Japanese Management: Separating Fact from Fiction

George Sherman

A great many American managers have become fed up with hearing incessantly about the virtues of Japanese management. They are tired of the endless conferences, seminars, and books that tell them to emulate the Japanese.

Fortunately for these poor souls, and significantly for American industry, signals emanating from Japan indicate that its vaunted industrial machine is starting to misfire here and there.

Subject to the stresses and strains from a long overdue American effort to become more competitive in key indus- tries, and with Taiwan and Singapore chipping away at some of the established markets, Japanese manufacturers report- edly are resorting to some of the management tactics that generated many of the problems which have impaired the productivity and profitability of American companies over the past quarter century.

Reports trickling out of Japan refer to such practices as “speedups” combined with reduction of the number of workers on the speeded-up assembly lines, excessive over- time, and less and less attention to and concern over worker safety.

At the same time, there is evidence that younger Japanese workers are not as willing as their elders to put company loyalty before their personal lives.

These developments may threaten the productivity and labor-management harmony that have helped Japan to conquer world markets.

The familiar image of Japanese management

Blessed with a benign labor-management rela- tionship (we call their type of unions company unions over here) and with a friendly and cooperative government sup- porting their efforts at every turn, the story of how the Japanese have penetrated and even devastated key American markets is well known.

As a result, many American managements have adopted some of the Japanese participative management ap- proaches such as quality circles and have come around to giving more than lip service and a paragraph in the annual report to the idea that people truly are their most important asset.

Eleven years ago, I participated in a comprehensive study of Japanese industry as a member of a fifteen-person U. S. team that traveled to Japan under the auspices of the now defunct U.S. Productivity Center and Industry Week maga- zine. I was particularly impressed with the Japanese manage- ment style and its recognition of the importance of the rank- and-file employees.

For example, Norishige Hasegawa, president of the Sumitomo Chemical Company, stated, with regard to Japa- nese willingness to emulate some American management methods, that “We have been careful not to gorge ourselves and disrupt our deeply ingrained patterns of human rela- tionships for the sake of efficiency, profits and individu- alism-the new values imported from the West. My role, as I see it, is to provide strong but not dictatorial leadership, to establish a sense of purpose, and to promote a feeling of interest and concern that will inspire and motivate everyone throughout the company.”

Former Sony executive Shigeru Kobayashi expressed the then Japanese management philosophy this way: “Human beings are the central focus of the plant if we are to make it a place which contributes to the growth and develop- ment of human beings.”

By way of amplifying that thought, Kobayashi also emphasized that “Dictatorial application of authority de- stroys a worker’s individual personality, turns him into a cogwheel, making him actively unhappy as a person. This is a deterrent to productivity, is a misuse of authority, and leads eventually to the self-destruction of the organization.”

This same people-oriented philosophy dominated the conversation of the top personnel executive at the giant Toyota automobile corporation, a youngish Japanese ex- ecutive by the name of Uzuhiko Tsuboi: “Regard for the people is the highest priority,” Tsuboi asserted, “. . . and any problems or alienations between the company and labor must be solved with mutual understanding and trust. A real flow of communication between labor and management I regard as essential.”

Finally, a man who was generally regarded at the time as one of the giants of Japanese industry and honored by many Japanese as the greatest businessman of twentieth- century Japan, Konosuke Matsushita, was a leading propo- nent of management’s placing a high priority on people

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relationships. He said it this way: “The human personality is respected in our company. We do not try to standardize personality. We encourage the individual development of character.”

Matsushita believed that it would be possible and practical to blend certain aspects of the American manage- ment style with that of the Japanese without sacrificing the human factor, saying that “Rationalism should be held in the right hand, and a strong sense of duty and humanism in the left hand-for ideal management.”

A new look at Japanese management

Unfortunately, all those beautiful words and phrases about the importance of the worker (which are so often preached and so seldom practiced in the United States) may be coming through these days sounding as hypocritical to the Japanese employee as they do in many (though not all) American companies.

In a courageous and highly controversial (in Japan at least) book, a Japanese journalist by the name of Satoshi Kamata has described his experiences while working out a six-month contract as a seasonal worker on the assembly line at Toyota.

Titled Japan in the Passing Lane (American edition, New York: Pantheon Books, 1982), Kamata’s book (actually a diary) paints a rather bleak picture of what life is like on the assembly lines at Toyota, an entirely different image of Japanese management style than that described by this writer and others, including Peter Drucker, who have visited Japa- nese factories.

The book, which has received favorable notices from Time, the New York Times, Library Journal, and the Village Voice, begins with a notation by Tatsuru Akimoto, the trans- lator.

He states that the inspiration for the document came from a discussion between Kamata and a friend who for several years was a seasonal worker at Honda manufacturing plants.

When the Honda employee described to Kamata what Akimoto reports as “the grim working conditions [at Honda], the boredom, monotony, and incessant work de- mands and high turnover rate among both seasonal and regular workers and lower management employees,” the Japanese journalist decided to find out for himself and ob- tained a contract as a seasonal assembly-line worker for Toyota for a period of six months.

According to Akimoto, the journalist “wanted to experience the situation first hand and chose Toyota because he had heard that the working conditions there were much harsher than at other automobile plants in Japan.”

In his book, Kamata does indeed report grim condi-

tions. He complains of continued speedups on the assembly lines, “an ever increasing push to put out more production with fewer workers on the line.”

Kamata quotes from an article, called “Brilliant Rec- ord Achieved,” that appeared in the Toyota plant newspaper:

In order to shake off the desperate pursuit of other auto com- panies and to catch up with the two biggest companies in the world, each one of us must always try to surpass the others in every single section of the company. Toyota demands that every worker offer all of his abilities and exert himself to promote productivity. We must always try to improve our- selves so we can contribute more and function better.

Kamata maintains that production achievements have resulted from constantly requiring fewer and fewer workers to do more and more through increasing the speed of the line and through requiring excessive overtime and holiday work.

As for worker reactions, Kamata reports the follow- ing graffiti on the wall of a Toyota bathroom: “Toyota people aren’t people, only machines.”

What can workers do about such conditions? Kamata reports an exit interview statement made by a seasonal worker who had resigned in disgust over the working condi- tions. The exit interview was not intended for the eyes of other workers, but was found on a foreman’s desk. The germane sentence read, “The pay is terrible considering how hard the work is.”

Kamata claims other regulars urged him to also fill out his exit interview form “truthfully” when his contract had expired.

When Kamata asked the regulars why they did not speak up, the reply was: “If we speak out now, we’ll suffer for at least 10 years.”

Kamata then raised the possibility of their getting help from the union, asking, “How about the union, won’t they take care of you?”

The response to that question was succinct: “The union works for management.”

Management denials

In an effort to present both sides, in August 1984 I interviewed a half dozen Japanese managers and executives from three different organizations relative to Kamata’s ac- cusations of brutality and callousness based on his personal experience at Toyota and from the accounts of his friend at Honda.

Here I will quote only three, since all of them denied Kamata’s claims.

Osamu Mochizuki, managing director of a company called Panafacom Limited, insisted that the working atmo-

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sphere in Japanese companies still was very much that of a “family” relationship.

Responding to Kamata’s exit interview anecdote, he said, “We may have our problems, just as any family, but Japanese workers are free to speak out.”

Asked directly to comment on the statement in the book, Mr. Mochizuki simply shrugged and said he “didn’t believe it.”

Keisaku Miyazaki of the Osaka Junior Chamber of Commerce described Kamata’s book as “unfair” and said it did not present a true picture of Japanese industry.

Another Japanese businessman 1 quizzed about the book was Masaaki Imai, president of a consulting company in Tokyo called The Cambridge Association.

Mr. Imai was by far the most willing to talk about the Kamata book, perhaps because he is an independent busi- nessman and the head of his own corporation, but he also would not confirm Kamata’s findings. “Journalistic sensa- tionalism” was the way Mr. Imai dismissed the book when I approached him about it, adding that it was not an accurate portrayal of life in a Japanese factory.

When pressed, Mr. Imai did concede that perhaps “some of the younger workers were developing attitudes that differed with those of the older workers,” but he still insisted that Kamata’s book was an “exaggeration of the problem.”

The stand taken by Imai, Mochizuki, Miyazaki and the others I questioned certainly is confirmed by the 383 American employees of the Nissan plant in Smyma, Ten- nessee, who were sent to Japan to view the parent company plant prior to the start-up of the Smyrna facility.

Lee Manning, a production supervisor at Smyma, was quoted as saying that, while the importance of the group is recognized in Japanese society, outsiders are not aware “that the individual is important, too. Each employee in Japan is treated as a person. That is not always true in the U.S.” (Industry Week, May 14, 1984).

Young Japanese workers

Despite the adamant rebuttals from the Japanese managers and executives 1 talked with, and even in the face of the glowing testimonials from Manning and the American workers from the Japanese-owned plant in Tennessee, there is a growing accumulation of evidence that a few serpents are appearing here and there in what heretofore we have all regarded as the Japanese workman’s paradise.

In fact, no less an authoritative source than the office of the Prime Minister of Japan has reported evidence of “serious alienation” on the part of young Japanese workers.

According to a survey conducted by the Prime Minis- ter’s office, writes Lee Smith in Fortune magazine (May 14, 1984), “only 14 percent of young Japanese said they were

satisfied with their workplace as compared with 70 percent in the U.S.”

The Fortune article described one of the key reasons for that disenchantment as resulting from the Japanese prac- tice “of assigning young managers to production or market- ing or whatever, regardless of the employees’ desires.”

John S . McClenahen commented on the changes in the work ethic of younger Japanese in his review (Industry Week, September 5 , 1983) of Robert C . Christopher’s book, The Japanese Mind, stating that

One wishes that Mr. Christopher had devoted more space to the subtle changes that are taking place among Japanese work- ers: Greater risk-taking (including the possibility of changing jobs ten years into a career) and a defensive attitude toward “personal” time (reflected, for example, in greater reluctance to meet after work with other workers in quality control circles).

Another article on changes in the Japanese culture, especially among the younger set, was written by Paul Chesley (For- tune, May 14, 1984). His article emphasizes the frantic pursuit of more leisure time among younger Japanese work- ers, asserting that:

Younger Japanese are willing to put in their designated time in the office or on the shop floor. But unlike their elders, they are not interested in staying a minute longer than they have to. They’re not trying to reform the world. Their greatest expres- sion of rebellion is a simple and apparently healthy determina- tion to get a little fun out of life.

Chesley goes on to point out that they, in contrast to preceding generations, “have never known anything but economic prosperity. Just as their parents studied American manufacturing processes and management techniques during the fifties and sixties, they are emulating America’s skill at making the most of leisure time.”

Whether the extremes described in Kamata’s book are true, the evidence is quite clear that there is serious trouble ahead for the Japanese factories.

Studies of Japanese workers No less than four independent research organizations

have arrived at similar conclusions. For example, Indiana University researchers, in an

eye-opening report appearing in Iron Age (July 23, 1983), found that American workers by substantial margins feel better about their jobs, their companies, and their supervisors than do the Japanese workers questioned in their study.

Even the vaunted Japanese “family atmosphere” comes in second best, with 88 percent of American workers

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compared to only 36 percent of their Japanese counterparts stated that a company and its employees are “like a family to each other.”

More Americans than Japanese were satisfied with their supervisors (78 percent to 50 percent), co-workers (92 percent to 75 percent), and work tasks (83 percent to 53 percent). Some 68 percent of the Americans as opposed to 20 percent of the Japanese said they would return to the same job if they had the choice to make again, and only 5 percent of the Japanese as compared with 32 percent of the Americans said their job measures up to the sort of job they wanted when they were hired.

The findings of the Indiana University group were substantiated in a report from the Aspen Institute for Human- istic Studies, which compared how well jobs meshed with worker values in six countries: Britain, Israel, Japan, Sweden, the United States, and West Germany. Japan scored the poorest of the six, with only 32 percent of the workers indicating such a linkage. Israeli workers gave their jobs the highest ranking, 55 percent, with the American group com- ing in second at 49 percent.

In analyzing the results, the Aspen Institute made a significant comment, which undoubtedly will be good news to other industrialized countries: “The changing value stan- dards of the younger Japanese job holders may well cause significant changes in tomorrow’s Japanese-and world- economy. ’ ’

Another study, this one by the Japan Recruitment Center, a private organization, surveyed 7,800 male college graduates and found that 72 percent were more interested in home and family than in company concerns. This reflects a continuing trend and a 6 percent increase over a similar study a year earlier.

Finally, as reported by author Lee Smith in the For- rune piece cited previously, the Japan Youth Research In- stitute found that young Japanese workers do not mind the daily job but have grown reluctant to put in any overtime, even for participation in the highly publicized quality circles, which are now widely used in America.

Tamotsu Sengoku, the director of the Youth Research Institute, was quoted as saying, in reference to young work- ers, that there is a growing disinclination to work beyond regular hours: “They screw in a bolt and when the clock strikes five, they stop turning.”

There are still other indications that the younger workers in Japan are drifting away from the unswerving loyalty and almost blind obedience that have been at the heart of Japan’s industrial success.

For example, in an attitude survey conducted at the Elmo factory, Japan’s leading projector manufacturer, 10 percent of the employees who responded to the confidential questionnaire answered that they could not “think of the

company’s prosperity as an important part of their own life or as a part of their private life.” Immediately, officials of the company stated that the 10 percent who answered in the negative were undoubtedly “the younger ones in the plant.”

According to Made in Japan (Dusseldorf: Econ Ver- lag, 1971), an intriguing book on Japan by Max Mohl that has been translated into several languages, Japanese managers refer to the attitude of younger workers, those in their twen- ties, as “dorai” (dry), which roughly translates as a mixture of egotism and rationalism. The more conservative and tradi- tional attitudes of the elders are called “wetto” (wet).

What this basically means is that the younger workers are moving away from the collective spirit of the traditional Japanese workers and are taking a more individual-oriented look at their work.

Losing the competitive advantage

Regardless of whether Kamata’s book contains exag- gerations, the evidence seems overwhelming that in the face of ever increasing competitive pressures from the outside and a change in the work ethic on the part of part of young Japanese on the inside, Japan is losing her competitive advan- tage in some industries, especially automotive.

In addition to the evidence already presented here, there are other factors that come into play.

One that will come as a pleasant surprise to many American executives, managers, and supervisors is that the average age of equipment in Japanese plants is older than in the U.S.

That gem of information is provided by Iron Age magazine’s editor-in-chief, Gene Beaudet, in a September 1, 1984, editorial. Beaudet identifies his source as a Japanese business journal, Nihon Keizai Shimhun.

Admittedly the difference is not much, only about three months, and has resulted from a substantial amount of capital investment in the U.S . during 1983. But the study quoted in the Japanese business publication is statistically significant, since it involved 1,224 companies listed on the Tokyo Stock Exchange plus another 1,216 on the New York Stock Exchange.

Beaudet says the big U.S. gains were made in the automotive industry from investments such as the $20 billion spent by General Motors from 1981 through 1983 and from movement toward more sophisticated manufacturing meth- ods by all the Big Three automotive companies.

Interestingly enough, the man generally regarded as one of the fathers of modern day Japanese industry, W. Edwards Deming, who took his ideas to Japan following World War I1 after his advice apparently was rejected by the American auto companies, now is playing a part in the rejuvenation of the U.S. automotive industry.

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“Quality at the source” is one of the fundamentals of Deming’s philosophy and, since quality and productivity are as inseparable as bride and groom, the eight-year-old consul- tant now seems to be “doing his thing” for American auto- mobile companies. In fact, it recently was reported in Indus- try Week (May 14, 1984) that Deming had been retained by the Pontiac Division of General Motors, and by Ford as well.

Whether there is a direct connection this writer can’t say, but Douglas R. Sease, chief of the Wall Street Journal’s Detroit bureau, reports in a recent Journal review of the book Industrial Renaissance, by William J. Abernathy, Kim €3. Clark, and Alex M. Kantrow, that “Pontiac apparently has found a way to assemble a car that matches the precise fits and finishes of the best Japanese products.”

In the same review Sease states that in U.S. auto plants, “labor relations have taken a turn for the better where workers, who knew all along what was wrong with the cars they were building, are being asked for their advice.”

Sease does not make a connection between Pontiac’s improvement and Deming’s involvement, but the improve- ments cited certainly carry the Deming stamp.

Sease also points to improvements in American auto- mobiles themselves:

The products themselves have come a long way from the V-8 powered road cruisers of yesteryear. American cars today sport a variety of technical advances such as front-wheel drive, turbo-chargers and fuel injection, that were almost nonexistent in the industry only 10 years ago.

For years there has been reason to believe that Amer- ican workers can be more productive and turn out better quality than their Japanese counterparts under similar man- agement circumstances. The problem never has been Amer- ican workers. If the finger has to be pointed, then it must be pointed at American management, where cockiness, insen- sitivity, and overinflated egos have gotten in the way of productivity and quality.

Several years ago, two Stanford University pro- fessors conducted an experiment with the help of the Califor- nia division of Sony, the Japanese television manufacturer. The professors set up an assembly line identical to a TV assembly line at the Sony Tokyo plant. They discovered that when they switched to using Japanese supervisors and the participative approach, the American workers were just as productive and in some instances more so than their Japanese counterparts.

Admittedly, it was a small sampling, and the “Hawthorne” factor may have been an influence.

On the other hand, when Nissan officials established their truck plant in Smyma, Tennessee, they were seriously

concerned that the quality of Nissan trucks produced in the American plant would be lower than those made in Japan. To their surprise, they have found that their American workers are turning out a slightly higher quality truck than those produced in Japan. This seems to be supportive of at least some of the points made in Kamata’s book, as well as of other reports beginning to trickle through regarding signs of slip- page in Japanese productivity, quality, motivation, and mo- rale.

A warning It would be nice to end this piece on such a positive

note, but that could be a serious misrepresentation of the situation.

Instead, I am going to close the note of urgent warn- ing expressed by the Journal’s Sease in his review of Indus- trial Renaissance. He cautions that the industrial renaissance envisioned by the book cannot be attained by piecemeal solutions. His concluding words signal the “red alert” for all of us:

The frightening fact is that standards for the U.S. auto industry are being set somewhere else by companies that have mastered both the discipline of manufacturing excellence and the man- agement of innovation. Ironically, i t was Henry Ford’s man- ufacturing discipline and GM’s product innovation that carried the U.S. auto industry into its affluent maturity. But having lost those skills, the industry now must regain them and apply them with a vigor that hasn’t shown in decades. If top manage- ment doesn’t persist in its drive for discipline and innovation, or if middle management balks at the painful adjustments that will be required, the authors hold out little hope; any of these can stop the renaissance in its tracks, turn back the clock, and doom American industry to a new Dark Age of failed competi- tiveness in both domestic and international markets.

The challenge and the opportunity are at hand. One of the areas in which American management is considered superior to the Japanese is the ability to respond quickly. Now is the time to capitalize on that advantage.

George Sherman is vice-president of human resources for Ameribanc, Inc., a bank holding company headquar- tered in St. Joseph, Missouri.

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