Japanese Management – 2
In the earlier Gyan, I had promised to write about the fallacies of Japanese Management, but some time later. But then, there were many queries and feedback asking for more information on this topic. So I’m just giving it a try.
As said earlier, the books published in 1981 named “The Art of Japanese Management” by Athos and Pascale and “Theory Z” penned by William Ouchi became overnight success and the American business pundits were forced to turn their attention to Japan and give due credit to Deming and Juran for the work they did.
But the other faction of Management gurus was no behind in bashing the Japanese Management Techniques. Soon, a flurry of Anti – Japanese Management books started flooding the market.
In 1981 itself, an author named Gibney published a book condemning Theory Z and blaming Ouchi of making false promises. In 1982 another author Bruce Brigs declared Theory Z “idiotic” and “dangerous”. According to him, Japanese Management has nothing to do with the amazing success Japanese companies have achieved and should not be attributed for it. It’s because of the workers who worked day in day out, without complaining against the management that these companies could turn things around.
His book and opinions were soon followed by one more author named Sullivan who criticized those Americans who think that implementing Japanese Management techniques in America would make them successful as well. He pointed out the qualities of Japanese people like obedience, paternal attitude and rigidity in following procedure that made these companies give good results. Implementing the same techniques as they are in a free country like America would not be advisable. The concept of “Life long Employment” preached by Japanese Management only makes the employee uncompetitive as he is assured of a job without taking any responsibility and risk.
In 1984, Sethi, Namiki and Swanson coauthored “The False Promise of the Japanese Miracle”. In this book, they extended the same views Sullivan had stated in his book. The principles of Japanese Management are the result of their culture and work ethics. Things like “Collective Responsibility” can work only in a country like Japan and not in US. Implementing these principles in US, without any thought and customization, would not only be a failure but a disaster. In Japan, the government and the companies share good relations. Government funds the ailing businesses to bring them back on track. In turn, these companies, too, provide necessary funding to the political parties. The upper echelon of these companies is called Zakai. Zakai is very influential and governs major decisions pertaining to policies and industries, to suit themselves, even when they are against the common man’s interest.
In Japan, the women are always suppressed and can work only on non – strategic posts of Secretary or Receptionist, etc, unlike US. The authors reiterated the significant part Japanese culture plays in their business and asked not to copy the principles of Japanese Management blindly.
The debate over Japanese Management can’t be complete without taking note of a Japanese thought leader: Kenechi Ohmae. Born in 1943 in Kyushu and educated in Waseda University, Ohmae doesn’t quite like to be called Japanese. Instead, he prefers “World Citizen”.
After graduating from Tokyo Institute of Technology, he went on to pursue Ph.D. in Nuclear Engineering in MIT. The credentials of Ohmae do not end here. In 1972, he started working at the Tokyo office of McKinsey and later rose to become a partner over a span of 23 years. He co-founded McKinsey's strategic management practice in Japan and Asia-Pacific. He also served as an advisor to Japanese President Nakasone. He had made an unsuccessful attempt to start a political party in Japan. Apart from doing all this, he has penned more than 140 books; amongst them are bestsellers like “Triad Power”, “The Mind of the Strategist”, “The Borderless World”, “Beyond National Borders” and “The End of the Nation State”. No wonder he is hailed by the titles like “The Only Japanese Management Guru” and “Mr. Strategy”
And well, if he wouldn’t have succeeded in becoming a Management Guru, he surely would have made a career as a Flute player. His flute is good enough to captivate a concert! A multi faceted personality, I must say!
In his books, Ohmae criticizes the principles of Japanese Management. He proved the fallacy prevailing about the Japanese Management that every decision is taken from bottoms up, involving all the layers of the organization or that Japanese companies do long term planning.
But at the same time, in his book “Mind of the Strategist”, he explains how Analysis and Synthesis play an important role in decision making at any Japanese company. Generally, more stress is given on finding out the important factors and the relation linking them. The methods are based more on intuition and lateral thinking than on logical thinking and statistics. The decision makers are logical and at the same time, creative.
Although, I haven’t read them, the crux of his other books “Triad Power”, “Borderless World” and “Beyond National Borders” is a portrayal of a combined market comprising of US, Europe and Japan, having a single currency and sharing economical and political power. According to him, any company that aspires to be globally successful must achieve success in these three markets. Today, the rich countries are outsourcing their business to the Third World countries in search of cheap labour. But according to Ohmae, the trend would soon change once the automation would replace the human labour. And hence, he advises not to rely on Third World Countries for labor. He also stresses on Globalization and the role to be played by the government in Globalization. No company, today, can afford to neglect globalization and should continuously improve and invent new techniques to stay competitive.
In spite of all the opposition from these Management Gurus, American companies made trips after trips to Japan to learn their techniques. On the lines of “Deming Prize” in Japan, America introduced “Baldridge” prize for quality. American companies started implementing Total Quality Management. Motorola declared that their profit increased by $3.2 Billion over 1987 – 1992 because of TQM and Six Sigma!
The decades of 80’s and 90’s taught Americans everything that was there to learn from Japanese companies. American economy also was doing exceedingly well. At the same time, Japanese economy was going through a sluggish period. The trend of Japanese companies buying American companies had reversed. Ford bought a 24.5% stake in Mazda that rose to 33% later. GM made a joint venture with Toyota and learnt their management techniques.
Japan had, thus, was left with not much to give to the World of Management. Japan itself was plagued with increasing bureaucracy, inefficiency, prolonged decision making process and ill effects of Life long employment; add to that the undue stress on continuous improvement (Kaizen)
As stated at the end of the earlier Gyan, Japanese companies could not invent and cash on the new upcoming opportunities like Mobile Phones and computer, where the US Companies had already got a big head start. Of course, this does not mean that Kaizen is ineffective. But somewhere it restricted the companies to improve on the existing processes and products only and provided less scope for research and development of new concepts. Japanese companies thus lost major breakthroughs. In view of the globalization, Japanese themselves started pointing fingers at the principles of Japanese Management, e.g. The collective decision making process was criticized by prominent Japanese like Yoharo Kobayashi of Fuji Xerox; Japanese banks adopted “Up or Out” strategy i.e. either you thrive in spite of the competition or you have no place in the organization. In short, Japanese again traced back American steps to “Hire and Fire” policy!
Well, in spite of all the debate, shortcomings, fallacies, criticism about Japanese Management, I can’t help but repeat the way I ended the earlier Gyan: Japanese Management has still given a lot to the World of Management …
As said earlier, the books published in 1981 named “The Art of Japanese Management” by Athos and Pascale and “Theory Z” penned by William Ouchi became overnight success and the American business pundits were forced to turn their attention to Japan and give due credit to Deming and Juran for the work they did.
But the other faction of Management gurus was no behind in bashing the Japanese Management Techniques. Soon, a flurry of Anti – Japanese Management books started flooding the market.
In 1981 itself, an author named Gibney published a book condemning Theory Z and blaming Ouchi of making false promises. In 1982 another author Bruce Brigs declared Theory Z “idiotic” and “dangerous”. According to him, Japanese Management has nothing to do with the amazing success Japanese companies have achieved and should not be attributed for it. It’s because of the workers who worked day in day out, without complaining against the management that these companies could turn things around.
His book and opinions were soon followed by one more author named Sullivan who criticized those Americans who think that implementing Japanese Management techniques in America would make them successful as well. He pointed out the qualities of Japanese people like obedience, paternal attitude and rigidity in following procedure that made these companies give good results. Implementing the same techniques as they are in a free country like America would not be advisable. The concept of “Life long Employment” preached by Japanese Management only makes the employee uncompetitive as he is assured of a job without taking any responsibility and risk.
In 1984, Sethi, Namiki and Swanson coauthored “The False Promise of the Japanese Miracle”. In this book, they extended the same views Sullivan had stated in his book. The principles of Japanese Management are the result of their culture and work ethics. Things like “Collective Responsibility” can work only in a country like Japan and not in US. Implementing these principles in US, without any thought and customization, would not only be a failure but a disaster. In Japan, the government and the companies share good relations. Government funds the ailing businesses to bring them back on track. In turn, these companies, too, provide necessary funding to the political parties. The upper echelon of these companies is called Zakai. Zakai is very influential and governs major decisions pertaining to policies and industries, to suit themselves, even when they are against the common man’s interest.
In Japan, the women are always suppressed and can work only on non – strategic posts of Secretary or Receptionist, etc, unlike US. The authors reiterated the significant part Japanese culture plays in their business and asked not to copy the principles of Japanese Management blindly.
The debate over Japanese Management can’t be complete without taking note of a Japanese thought leader: Kenechi Ohmae. Born in 1943 in Kyushu and educated in Waseda University, Ohmae doesn’t quite like to be called Japanese. Instead, he prefers “World Citizen”.
After graduating from Tokyo Institute of Technology, he went on to pursue Ph.D. in Nuclear Engineering in MIT. The credentials of Ohmae do not end here. In 1972, he started working at the Tokyo office of McKinsey and later rose to become a partner over a span of 23 years. He co-founded McKinsey's strategic management practice in Japan and Asia-Pacific. He also served as an advisor to Japanese President Nakasone. He had made an unsuccessful attempt to start a political party in Japan. Apart from doing all this, he has penned more than 140 books; amongst them are bestsellers like “Triad Power”, “The Mind of the Strategist”, “The Borderless World”, “Beyond National Borders” and “The End of the Nation State”. No wonder he is hailed by the titles like “The Only Japanese Management Guru” and “Mr. Strategy”
And well, if he wouldn’t have succeeded in becoming a Management Guru, he surely would have made a career as a Flute player. His flute is good enough to captivate a concert! A multi faceted personality, I must say!
In his books, Ohmae criticizes the principles of Japanese Management. He proved the fallacy prevailing about the Japanese Management that every decision is taken from bottoms up, involving all the layers of the organization or that Japanese companies do long term planning.
But at the same time, in his book “Mind of the Strategist”, he explains how Analysis and Synthesis play an important role in decision making at any Japanese company. Generally, more stress is given on finding out the important factors and the relation linking them. The methods are based more on intuition and lateral thinking than on logical thinking and statistics. The decision makers are logical and at the same time, creative.
Although, I haven’t read them, the crux of his other books “Triad Power”, “Borderless World” and “Beyond National Borders” is a portrayal of a combined market comprising of US, Europe and Japan, having a single currency and sharing economical and political power. According to him, any company that aspires to be globally successful must achieve success in these three markets. Today, the rich countries are outsourcing their business to the Third World countries in search of cheap labour. But according to Ohmae, the trend would soon change once the automation would replace the human labour. And hence, he advises not to rely on Third World Countries for labor. He also stresses on Globalization and the role to be played by the government in Globalization. No company, today, can afford to neglect globalization and should continuously improve and invent new techniques to stay competitive.
In spite of all the opposition from these Management Gurus, American companies made trips after trips to Japan to learn their techniques. On the lines of “Deming Prize” in Japan, America introduced “Baldridge” prize for quality. American companies started implementing Total Quality Management. Motorola declared that their profit increased by $3.2 Billion over 1987 – 1992 because of TQM and Six Sigma!
The decades of 80’s and 90’s taught Americans everything that was there to learn from Japanese companies. American economy also was doing exceedingly well. At the same time, Japanese economy was going through a sluggish period. The trend of Japanese companies buying American companies had reversed. Ford bought a 24.5% stake in Mazda that rose to 33% later. GM made a joint venture with Toyota and learnt their management techniques.
Japan had, thus, was left with not much to give to the World of Management. Japan itself was plagued with increasing bureaucracy, inefficiency, prolonged decision making process and ill effects of Life long employment; add to that the undue stress on continuous improvement (Kaizen)
As stated at the end of the earlier Gyan, Japanese companies could not invent and cash on the new upcoming opportunities like Mobile Phones and computer, where the US Companies had already got a big head start. Of course, this does not mean that Kaizen is ineffective. But somewhere it restricted the companies to improve on the existing processes and products only and provided less scope for research and development of new concepts. Japanese companies thus lost major breakthroughs. In view of the globalization, Japanese themselves started pointing fingers at the principles of Japanese Management, e.g. The collective decision making process was criticized by prominent Japanese like Yoharo Kobayashi of Fuji Xerox; Japanese banks adopted “Up or Out” strategy i.e. either you thrive in spite of the competition or you have no place in the organization. In short, Japanese again traced back American steps to “Hire and Fire” policy!
Well, in spite of all the debate, shortcomings, fallacies, criticism about Japanese Management, I can’t help but repeat the way I ended the earlier Gyan: Japanese Management has still given a lot to the World of Management …
posted by Gyan for the Day! | 5:12 am
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