is in debt of above 240% than its GDP and deficits of around 8% of GDP per year. With this data it is certain that Japan needs to change some of its management practices and adopt some of its western counterparts. This will help Japan to learn and implement new management style also by keeping their old values intact.

Macroeconomic problems
For more than a decade, Japan experienced a major macroeconomic crisis, characterised by two
mutually reinforcing negative phenomena: low (or even negative) growth and deflationary tendencies. This crisis put pressure on companies to introduce substantial changes in order to increase
competitiveness, which ultimately helped to break the vicious cycle of low growth and deflation.17
If a crisis (such as a recession) is a driving factor for change, then overcoming it (for example
through the economic recovery which Japan has experienced between 2004 and 2008) may well
reduce the pressure for change and may even result in a return to more traditional management
practices.

A study investigating the management models of Japan, the US and Germany, which was
based on a meta-analysis of more than 250 research texts, concluded for example, that all three
management models are deeply embedded in and influenced by their respective cultural, socio-political and economic contexts;

mpanies who were hired under the principles of lifelong employment, seniority and job rotation. After years of hard work and sacrifice, they are now
counting on receiving their reward in the form of job security, automatic promotions into managerial positions, and constant pay increases.

mpanies who were hired under the principles of lifelong employment, seniority and job rotation. After years of hard work and sacrifice, they are now
counting on receiving their reward in the form of job security, automatic promotions into managerial positions, and constant pay increases.

‘Continuation of the traditional Japanese management model: an unlikely outcome
The Japanese managers considered a mere continuation of the traditional Japanese management
model (scenario 1) to be highly unlikely (‘a model of the past’). They believed the overall drivers
for change are of such significance that there is little room for ‘just’ some limited readjustment
processes within the confines of the traditional management model. Furthermore, the changes
already implemented have been very substantial and, according to the respondents, it would
be very unlikely for them to be taken back, even with an improvement in the macro-economic
situation.

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