managerial careers and management development: a comparative analysis of britain and japan

M A N A G E R I A L C A R E E R S A N D M A N A G E M E N T D E V E L 0 P M E N T:

A C O M P A R A T I V E A N A L Y S I S O F B R I T A I N A N D J A P A N

John Storey Loughborough University Lola Okazaki-Ward and Ian Gow University of Stirling P.K.Edwards and Keith Sisson University of Warwick

Two topics that have become near obsessions in the personnel field are management development and the ‘Japanese model’. Current debates on the former have been reviewed elsewhere (Storey, 1989,1990; Sisson and Storey, 1988), while there are numerous surveys of the latter (e.g Abegglen and Stalk, 1985; Aoki, 1984; Ouchi, 1981). Some studies have also set the Japanese system of training and development alongside that of Britain and other countries (Handy, 1987; Handy et al., 1988). What has been lacking isa directly comparative study looking at the experience of managers in the two countries. Such a study needs to address two of the key limitations in the extant literature (Storey, 1990:7-8). First, there has been a failure to take account of context: innovations in management development have been described with little consideration of how far their operation depends on the context of the organisation in which they are introduced. Second, there is evidently great variation between organisations, but the pattern of this variation, still less the reasons for it, has been largely neglected.

OVERVIEW

We set out to understand how far any national pattern varies according to business structure. As the Appendix describes in more detail, we therefore took four British firms and four counterparts in Japan. Rather than assume a national pattern, we explicitly considered how far practices stemmed from the characteristics of each sector, or from national characteristics, or from an interaction between the two. We also looked at organisational contexts, although there is no room to explore these in any detail here.

A study of management development might imply a focus on training courses and the development function itself. Exclusive attention to these matters would, however, produce a very partial picture. To understand how managers are ’made’, and what meaning training has, requires consideration of the place of managers in their firms, including how they are evaluated and rewarded, what motivates them, and how they themselves judge systems of evaluation and the current state of play on management development. Our starting point was the manager as employee, investigating career and reward systems and placing activities that go under the formal rubric of management development in this context. Such an approach remains rare. Much of the literature in the human resource management area says little about managers themselves. There are only a few sociological studies, notably Scase and Goffee’s (1989) analysis of managers in six British organisations. Consideration of differences between types of firm has been rarer still. Managers have tended to be treated as a group, and even Scase and Goffee devoted little attention to the differences between their organisations.

As for Anglo-Japanese studies, some have compared specific organisations and have thus avoided universalistic assumptions. Dore’s (1973) account is among the most influential. This looked, however, at only two firms, and was thus unable to consider variation between firms in the same country. Like other well-known studies (e.g. Cole, 1979), moreover, it focused on manual workers. There have also been large-scale surveys, such as

33

JOHN STOREY, LOLA OKAZAKI-WARD, IAN GOW, P. K. EDWARDS AND KEITH SISSON

Lincoln and Kalleberg’s (1985,1990) study. This offered valuable pointers, but because it embraced 98 firms it was unable to explore in detail the processes taking place in each; it was, moreover, restricted to manufacturing. We took a position between the large-scale survey and the comparison of two cases and were thus able to explore differences between sectors as well as to see how far findings about manual workers held for managers.

We set out to test existing assumptions about Japanese managers and management development. In terms of career patterns, these are that Japanese managers are better educated than their British counterparts; stay with one firm during their careers and thus have longer service; experience systematic training, and therefore enter management relatively late; and tend to be exposed to a wide array of functional experience, in contrast to the British tendency towards ‘functional chimneys’. Career planning might also be expected to be more systematic in Japan. On training, the Japanese would be expected to enjoy more forms of training, and to spend longer on it, than their British counterparts. This should link to a management development function which is the more coherent and centralised in Japan.

The results confirmed parts of this picture but not others. Crucially, functional experience was reported to be higher in Britain, as was experience of training. We view the former as a ’genuine’ difference, but further investigation reveals that it did not necessarily favour the British, for it pointed to an unplanned ’shuttling’ through several tasks. The latter apparently contradicted all expectations. We can best explain it in terms of the definition of training: Japanese managers untertook numerous activities, often in their own time, which they did not formally count as training. This links with their view of management development, for they stressed not centrally planned programmes but individual responsibility. Such results pointed to a rather more complex view than existing stereotypes, but one which still raised major questions for the effectiveness of development in Britain.

These results are discussed in detail below. We do not report here on the control and evaluation of managers, but these issues are crucial to understanding the overall position of managers and we draw on our findings in the conclusions, where we also comment on the implications for the future. The Appendix explains why we chose Japan and the rationale for the focus on four sectors, which were electrical engineering, banking, retail stores, and a public utility. It also describes the selection of the sample and the research methods used.

MANAGERIAL LABOUR MARKETS

Education and Entry into Management

In terms of their background characteristics, the two samples conformed to general expectations. As Table 1 shows, the Japanese had much the higher level of educational qualifications. Not one of the Japanese managers had entered the labour market before the age of 18, whereas this has been the experience of 45 per cent of the British. Almost all (94 per cent) of the Japanese had degrees, as against less than half the British (42 per cent). But there were also significant variations within Britain. As would be expected, many of the bank’s managers had joined at age 16 or 18, and only 7 per cent of the sample had a degree, whereas in BrengCo 83 per cent of managers had a degree or a post-graduate qualification. The table also confirms the practice of life-time employment in Japan, with all the managers in three of the companies having worked for only the one firm. The exception was Jshop, where one

34

MANAGERIAL CAREERS AND MANAGEMENT DEVELOPMENT: A COMPARATIVE ANALYSIS OF BRITAIN AND TAPAN

TABLE 1 Educational Qualifications and Careers in Management

BrengCo JengCo Britbank Jbank Britshop Jshop Brutil Jutil AU

Highest - Educational Oualification (per cent)

'O'Levelorbelowa 10 0 66 0 32 0 27 0 20

'A' Levela 7 0 27 8 32 11 10 4 13

Degree 45 73 5 88 36 89 53 64 53

Postgraduate 38 27 2 4 0 0 10 32 14

Ape of First Full-time lob (per cent)

Under 18 years 23 0 71 0 35 0 52 0 26

18-20 years 10 0 20 8 39 4 18 4 13

21 yearsandover 68 100 10 92 27 96 30 96 61

Age of First Management Appointment (per cent)

Under 26 years 31 0 0 0 81 11 54 0 22

26-29 years 53 0 7 0 19 46 18 20 20

30-35 years 16 18 63 33 0 35 12 68 31

36-40 years 0 82 29 67 0 8 15 12 26

Career Mobilitv (per cent)

Thiscompanyonly 58 100 88 100 19 82 76 100 78

1 or 2 others 26 0 10 0 42 15 21 0 14

3 or more others 16 0 2 0 38 4 3 0 8

Mean Length - of Service (vears)

16 20 27 20 12 17 22 16 19

Note: a In Japan, the closest equivalent to '0' Levels is raduating from junior high school at age 15, while 'A' Levels equate to gra % uating from senior high school.

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in five of the sample had worked elsewhere; this reflects rapid growth in the firm during the 1970s, which meant that the internal labour market could not supply all the managers needed. Interestingly, among the British firms, it was also in the store that managers had the greatest amount of experience in other companies, confirming our expectation that the British retail sector would be marked by a high level of mobility and suggesting that this may also be true in Japan. The table also confirms the pattern of strong internal labour markets in Britbank and Brutil.

The Japanese did not, however, stand out in terms of the length of their careers with their present companies. There were no statistical differences between the countries, but there were differences between sectors, with the banks being marked by long careers with the firm; Brutil was also marked by a high average length of service. This lack of national differences is at first sight odd, given lifetime employment in Japan. Part of the explanation is the later age of entering the labour market in Japan: a 40-year-old might have left university at 22, whereas a British manager of the same age could have joined his present firm at the same age after four or five years with other employers. (We will speak of a manager as 'he' since there were only seven women - six British and one Japanese - in our sample, and we are thus unable to say anything about the interesting issue of women in management.) A second factor, which came out of several of our interviews with British managers, was that it was quite common in Britain to try out several employers before settling with one. In his early years a man might move around relatively undecided as to where he would end up. This was much rarer in Japan.

As for age of appointment, it is generally known that a long period of training precedes the first full managerial job in Japan. Our results confirmed this, though also revealing sectoral differences. There were statistically significant differences between the British and the Japanese sample within each of the four sectors. But again there were clear sectoral effects with the stores in both countries being marked by an early age of appointment to management. That said, the Jshop sample entered management at a younger age, on average, than managers in Britbank, suggesting that universalistic national stereotypes are inapplicable. None the less, the Japanese pattern confirms what senior managers told us about their development systems, namely, that a cohort of entrants would progress together through a highly structured career path and that this would operate not just for a year or two but for many years, at least, usually, until they reach the junior management level. Even well into their careers, managers would compare themselves with colleagues who had joined in the same year, using the peer group as a benchmark against which to measure their own progress.

Functional Experience

This leads to the first major surprising finding. With evidence of highly structured careers, and in view of the general image of Japanese managers as being trained in a wide variety of functional skills, a reasonable expectation would be that these managers would report more functional experience than their British counterparts, who are often seen as being stuck in narrow specialisms. We gave the sample a list of twelve broad functions, and asked whether they had ever worked in each. The distribution of replies is shown in Figure 1. In engineering and banking the British samples reported the greater number of different

36

MANAGERIAL CAREERS AND MANAGEMENT DEVELOPMENT: A COMPARATIVE ANALYSIS OF BRITAIN AND JAPAN

FIGURE 1 Number ofManagenient Functions Ever Worked In

Number

3.75

2.63

0 Minimum - Maximum

_ _ _ _ _ Mean

. - - - 2.88 2.05

2.56

2.08

w BrengCo JengCo Britbank Jbank Britshop Jshop Brutil

3.60

u Jutil

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functions, in stores the figures in the two countries were similar, and only in the utilities was the Japanese figure higher.

There are several possible explanations of this result. One is that Japanese companies simply recognise fewer distinct functions than their British counterparts, with planning, say, not being given a separate label. We checked this by looking at each of the twelve functions in turn. For six of them, at least one manager in every company reported having worked in it in the present organisation. On the seventh, finance, it was the British who stood out: no manager in Brutil had worked here. On two, production and maintenance, two Japanese companies, Jbank and Jshop, had no representatives; and on two, purchasing and quality assurance, this was the case with one British and two Japanese firms. On only one function was there a clear national difference: in three Japanese firms, no manager reported having been a ‘management trainee’. Graduates hired through the head office will in fact be undergoing training, sometimes for ten or fifteen years, before their first managerial appointment; but this period would be seen as a stage in career progression, not a distinct function. We thus re-calculated the figures excluding ’management trainee’, but the pattern of replies remained unchanged. We also looked at the figures another way, examining, for each function, whether more British or Japanese managers reported having worked in it. As would be expected, the British figure was higher for management trainee, and it was also higher for administration. But the Japanese reported more experience of finance, sales, and personnel. This suggests that the figures were not distorted by national differences in the definition of a function.

Nor did the answer lie in the distribution of the replies. A high British average could be due to a few people citing very high levels of functional experience. In fact, in all companies the distributions were approximately normal, and as Figure 1 shows, the maximum number of functions quoted did not differ very much between countries. We also examined the pattern by the age of starting on management, to test the possibility that Japanese managers, starting late, had the chance to practise relatively few functions. In fact, the British lead held within each category of age of taking up the first managerial appointment. We conclude that the results are robust, and must seek some other explanation for them.

In the case of the banks, part of the answer may lie in the definition of job titles in Britbank. A normal part of a career path would involve a spell as ’administration manager’ in a branch, a job concerned with personnel and routine matters internal to the bank, as distinct from relations with customers. Managers in Britbank might thus say that they had worked in personnel or administration, when their Japanese counterparts might not. A second explanation applies to the banks and also to the engineering firms. In JengCo there was a long-established policy of rotating managers between jobs to broaden their knowledge of the company, but this did not necessarily imply a change of function: an accountant, for example, might move from one division to another while remaining in accountancy.

Though revealing significant sectoral variations, these findings clearly suggest that it would be wrong to see wide functional experience as central to Japanese practice. Manag- ers were certainly rotated through different jobs, but this did necessarily imply working in separate functions. Whether the experience gained by the British managers was beneficial to them is, moreover, questionable. As shown below, there were concerns that career planning was weak, and, as some of our interviews intimated, those British managers who

38

MANAGERIAL CAREERS AND MANAGEMENT DEVELOPMENT: A COMPARATIVE ANALYSIS OF BRITAIN AND IAPAN

left school young and worked for several employers are likely to have moved around a number of functions in a relatively aimless manner. In any event, simply having worked in separate functions does not make a person into a rounded manager: Japanese managers were thoroughly educated in the goals of the firm and could take a company-wide perspective despite specialising in a particular area, whereas ’functional thinking’ was arguably more prevalent in Britain.

Career Planning and Career Paths

Results on career planning were even more startling. Our general expectation from existing studies was that Japanese firms would plan the careers of their managers much more carefully than would their British counterparts. We collected information which bore this out, with all our Japanese firms having clear and often long-established systems for groom- ing their managers. Jshop for example was particularly famous for its attention to career development. Yet, when we asked managers whether there was ‘any system of career planning’ in their firms, under 30 per cent of the Japanese managers said that there was. As Table 2 shows, there were marked differences in three of the four sectors, with the British

TABLE 2 Career Planning and Career Paths

BrengCoJengCo Britbank Jbank Britshop Jshop Bmtil Jutil All

~~~~ ~ ~~~ ~~~ ~ ~~ ~ -

Presence of Svstem of Career Planning

Yes, and:

Worksvery or uite well 9 21 63 24 35 15 0 22 25

8Jorks p l y or unsatis actonly 44 0 27 4 17 7 24 11 18

No 39 52 5 64 42 63 64 54 45

Don’t know 9 28 5 8 8 15 12 13 12

Clarity of Career Paths

8 14 Clear 3 10 32 4 23 7 15

Broadlyrecognisable 36 28 42 12 35 26 39 68 36

Traces 32 41 24 56 19 52 33 20 34

None 29 21 2 28 15 15 9 0 14

(Other reply) 0 0 0 0 8 0 3 4 2

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managers being more likely to report the presence of a system; the difference between the banks was particularly marked.

The reason for this suggested by our interview data is that Japanese managers tended to see career planning in personal terms: they seemed to read the question as asking whether there was any means for them to plan their careers. Many answered that there was no such means because their job moves were planned by someone else. Moves commonly took place with little notice and with no chance to have one’s own wishes taken into account. A manager would certainly know that the norm was to stay in a certain position for so many years and would thus be able to predict when he would be moved; and he might have some idea of where he might go. But he would have no direct role in making the decision. This is consistent with one of Lincoln and Kalleberg’s (1985: 754) observations. They point out that the celebrated ringi system of decision-making, wherein a junior manager drafts an initial proposal and other managers then amend and eventually endorse it, apparently involves a high level of delegation of authority. Yet, in fact, this system integrates managers into the company while offering little real decentralisation of authority. In like manner, we found little real choice for managers in their career development.

We also asked those who felt that there was a system of career planning how well it worked. Given that many saw no such system, the numbers here were small but the pattern was indicative. There was a tendency, which in engineering and utilities was statistically significant, for the Japanese to report higher levels of satisfaction. For example, all six of the JengCo managers replying said that the system worked very or quite well; by contrast, thirteen of the seventeen BrengCo managers said that it functioned fairly or very unsatisfac- torily.

All four Japanese firms were thus similar, with few managers seeing what they defined as career planning but with this minority being reasonably satisfied with the system. In Britain, there was wide variation. Managers in the bank were most favourable, followed by those in the store; in the other two firms, most managers denied the presence of a system or felt that it worked badly. BrengCo had, during the early 1980s, abandoned management development in the fight for survival and had only recently given it serious attention, while in Brutil major changes associated with privatisation, and before that commercialisation under public ownership, had disrupted traditional career paths and promotion expectations.

Replies on the presence of career paths show a similar picture. In banks and stores, British managers were more likely to perceive the presence of such paths than were their Japanese counterparts. In the other two sectors there were no significant differences, reflecting the dissatisfactions of the British managers as compared with those in Britbank and Britshop. For further analysis, we collapsed the four categories of career path into two: ’clear or broadly recognisable’ and ‘intermittent traces or no recognisable paths’. The only loglinear model that worked was the most complex one representing interactions between all three variables. What this means is that the pattern of replies depended on which individual company a manager came from. As Table 2 shows, there was no clear tendency for the banks to have a common pattern, or for the British firms to differ as a group from the Japanese. The perceived presence of career paths was thus highly company-specific: there was no British or Japanese model.

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Conclusions

This last finding links with our other results: the meaning of a 'career path' differed between the two countries, but within Britain there were also sharp differences in the extent to which managers felt that their firms offered systematic career planning. Japanese structures of career development were long-established, and career moves were carefully planned. But such moves did not necessarily involve changes of function, and they were perceived by managers as allowing little freedom of choice.

MANAGEMENT DEVELOPMENT

If there is one area in which sharp differences might be expected between Britain and Japan it is that of training and development. The poor training record of British companies is legendary. In fact, we found that in some respects our British sample reported more training than did their Japanese counterparts. The key differences lay in the less-discussed area of how managers develop and of who should be in control of the process.

Training and Development

We began by asking about experience of seven different forms of training and development such as courses, on-the-job training (OJT), and mentoring or coaching. We asked whether each existed in the organisation, and whether the manager had personal experience of it; we focus here on the latter. We calculated the mean number of activities reported. The surprising result (displayed in Figure 2, with organisations grouped by country in order to highlight the national differences) was that in each of the four pairings the British managers claimed a greater range of experience than did their Japanese counterparts. This might be attributed to a preponderance of replies on one or two categories, but the British lead was present on each of the seven aspects separately. Most surprisingly, the difference held up even with respect to the supposed forte of the Japanese, on-the-job training.

Managers were also asked to say whether each activity that they had experienced had been very or fairly valuable, or not valuable. We gave a score to each reply and added these together to form an index of satisfaction with training. As Figure 2 shows, the British figures were higher. There were no sectoral differences on this measure. Particularly notable was the individual score for OJT, where differences were the most pronounced, with managers in BrengCo and Britshop being especially favourable as compared with their Japanese counterparts.

The perceptual aspects of these differences are the easier to explain. It may be that the Japanese take OJT for granted and hence do not report very great enthusiasm about it. In Britain, where OJT is a novelty, managers are more likely to contrast it with a past absence of such activity. BrengCo offers the clearest example here: following a virtual abandon- ment of senior management attention to training and development during the early 1980s, the topic had been given renewed emphasis from the middle of the decade, and our managers responded favourably. Cultural differences may also have been at work. We have so far focused on issues of fact, but we are now dealing with perceptions, and it is well- known that Japanese respondents report lower levels of job satisfaction than do Americans or Britons. Lincoln and Kalleberg (1990:50) also note that the Japanese are less likely to use extreme replies, preferring more non-committal responses. The latter problem was proba-

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FIGURE 2 Experience of Training

NumbedScores

-

.46

0 No. methods exp’d - - - - - - Value of training

-

1.36

T

-

.14

T

-

L32

T BrengCo Britbank Britshop Brutil JengCo Jbank Jshop Jutil

Note: Value of training scores run from zero to 2; high score is favourable.

42

MANAGERIAL CAREERS AND MANAGEMENT DEVELOPMENT A COMPARATIVE ANALYSIS OF BRITAIN AND TAPAN

bly not serious in this case, but the pattern in relation to job satisfaction studies may also have been at work here, with the Japanese being relatively self-critical and thus reluctant to report that training had been very valuable to them.

But if the Japanese take OJT for granted, why did they not report its presence more often? Precisely because OJT is built into management development in Japan, managers there may not be able to think of a specific occasion on which they have been exposed to it. British managers, by contrast, may have had lower thresholds of awareness of what constituted a significant training experience. Certainly all the general information on systems of management development that we collected suggested that systematic training and development was widely practised in Japan.

We also asked about the total amount of time spent on training, asking managers to state the annual average number of training days that they had experienced over the previous two years. Higher figures were reported in Britain in three of the four sectors; in the fourth, stores, the Japanese reported very high figures but since the sample was drawn from managers going through a training programme we cannot place much reliance on this figure. At the other end of the scale, 61 per cent of JengCo managers reported that they had had spent less than one day per annum on training.

It goes against all expectations to find that managers in a large Japanese firm should report such low levels of training. We were surprised at the result, though we can see how it came about. The question on training days put to the Japanese managers asked specifi- cally about training off the job (offJT). They would probably think of courses arranged by the company for them to attend. Other forms of training, particularly of a self-development nature, may not have been counted, even though our interviews indicated that these were often very extensive. It was, for example, common for managers to spend Saturdays in such ‘voluntary’ activity. Training may thus have been seen as less of a discrete activity than it was in Britain. This certainly fits with our results on other forms of management development.

Other Developmental Experiences

We asked respondents about ’the most influential factors which helped you personally to grow as a manager’, asking them to choose three from a list of twelve. Replies on a selection of the most frequently chosen are shown in Table 3. Two were heavily checked, in both countries and across all sectors, namely, ‘a wide experience of challenging assignments’ and ‘early exposure to a responsible position’. This accords with what is now conventional wisdom on the subject (Margerison and Kakabadse, 1985). But there were also significant differences. Role models in the present organisation were seen as more important in Japan than in Britain; for example, three-quarters of the Jbank sample cited this, as against one quarter of Britbank managers. Mentoring was also mentioned rarely in the British firms, with the partial exception of Britshop (where some efforts had been made to give each manager a guide or adviser about career development). Though the Japanese did not value mentoring when asked about it in general terms, they were able to cite mentors as having been important to their own development. The fact that few British managers could do so suggests that, their general keenness notwithstanding, it had not yet cut very deep at the level of practical experience.

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The fact that the British were more likely to stress challenging experiences than they were to cite role models, while in Japan the reverse was the case, raises the possibility that the British replies point to a ‘school of hard knocks’ or a ’sink-or-swim’ approach to management development. In the interviews, several British managers spoke of being thrust into jobs for which they had had little preparation; though they had found the challenge to be useful, others will have been unnerved by the experience. One correlation with the mention of challenging assignments is indicative. In Britain, those citing this factor were also likely to have worked in more functions than those who did not mention it, but in Japan there was no such association. This suggests that, in Britain, moving between functions can be perceived as valuable, but the other side of this is that some managers will be unable to cope with the challenge, and that even for the successful the result depends strongly on good fortune. In Japan, managerial resources were used more systematically.

An important implication arises. Current thinking in management development circles is that a wide range of experiences and early exposure to leadership positions are not only very common in Britain and North America but are also to be recommended as proven ways to develop potential (Margerison, 1985; Margerison and Kakabadse, 1985). Yet our Japanese findings show that a mentor and a role model were often more important than either of the most quoted factors. It may be that the Anglo-American ’top two’ merely reflect a failure to provide more appropriate methods.

The Management Development Function

This leads on to the question of the importance given to management development. We asked the sample to rank statements about this activity on a five-point scale. We have combined four of them into an index (a fifth, being a general statement rather than one about the particular organisation, was excluded from this particular index). Scores on the index, together with the distribution of replies on one of the items, are given in Table 4. As with assessment of the value of training, we are dealing with perceptions here. Cultural factors do not seem to have affected the results: the Japanese came out as the more satisfied, and they were the more prone to use the whole range of answers.

Overall, managers felt that management development was treated seriously: 60 per cent agreed or strongly agreed that it had a high profile in their organisation. Those in the banks were the most satisfied, while those in Brutil stood out as being particularly dissatisfied. Analysis of the overall scores showed that there was a country effect, with the Japanese managers being the more satisfied, but there were also clear sectoral differences. As would be expected from the basic figures, there was also an interaction effect: the scores for BrengCo and Brutil were less favourable than is explicable by country and sector effects alone. This reflects the fact that, in both, management development had only recently been made a priority: there was a widespread feeling that many new initiatives were being made but that these had yet to have a real impact in practice. The other two British organisations had been through much less disruption, and both were giving considerable attention to developing their managers, and these efforts were plainly appreciated.

Though our bank and stores samples were similar between the countries in how much weight they felt that their organisations gave to management development, there were sharp differences in the way in which the activity was carried out. We listed seven possible

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TABLE 3 Factors in Growing as a Manager

BrengCo JengCo Bntbank Jbank Britshop Jshop Bmtil Jutil All

~ ~ ~~

Education 38 7 15 8 19 0 42 4 18

Family 9 10 7 8 7 0 12 4 8

Role model 15 70 27 75 19 54 18 44 38

Mentor 3 53 0 50 23 54 6 52 27

Wide experience of life 19 6 24 17 19 4 33 20 19

Challenging assignments 66 70 71 50 46 54 52 48 58

Earlyresponsibility 69 40 44 29 73 54 36 76 52

Note: Figures are percentages mentioning each item; managers could cite up to three.

TABLE 4 Perceived lmportance of Management Development in Organisation

BrengCo JenpCo Britbank Jbank Britshop Jshop BNtil Jutil AU

Summarv Index Scores (1= favourable: 5 = unfavourable)

Mean 3.05 2.35 2.52 2.21 2.45 2.38 3.51 2.61 2.67

Per Cent Responses to 'ManaEement Development Has a Hiph Profile in This Organisation'

Strongly agree 9 20 15 17 15 38 3 12 16

Agree 25 33 63 62 61 46 15 52 44

Uncertain 31 40 10 21 4 12 21 12 19

Disagree 31 7 7 0 19 4 45 24 17

Strongly disagree 3 0 5 0 0 0 15 0 3

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bases of responsibility, such as the personnel department, a special management development department, heads of department, and the individual, and asked managers to say which three were currently responsible for management development and which three should be responsible. As Table 5 shows, national patterns differed considerably. The Japanese gave particular weight to departmental heads and to the individual, followed by the personnel department and each line manager; this applied to both the current and the desired situation. A special development department was given little emphasis. In Britain, the individual received less emphasis. The two organisations, BrengCo and Brutil, where individual responsibility was mentioned the most were also those where management development was felt to be the weakest, which suggests that the job of the individual was seen in terms of being left alone to make the best of the situation rather than any very positive view of individual opportunity. A development department, and in two organisations a special executive team, received much more emphasis than was the case in Japan.

The stress on the individual in Japan contrasts with the absence of individual choice in career movement. This suggests a situation in which the company moved managers around but they themselves were responsible for developing their own skills and becoming as versatile as possible. As mentioned above, in interviews, several cited the ‘voluntary’ Saturday training sessions: going to one of these was an individual developmental responsibility which would increase the manager’s chances of promotion. In the questionnaire we also asked managers about their key training needs. Leadership skills were placed first or second in every Japanese company, and in total 39 per cent of managers cited such skills, as against 17 per cent of the British sample.

To assess how far the actual and the desired situations on responsibility for management development were consistent, we compared replies on the two aspects. Anyone saying that a function was and should be responsible can be taken to be satisfied with its role. Someone saying that it was responsible, but not mentioning that it should be, thinks the role has too large a say; and someone saying the reverse thinks the say is too small. We omit those saying nothing about a function’s role. The difference between the proportions saying that a function’s say is too large and too small indicates the balance of views. Thus in BrengCo, 47 per cent of those mentioning the personnel department at all thought that its role was about right, 41 per cent said it was too high, and 12 per cent that it was too low. Table 6 displays the ’too low’ and the ’too high’ figures in each case in which there were sufficient numbers to make the comparison meaningful. The results are best discussed for each organisation in turn.

In BrengCo there was a clear balance of views that the role of the personnel department was too great at present, while that of a special executive team was too small; there was an interesting difference of opinion on the role of the management development department, with a third of those expressing a view wanting it to do more while a third wanted it to play less of a role. This pattern reflects recent change in the organisation: managers knew that initiatives were under way but seem to have wanted more senior commitment while there was a difference of view as to what the management development department could do. In Jengco there was, by contrast, general satisfaction with the current balance, a point which also applies to the two banks. In Britshop, managers sought a reduced role for personnel and more activity by senior managers and the management development department. As

46

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83

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61

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19

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26

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per

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it p

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sho

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. B

lank

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at n

umbe

rs w

ere

too

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l to

com

pute

per

cent

ages

. T

he to

tal c

olum

n in

clud

es re

sults

not

giv

en s

epar

atel

y.

MANAGERIAL CAREERS AND MANAGEMENT DEVELOPMENT A COMPARATIVE ANALYSIS OF BRITAIN AND JAPAN

with BrengCo, this seems to have reflected recent developments, albeit of a different kind. Britshop grew rapidly during the 1980s and also improved its general reputation. Manag- ers felt satisfied with this growth but somewhat uncertain where the company was going. Linked to this was awareness that they had been able to rise rapidly, and several of our sample had reached senior level by their mid thirties, but, with the rate of growth slowing and with the number of jobs to which they could aspire narrowing, managers were beginning to ask where any direction for the future could be found. In Jshop, by contrast, the clear concern was to reduce the role of the individual. This reflects one distinctive feature of Jshop, namely, that it had moved away from the standard system of promotion according to seniority, to place more weight on merit. We found that managers here were the most dissatisfied with the system used to evaluate their performance. The present finding connects with this, suggesting that managers were unhappy with these unusual arrangements and preferred a more structured and predictable system. Finally, in Brutil the wish was for more activity from the management development department, for reasons akin to those applying to BrengCo, while in Jutil there was little clear interest in change.

These results suggest that, in general, the Japanese companies used a more devolved approach than their British counterparts, with the role of the individual and the immediate superior being stressed and with specific departmental responsibilities being played down. This probably reflects the country’s established history of training and development, which has permitted an understood structure to evolve in which specialist departments are needed only to set the overall shape of the approach. In Britain, there was more reliance on an interventionist and institutionalist approach, which was established in the bank, reasonably successful in the store, and only really beginning to develop in BrengCo and Brutil.

A key implication is that, in the absence of a supporting culture, or at least some measure of consensus about the role of training and development, a ’leap’ towards devolved responsibility in Britain could be premature and liable to the neglect of training. Neglect seems to have characterised several British companies. To correct for this, a general ’clawing back of responsibility to the centre is evident; this was certainly the case in three out of our four British cases, while in the fourth, the bank, the function was already highly centralised.

CONCLUSIONS

This study has produced some apparent surprises, notably around the reported absence of career paths and low level of formal training in Japan. There is an important point here concerning the nature of cross-national comparisons. We have shown that the idea of a ’career’ may carry a different interpretation in Japan from that in Anglo-Saxon countries, with the personnel department typically moving managers without the individual having any real say in the process. One conclusion might be that such cultural differences vitiate the type of analysis that we have attempted. We think that some rather more interesting conclusions emerge.

First, our results are consistent with similar exercises. The most methodologically sophisticated is Lincoln and Kalleberg’s (1990) study of satisfaction and commitment (the latter being measured by questions about loyalty to the firm). These authors show that the questions tapped the same initial surprises, notably that commitment was consistently

49


lower in Japan. Further analysis explained this curious result. Low satisfaction in Japan (itself stemming from high expectations rather than active discontent) tended to reduce commitment, but once this effect had been controlled for, commitment was indeed stronger in Japan. In short, standard instruments can be applied, but they have to be interpreted in the light of organisational and national contexts.

Turning to our own results, large parts display no cultural variation. We found, for example, that managers in Britain and Japan were identical in how closely they felt that they were monitored by their superiors. On other areas there were cultural differences, particularly in the ways in which the Japanese saw career planning as an individual responsibility and hence denied its existence. This is a finding of some significance. It was well-known that Japanese firms practise systematic career planning, but little was known about how managers themselves viewed the process. Our managers' responses would not necessarily have been expected. They plainly do not show that planning was absent, and they point in quite a different direction from that which we had expected when we framed the question. Future research might well build on this result to investigate just how Japanese managers view the idea of 'career' and how they respond to a situation over which they themselves have little control.

Our own results throw some light on this topic. We asked managers to rate the system used to evaluate their performance on six dimensions. The summary scores revealed no national differences, with industrial sector being the main source of variation. Those Japanese managers who criticised the system stressed its subjectivity, impersonality, and lack of feedback to the manager being appraised. As with career planning, there was a well- developed system in place, but it was used to help the central planners to allocate managers to tasks, and not to give the individual a say in his own development.

These findings give some idea of the pressures under which Japanese managers la- boured. As we noted at the outset, management development is often described in bland terms, as though corporate and individual interests were as one. Our results point to a more complex picture. Japanese managers certainly wanted to succeed, but in doing so they were given little control of their own careers and the fact that they were expected to move between jobs at short notice could also create tensions between their work and domestic lives. In Jshop there were the added demands of merit-based promotion, which led managers here to be the most discontented with the evaluation system of all our samples. Pressures in Britain were of a rather different sort. Managers were competing in a less structured and predictable environment in which opportunities could be opened up or closed off rather randomly. As Dopson and Stewart (1989) suggest, managers have been facing growing responsibilities as firms have devolved decision making, but they have also become increasingly accountable for their actions. The pressure in Japan was to operate within a tightly regulated system, shaping self-development to meet corporate needs. In Britain, it was to find one's way through a less predictable environment in which individual talent could be rewarded but in which the rules of the game were sometimes obscure.

One indication of awareness of pressures came in replies to a question about current changes. An area that we highlighted was the opportunity for promotion. Overall, 49 per cent felt that opportunities in their organisation were decreasing, as against 18 per cent who perceived an increase. The largest majorities perceiving a decrease were in Britbank and

50


JengCo, and only in BrengCo was there a small balance in the opposite direction. If these expectations turn out to be justified, problems of blocked promotion routes may heighten the salience of career progression. There was, moreover, a clear association between perceptions of promotion and attitudes to the evaluation system and to management development: those seeing promotion opportunities as decreasing also tended to be dissatisfied with the evaluation system and to say that their organisation gave management development a relatively low profile.

So what can be learnt from Japan? Management development was evidently handled in different ways in the two countries, and aspects of the Japanese system cannot be ripped from it. But we have been able to identify issues pertinent to each company. We have noted above the balance of replies as to who should be making the running, with managers in three of the British firms seeking more active guidance from senior executives or a management development department. In the fourth, Britbank, no such clear views emerged, but it would be a mistake to conclude that managers here were satisfied. In interviews, several expressed frustration at what they saw as a stifling of their talents and a central bureaucracy that was unresponsive to change.

There was a similarity here with the Japanese firms, where satisfaction with the organisation of management development went along with awareness of the lack of individual input to career planning. This had not evoked great discontent, and it was more or less taken for granted, but giving individuals more say may be an issue with which Japanese organisations have to grapple in the future. The experience of Jshop is instructive, for reliance on merit had produced some clear signs of discontent, notably the strong balance of views that the role of the individual in management development should be reduced. Jshop had replaced the anonymity of seniority with the uncertainties of a meritocratic system which remained heavily centralised. Whether it is possible to square the circle of central direction and individual choice is the dilemma facing this company. In terms of Mumford’s (1987) classification of types of management development, the Japanese firms fell between ’Type 2’ (integrated managerial, which has clear objectives and is owned by managers) and ’Type 3’ (formal management development, which is also clear and structured but is owned more by developers).

With the exception of Britbank, the British firms were coming at this issue from a tradition of weak central policy. In BrengCo and Brutil there was a strong sense that more organisation of the management development function was required; in Britshop, managers recog- nised that a good deal had been done but still felt uncertainty about the future. Given the general situation on career planningin Britain, it is not surprising that managers in Britbank were relatively satisfied. None the less, the frustrations mentioned above suggest that the organisation may have to come to terms with another aspect of the British environment, namely, the image of the active manager as hero and the need to create an environment in which the individual can shape his (and sometimes her) destiny. The Japanese firms were approaching this issue from an even more centralised tradition. With the exception of Jshop they had yet to tackle it directly and it was probably not seen as a central issue of the moment. Yet the fact that managers here did not stand out sharply from their British counterparts in terms of their satisfaction with management development, and were not distinguishable at all on views of the evaluation system, suggests that there may be some

51


issues beneath the surface that will warrant attention. The aim of this article has been to lay out information and not to prescribe remedies. But

if there is one lesson to be derived from the Japanese evidence it is that Japan does not have a management development system which is free of tensions or which can be simply emulated. As noted above, the British context is different and a devolved approach may be counter-productive. Japanese firms may also have to consider, in the light of evidence that their managers were not particularly satisfied, the ownership of development activity and the extent to which they can increase individual choice. The case of Jshop illustrates the tensions involved. Like British firms, Japanese companies will have to manage the issue of careers and motivation, and it is the way in which they do so, rather than the exact development techniques that they deploy, which may offer lessons for Britain.

How far systems of management development will change is, moreover, likely to depend on the external context, and not on the details of the systems themselves. In Britain, the late 1980s provided a favourable environment: firms had recovered from the recession and the importance of using human resources as a major element in long-term development became almost a cliche. In BrengCo, for example, the importance of systematic management development was proclaimed from the highest levels of the firm. Yet pressures of short-term financial success did not disappear. With the prospect of economic down-turn in the 1990s, reports rapidly appeared that firms were cutting back on training budgets (e.g. Financial Times, 3 December 1990, p.19). The phenomenon of managerial redundancy also re-emerged, with Brutil for example announcing a substantial programme of job losses. Of our four British firms, BrengCo and Brutil were plainly the most vulnerable to pressures on developmental activity. In so far as each had made significant efforts during the 1980s, however, they were probably better placed than many other firms. Unless the lessons of the early 1980s have been learned, career planning and systematic management development in the 'average' British company may prove to have a fragile and uncertain future.

APPENDIX RESEARCH METHODS

There were several reasons for choosing Japan as the basis of our comparison. In so far as Japanese management development has been more systematic than that in Britain we certainly hoped to find a challenging set of comparisons. More important was the fact that in both countries management development is very largely the responsibility of the company. The typical large Japanese firm recruits its managers directly on graduation from the leading universities and then trains them to suit its own needs. There is less of a role for the state than is the case in, say, France or Germany. A key rationale was the prima facie similarity between recommended practice in Britain and actual developmental activity in large Japanese companies; such firms are widely felt to deploy planned systems which incorporate the formal and informal methods of development identified by Mumford (1987) as pertinent to Britain. More pragmatic reasons for the choice included the presence, at the time the study was initiated, of the British and Japanese researchers in the same university. This enabled us, we think, to develop a genuinely comparative perspective, with team members working closely together in research design and in fieldwork.

We chose four sectors to represent a range of contexts. First, we took an internationally competitive industry, electrical engineering, where we could contrast a possibly market-

52

MANAGERIAL CAREERS AND MANAGEMENT DEVELOPMENT A COMPARATIVE ANALYSIS OF BRITAIN AND TAPAN

driven and short-term approach in Britain with a longer-term emphasis on management development in Japan. This is also a sector in which Japan has been extraordinarily successful in world markets. One outstanding feature of Japan is the so-called lifetime employment system. Yet some British firms have also used internal labour markets, perhaps none more so than the banks, where until recently it was virtually impossible to move between employers during a career. In order to make comparisons controlling for the effects of de fucto lifetime employment we therefore included two banks in the study. The retail sector offers a strong contrast, for, in Britain at least, it has had a managerial labour market characterised by frequent changes of employer. We chose the sector partly for this reason and partly because retailing is one of the industries in which British firms claim to be world leaders in terms of efficiency and profitability. We thus aimed to make a comparison in which differences could not be written off to ‘British weaknesses‘ or ’Japanese success’. Finally, we chose two recently privatised public utilities to take account of the tradition of public sector employment, which in the British case included an internal labour market as strong as that in the bank, and to see what differences privatisation made in the two countries. We studied the Japanese firms in Japan and made no attempt to include satellite operations in the UK.

Two approaches were possible to the choice of British firms. We could seek ’typical’ or ‘average’ cases but this would have the problem, quite apart from deciding just what is typical, that any differences from Japan might be explained away in terms of relative success. We wanted as strong a comparison as possible with Japan and therefore took the second route of studying firms which, while not necessarily seen as industry leaders, were well-regarded and had been active in the management development field. Any difference between ’above average’ British firms and their Japanese counterparts is likely to be magnified if all British firms are considered.

SAMPLE

The four pairs of firms were closely comparable. The two engineering firms produced similar products and used similar technologies; they even had one or two joint ventures in various parts of the world. The retailers were multiple chain stores with an emphasis on superstore grocery retailing. The public utilities sold the same service and had both enjoyed a long-standing monopoly until privatisation. The Japanese bank, however, was substan- tially smaller than its British counterpart. It did, however, have a structure of branches, and, in so far as banking is a reasonably uniform activity, there are no obvious factors vitiating comparison here.

In each case we began by interviewing senior managers in the organisation about its business environment and its objectives in management development. We then studied a number of managers who were the ‘subjects’ of development. These managers did not constitute a random sample for they were identified in co-operation with the organisations. They were, however, broadly representative of the business sectors in which each organisation operated. The managers also covered a range of levels. The exact distribution varied between organisations, but generally they were in the middle and upper ranges of the hierarchy. To maximise comparability, we focused as far as possible on distinct operating units, such as managers of bank branches and superstores. Since we chose the samples in

53


similar ways, the results are broadly comparable even though they are not truly representative.

We carried out some tests for any effects of different levels of management. We coded each manager as ‘senior’, ’middle’ or ’junior’ and tested this variable against our independent measures; there were few associations, which suggests that the results are not vitiated by differences in the structures of the samples. The key point is that most of the managers had responsible positions, so that the dissatisfactions that we report are not the complaints of junior functionaries but reflect the views of influential cadres. This point is particularly important in the case of the Japanese store, Jshop, where the sample was drawn from managers the majority of whom had attended or were attending a specific higher level training course. This fact means that we cannot treat reported levels of training in this company as representative of the general situation, but one might also expect such a group to be particularly satisfied with their prospects; to the extent that we found discontent, our estimates of its extent are likely to be conservative.

We aimed to include at least 25 managers from each company. As the following list, which also gives company pseudonyms, shows, this target was achieved or exceeded in all cases:

BrengCo 32 Britbank 41 Britshop26 Brutil 33 Total 132 JengCo 30 Jbank 25 Jshop 27 Jutil 25 Total 107

These 239 managers each completed an extensive structured questionnaire covering their career with their firm, their educational background, their views of how they were evaluated and rewarded, their experience of training and development, and their assessment of the current state of management development in their organisations. The questionnaires were designed in Britain and translated into Japanese by members of the research team who, using their own extensive knowledge of Japan, ensured that the questions were meaningful in a Japanese context. In the British firms, every manager was also interviewed about these issues. In Japan, interviews were conducted with just over half the sample.

We thus have a substantial amount of quantitative and qualitative information. In this article, we focus on the former, drawing on the latter only to offer explanations of the patterns of replies. We consider in particular how far differences existed between the two countries and how far there were differences between sectors without there being any clear ’country effect’. One simple way to do this is to compare the two firms in each of the four sectors. If conventional statistical tests show significant differences in all four sectors, we can conclude that these differences existed generally between the two countries. But there may also be an interaction effect: the influence of being in a sector varies in its force according to the country, so that a result for, say, the Japanese store cannot be explained only by the separate sector and country effects. A simple inspection of the data may sometimes suggest that interaction effects are present. But more rigorous analysis is permitted by loglinear models. These, together with the other main technique employed, analysis of variance, are described below. We also explain how we constructed indices from separate questions.

54


STATISTICAL METHODS

Loglinear techniques take a contingency table and test how far various models can reproduce the figures in the table. We have a set of three-way tables: a dependent variable classified by sector and country. The simplest model is one of no association. Then we can take account of 'two-way effects': that the dependent variable is associated with sector and with country. Finally, there is the interaction model, in which the level of the dependent variable in each category of sector depends on which country is involved. This model includes all possible effects, and it therefore fits the data exactly. The interesting question is whether the data can be represented by simpler models. There are two key criteria in testing for this. First, the goodness of fit is measured by the likelihood ratio, G2. Its significance is tested by the chi- square statistic. The logic is the same as for a normal contingency table, but the direction of what is being looked for is reversed: a good fit is indicated by a large chi-square, with 0.05 being conventionally the lowest acceptable level. Second, the difference between the actual value of an observation and the value expected from the model is assessed. The 'standardised residuals' for each cell should be no larger than 1.96 or smaller than -1.96. In addition to knowing whether a model is significant, in the sense of coming close to the data in a way which is unlikely to have arisen by chance, it is important to consider its strength: a relationship can be significant but very weak. The strength of a model may be assessed by comparing its G2 with that of the simplest model. This simplest model is the 'grand mean' model which assumes that all cell frequencies are identical.

A clear illustration is provided by results not reported in detail here, namely, the association between closeness of evaluation, which we denote as V, sector (S), and country (C). The interaction of all three in the saturated model is represented as [V,S,C]. A model in which V and S were associated but which included only the main effects of C is written [V,S], C. A test of no association between any of the variables is V, S, C, and so on. The following results may be noted:

Model Effects G2 Sig.

1 Grand mean 141.0 0.000 2 IV,S,CI 0.0 1.000 3 [VSI W,Cl [S,CI 4.86 0.562 4 [V,SI [V,CI 7.67 0.568 5 [VSI c 9.65 0.617

Model 5 fits the data very well, with a G2 barely higher than that of the model including an association between V and C. The worst standardised residual was -1.14. We can therefore conclude that there was a significant relationship between sector and closeness of evaluation; that there was no country effect; and that the relationship was also strong as indicated by the reduction in G2 as compared with that of the grand mean model.

Analysis of variance is a technique where the dependent variable is continuous. It tests for variations between categories of independent variables and also for interactions, using F tests to assess the significance of an effect.

55


We created three indices: an overall score of the value of training derived from up to seven replies; a measure of views of the evaluation system derived from six questions; and an index of attention to management development from four variables. In the latter two cases, some questions asked for reactions to a 'favourable' and some to an 'unfavourable' statement. We reversed scoring on the latter. The issue then is whether it is valid to add individual items to form a summary measure. The appropriate test here is reliability analysis. Taking the measure of views of evaluation as an example, the alpha coefficient was 0.81, and there were no problems with additivity. The former means that the items could be taken as forming one scale; the latter shows that the simple scoring scheme from 1 to 5 adequately reflected the data and that there was no need to consider a different scoring scheme.

For the measure of training, scores were constructed as follows. For each form of training experienced, managers were asked to say whether it had been very valuable, fairly valuable, or not valuable. Scores of 2,l and zero were assigned to each reply. An average score was computed. On balance, scores tended to the favourable end of the range, with the overall mean being 1.34 compared with the mid-point of 1 .O. Each manager's average will depend on the number of training methods experienced. We therefore also looked at differences for each type separately, and the overall pattern was generally repeated. An analysis of variance for the overall scores showed that there was no difference between sectors but that there was a clear country effect.

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managerial careers and management development: a comparative analysis of britain and japan

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