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The international human resource management of japan

In doing so, the Japanese have absorbed Western technology, science, education and politics, while still keeping their unique cultural identity.

The Japanese have always been distinctly aware of the difference between foreign and native things, and very early they recognized the value of borrowing from others, while maintaining their Japaneseness Gannon, 1994. For the most part, the only language spoken in Japan is Japanese. The country is an island culture of almost total ethnic homogeneity Engholm, 1991. Asian common cultural traits such as group centredness, authoritarianism and protocol are salient ingredients of the Japanese society.

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  • In doing so, the Japanese have absorbed Western technology, science, education and politics, while still keeping their unique cultural identity.

Contrary to other Asian countries, the collectiveness of Japanese culture has been carried over to the companies Kashima and Callan, 1994. A job means identification with a larger entity through which one gains pride and feeling of being part of something significant, tying an individual's prestige directly to the prestige of his or her employer.

Typically, the company is seen as a provider of security and welfare. Actually, loyalty to the company even surpasses the family bond. The Japanese believe in a natural order in society and in Japanese organizations different rank and statuses are considered perfectly normal, to the extent that people's ranks are usually more important than their names.

The Japanese are great believers in establishing a person's status as quickly as possible so that the proper interaction and communication can take place. The language is also used to reinforce the natural order of ranks and statuses. Various endings are added to words to subtly indicate the status of a person, and at work honorifics are used to address higher status managers.

The Japanese are great believers in doing things the proper way, following a specific protocol. Kata is the the international human resource management of japan of doing things, especially regarding the form and order of the process.

There are katas for eating properly, using the telephone, treating foreigners, and so on.

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  3. Management International Nonaka, I. Whether internal or external attribu- by the parent company over the affiliate and a tion occurs can be affected by the environ- resultant loss of affiliate flexibility.
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Japanese tend to believe that conducting something in the proper way will eventually result in doing it in the most successful manner.

Katas were developed within this hierarchical society, because it was assumed that everyone has defined life roles bun in which obligations are spelled out in detail. Obeyance of the rules reflects one's inner character. Current environment Japan has a population of 126 million, of which the labor force constitutes 68 million 54 percent.

The female share of the workforce is 41 percent. The education level is high with 43 percent of the age group in 1996 being tertiary students, of which almost half 44 percent are female. The average growth rate of the population 1980-1997 is only 0. This has contributed to a rapidly aging population pyramid.

It has a highly advanced economy where agriculture only amounts to 2 percent of GDP but services account for 60 percent and industry 38 percent. Its major industries are motor vehicles, electronic machinery and consumer electronic equipment. Electric machinery and non-electronic machinery are major exports Far Eastern Economic Review, 1999. Japan's economy finally began to show signs of a recovery in 1999. Promoted by giant government stimulus packages, the economy surged ahead the international human resource management of japan an annualized 7.

However, other signs were more negative, as the unemployment rate increased in June to an all-time high level of 4. Land prices continued to fall, and capital expenditure and demand for loans remained low, as firms trimmed excess capacity instead of investing in new plants and equipment. Restructuring of Japan's financial sector started in late 1998 and continued in 1999 with massive mergers. These reorganizations were expected to increase efficiency. Traditional practices Hiring of workers and managers into entry-level positions directly out of college is common.

Pay rises and promotions are automatic. In the wage system based on seniority nenko-joretsustatus and seniority are tied to length of service, rather than to job duties or merit. Shushin koyo is the lifetime employment system. Participation by coworkers in after-hours gatherings to foster harmony and cooperation is generally expected. Workers take responsibility and then accept blame, to protect their superiors from loss of face.

Although subordinates know that they can influence decisions, the ultimate decision comes from the top. Japanese managers make an active commitment to preserve harmony, through intricate social rituals like gift giving, bowing to superiors, and using honorific language to show deference. They keep their opinions to themselves, rarely expressing true feelings honneinstead voicing tatamae feelings, revised to harmonize with those of the group.

Japanese managers humbly decline to take credit for personal achievements, even when credit is due. They cooperate with their coworkers in every way they can to complete their tasks without involving their boss in any mistakes and problems along the way. Every group member is responsible for lending a hand in achieving the objectives of the group Engholm, 1991. Operationally, workers belong to production teams with fluid job assignments.

They often gain a broad perspective on production by being rotated through different departments. Such investments in breadth of skill and overall understanding of the production process are justified by the strong lifetime employment guarantees the international human resource management of japan workers to their companies and allowing the skilled and experienced production workers to contribute to management decisions Doeringer et al.

Changing HR practices Sources of change The breakdown of the keiretsu interfirm network system of crossshareholding and preferential trading among member corporations of a business group Gerlach, 1992 has badly hurt the safety net of supporting the long-term growth strategy of Japanese firms and their ability to protect employees from downside market risks Lincoln et al.

Deregulation is another force for change. It has made Japanese markets more accessible to competitors, foreign as well as domestic. The aging population also has clear implications for corporate human resource practice. With an aging workforce, the permanent employment and seniority system burdens firms with rising numbers of higher-paid and less productive workers. Previously, these systems were more suitable to employers, since the steep seniority escalator resulted in less payment for the relatively young workforce and the permanent employment norm reduced the uncertainties and costs of high staff turnover.

Finally, the transition to a service economy combined with socio-cultural and socio-economic changes has had a profound effect on Japan's employment institutions. Although leading-edge manufacturers are still competitive, their contribution to Japanese domestic employment and income is shrinking, in favor of the emerging service sector as the next great engine of jobs and wealth.

Employment practices of sales and service firms are different from those of manufacturing. Their younger workforce is more mobile, less committed to work and the firm. Furthermore, since the organization of work in service firms is less team based, individual performance is more easily evaluated.

Accordingly, occupational skills are valued over firm-specific skills, so that broad job experience becomes the main driver of wages and performance rather than loyalty to one employer Debroux, 1997; Lincoln and Nakata, 1997; Ornatowski, 1998. Gender issues are rapidly surfacing in the Japanese traditionally male dominated corporate world. Japanese women, long locked in the crouch of teaserving office ladies or contract workers performing low-skilled work on the assembly line, are standing up Kenney et al.

Professional young women are flocking to new high-tech ventures, where gender does not seem to matter much. Seku-hara, Japanese slang for sexual harassment, has become a buzzword feared in many a corporate and government office. Needless to say, there are no female directors on Japanese boards of major corporations.

This is not likely to change in the near future due to entrenched cultural values and institutional practices Bostock and Stoney, 1997. Lifetime employment Traditionally, this type of employment refers to core employees, leaving out temporary workers, subcontractors, seasonal workers, part-timers and dispatched employees.

There is evidence of a continuing commitment to the lifetime employment principle. Furthermore, 82 percent characterized lifetime employment as advantageous, while only 18 percent believed it to be disadvantageous Lincoln and Nakata, 1997; Ornatowski, 1998. Firms have used various means to scale down labor costs. The Japanese Ministry of Labor reported recently that 34 percent of the firms surveyed had undertaken one or more of the following: Also the government seems determined to avoid an abrupt departure from the lifetime employment system.

The Japanese Ministry of labor subsidizes up to two-thirds of the wages of the employees whose firms implement temporary factory shutdowns instead of genuine layoffs. Starting in 1994, the further reinforcement of the existing employment adjustment measures has resulted in about 4 million workers around 6. Recruitment and careers Cutting back new hiring is not such a simple and risk-free way of reducing labor costs as it may seem.

Maintaining a stable yearly influx of new graduates reassures the labor market of the stability and trustworthiness of a Japanese firm and corporations fear that their competitiveness for new talent will be threatened by reduced hiring. The firms are administering sophisticated tests and other screening devices to select high quality recruits, whatever their deficits in academic certification.

However, there are lingering doubts as to how fundamental this shift in hiring practice is. Merely a professed openness on the part of employers to recruit from non-conventional sources does not really signify a fundamental new trend Lincoln and Nakata, 1997.

Although an employee of kacho rank in the ability or status the international human resource management of japan hierarchy has no management role, but remains a staff member, his compensation and status ranking is equivalent to that of true section heads.

Advancing in the status hierarchy does not mean becoming a manager; only those with a genuine talent for leading others become managers. Payment systems In the nenko system, employees who join the firm without any work experience are paid a low starting salary but can look forward to steady raises with increasing age and seniority until retirement Lincoln and Kalleberg, 1990.

Such a system depends on lifetime employment, because, without the guarantee that they will be around to collect their return on their early career investment, employees would find it unattractive. At the same time, under lifetime employment, the organization has an incentive the international human resource management of japan continually invest in training and it does not risk the loss of its investment or proprietary knowledge.

The consequence is that both parties, the international human resource management of japan firm as well as the employees, have a long-term stake in the development and success of each other Lincoln and Nakata, 1997. Recently, growing numbers of companies are explicitly weighting ability and performance over tenure and age in salary decision. Since the early 1990s, some companies have developed a system of job ability-based wages focusing individual worker performance over one year compared with goals set at the beginning.

This new system is quite close to a true performance-based pay system. This system is primarily used for managers and general managers, not for lower level employees.

The monetary benefits to employees, if any at all, are typically small Debroux, 1997; Lincoln and Nakata, 1997; Ornatowski, 1998. The attempt to shift from nenko to performance pay illustrates the dilemma companies face.

Managers worry that the resulting inequities will destroy morale and cohesion. Furthermore, most companies would not like to see younger people supervise older ones. Also, there are fears that individual merit pay will ruin the Japanese system of team-based production, where stronger team members assist weaker ones for the good of the performance of the team as a whole Lincoln and Nakata, 1997.

The continuities in the Japanese employment systems are as striking as the changes, especially when one considers the depth and length of the economic recession. Based on data from 1,618 firms, Morishima 1995 identifies three different types of attitudes and actions of firms toward employment system reform.

One group of companies tries to change their wage system from seniority based to performance based and these firms try at the same time to use the external labor market to recruit workers. Although they represent the highly publicized trend away from traditional Japanese employment practices, these companies only make up 10. A third group 32.