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 / First Quarter 1997 / Issue 6(originally published by Booz & Company)


The Art and Practice of Japanese Management

Yet the process is different now because, for the first time in 30 years, the Japanese are trying not just to improve their own management models, but to merge them with Western ones.

One important thinker in this respect is Yotaro Kobayashi, the boss of Fuji Xerox, who is something of a hero to the younger generation of Japanese managers and who has spent much of the past decade insisting to his peers that his country's idea of consensual leadership needs to change. Mr. Kobayashi, a graduate of the Wharton School of the University of Pennsylvania, has spent years as the head of a joint venture with an American company.

He argues that Japanese bosses must learn how to make tough decisions and how to "market" them, both within their firms and in the world at large, so that employees and outsiders can see the logic of unpalatable choices. He also believes that Japanese managers need a dose of Western-style professionalism. Leaders should be carefully trained, not just allowed to emerge from the ranks. He encourages Fuji Xerox's rising middle managers to take responsibility for strategic decisions. He also likes to send a few to take American M.B.A. courses -- though he is careful not to give the impression that the firm is being turned into an American colony.

Mr. Kobayashi wants to introduce a streak of rebelliousness into the salaryman's soul: Japanese managers ought to challenge their business models rather than just endlessly improve them.

Mr. Kobayashi's own career was much influenced by a visit in the United States to the Aspen Institute, which puts on mind-broadening seminars for business leaders. He now has his own version in Japan where business people sit and listen to philosophers as well as people like Peter F. Drucker, and debate issues like the environment as well as questions about management.

A Dignified Retreat

Is Mr. Kobayashi just a voice crying in the wilderness? Consider two areas in which Japanese management has been slow to change: lifetime employment and multicultural management.

On the surface, Japanese companies have tried hard to hang on to the idea of a "job for life," doing anything to find new jobs for redundant personnel. In companies like Honda it is even possible to find male managers serving coffee in place of the traditional office ladies.(7) To avoid having to sack people, companies are cutting back on bonuses, preventing workers from doing so much overtime and freezing recruitment. Nissan used to take between 1,500 and 2,000 new recruits a year; it hired only 55 in 1995. Nowadays, Japanese graduates anxiously study the age-profiles of companies, which are published annually, to see if they have any chance of a career.

Yet there is movement. Western-style assessment procedures are creeping into big Japanese firms, and jobs are not as safe as they used to be. Despite their loyalty to the concept of "lifetime employment," firms are redefining what they mean by the phrase, arguing that it applies only to a proportion of workers, and whittling down that proportion as far as they can. A few are introducing "voluntary" early retirement for their lifetime employees.

As for the problem of dealing with foreign staff, the best Japanese companies have certainly begun to talk like "multicultural multinationals." NEC is putting all its products "into a global perspective in order to determine the most appropriate locations for design, manufacturing and sales."(8) Matsushita, once one of the biggest defenders of its home base, has now decided that it is a "multi-local" and talks about being a "global network manager."(9) Nissan is keen on creating a "global team spirit" and talks about using the entire world as a "knowledge base."

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