Japanese Management

International perspectives

Hitoshi Iwashita

• Publisher: Routledge
• Year: 2016
• eBook ISBN: 9781315308258
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

This book provides a new understanding of the constellations of logics in Japanese management practices in Asia and the West. Through comparative ethnographic case studies in a Japanese multinational corporation (MNC), the book explores the cultural meanings of family, corporation, market and religion logics at each subsidiary's site in Thailand, Taiwan, Belgium and the United States.

In doing so, the book defines cultural space through an institutional logic approach. It argues that logics are culturally interpreted, which can impose a serious limitation on the institutional logic approach based on the analysis of Western society. It reveals that Japanese 'family' logics and Theravada Buddhism in Asia are strengthening each other and this directly supports the presupposition of amplification. It further elaborates on the ongoing constellations of logics that are continuously formed in relation to geographical contexts. The book also explains that the boundaries of organisational communities are not automatically formed by Japanese expatriates but constructed through actors' profiles, which, in turn, raises their importance.

Therefore, this book is a must-read for researchers, managers and anyone interested in Japanese MNCs.

1 Introduction

1.1 Introduction

Is this [subsidiary] a Japanese company?

During interviews, I have often asked this question of both local employees as well as Japanese expatriates in their subsidiaries in Asia and the West of a Japanese multinational company, known here by the alias ‘JapanCo’. Responses to this question varied according to different reasons. In Thailand, a Thai manager quickly responded with a big smile to this question by saying, ‘yes’. He then described his intimate relationships with his subordinates as ‘we are ‘family’. They went out for dinner a few times per week. The manager was familiar not only with the professional issues but also the personal lives of his team members. He was confident that he played the role of a ‘father’ by treating his subordinates as his ‘children’, in his words. By contrast, in the United States, an American director simply replied, ‘Oh boy! It is an American company’ in explaining his way of doing business with American customers in the United States. His boss, a president, is an American and the majority of customers are also American, in contrast to Japanese presidents in Asia. This difference illuminates the variations within a Japanese MNC. On closer look, this variation is not limited to the subsidiaries in each geographical location in Asia and the West. It exists even within the subsidiaries according to the Japanese expatriates and local employees in their organisational contexts.

The idea for this book emerged from my previous professional and personal experiences. It originally dates back to my late teens when I was a high school student in the late 1980s and ‘Japanisation’ was happening (Oliver and Wilkinson, 1988;1992). My father was a management consultant and educational instructor to Japanese multinational corporations (MNCs) who were entering, or had entered, the US market. At my home in Japan, he often shared his consulting stories about how the United States resisted the Japanese way of management because of cultural differences. In order to manage American employees, he emphasised the significance of teamwork to explain what Japanese management should be like. He asserted that Japanese management is based on the ‘family’ norm, although I did not understand what that meant at that time. All the stories, as far as I remember, illustrated a vivid contrast of cultural differences: individualism versus collectivism; professionalism versus paternalism; direct versus indirect communication; personal spaces in communication, etc. These contrasts sounded intellectually interesting to me and posed a question as to what causes these differences. After graduating from university, I worked first in Japanese and then US corporations. Later on, I started to work as an independent management consultant dealing with intercultural issues in organisational development, and this motivated me to return again to this question, which I realised still remained unanswered. Since then, I have decided to pursue this interest further in order to understand the differences between Japanese and Western management more fully.

This book deals with those unanswered questions that were on my mind. It extends the understanding of the constellations of logics in Japanese management practices in Asia and the West (Goodrick and Reay, 2011; Thornton et al., 2012). By adopting comparative ethnographic case studies, it explores the cultural meanings of family, corporation, market and religion at each site of the subsidiaries of JapanCo: Thailand, Taiwan, Belgium and the United States. In so doing, the book addresses a new cultural space in an institutional logic approach (Thornton et al., 2012) in the sense that the constellations of logics in Asia are to some extent different from those in the West. Here, Asia primarily means Southeast Asia and North Asia, such as Taiwan, Thailand, Korea and Japan. The West mainly refers to Western Europe and North America, such as the United Kingdom, the United States and Belgium.

1.2 Audience of the book

There are three main audiences for this book. The first audience are institutionalists who theorise and examine institutional logics. Members of this group include Elizabeth Goodrick and Trish Reay, who developed constellations of logics (Goodrick and Reay, 2011; Waldorff, Reay, and Goodrick, 2013); Patricia H Thornton and her colleagues, who presented institutional logic perspectives (Thornton et al., 2012); Royston Greenwood and his colleagues, who raised institutional complexity (Greenwood et al., 2011); Friedland and colleagues, who coined and continued to develop institutional logics (Friedland and Alford, 1991; Friedland et al., 2014); and Rick Delbridge and Tim Edwards, who proposed relational analysis (Delbridge and Edwards, 2007; 2013). The second audience are Japanese management scholars who investigate Japanese management practices. This group includes Nick Oliver and Barry Wilkinson, who elaborated on Japanisation (Oliver and Wilkinson, 1988, 1992); Tony Elger and Chris Smith, who criticised Japanisation (Elger and Smith, 1994, 2005); Dorinne K. Kondo, who elaborated on ‘company as family’ in a small Japanese firm in Japan (Kondo, 1990); and Anita D. Bhappu, who proposed the existence of ‘family’ logic in Japanese MNCs (Bhappu, 2000). The third audience includes business managers who work with Japanese MNCs. These managers can be either Japanese or non-Japanese.

1.3 Structure of the book

Chapter 2 identifies gaps in current research and specify the research questions these gaps pose by reviewing the existing literature on Japanese management practices. The practices reviewed are non-manufacturing as well as manufacturing practices identified with Japan. These practices are Total Quality Management (TQM), Quality Control Circle (QC Circle), Just In Time (JIT), lifetime employment and seniority-based wages (Oliver and Wilkinson, 1988; 1992; Ackroyd et al., 1988). Here, the initial argument was whether manufacturing practices can be transferred to Western regions as ‘best practice’. Later, this universal model of best practice began to attract heavy criticism centred on a lack consideration for different geographical contexts such as social and economic conditions (Elger and Smith, 1994; 2005). A series of unsuccessful transfers of manufacturing practices led to ‘hybrids’ of Japanese and non-Japanese management practices (Elger and Smith, 2005).

Nonetheless, this strong emphasis on transferring practices overlooked another important aspect of the practice embodying cultural meanings such as the ‘company as family’ and employees as ‘family’ members (Kondo, 1990). In respect to the concept of the company as family, workers in Japanese MNCs are considered to be reciprocal family members who share collective responsibility and identities. In this way, organisational harmony, a striving for consensus, seniority and slow promotion in exchange for a lifetime’s employment are prioritised (e.g. Hatvany and Pucik, 1981; Keys and Miller, 1984). In light of this review, four research gaps within Japanese MNC subsidiaries have been identified:

• Few in-depth comparative case studies of Japanese MNCs have been conducted spanning Asia and the West.
• Little attention has been paid to the cultural meanings attributed to practices.
• The manner in which Japanese expatriates and local employees are organised has had little scrutiny.

Hence, drawing on these research gaps, three research questions have been defined regarding Japanese MNC sales subsidiaries:

1. 1 Does the focus on the subsidiaries of a Japanese MNC help to illuminate how practices are being conducted across Asia and the West?
2. 2 Does the focus on the subsidiaries of a Japanese MNC help to illuminate how different cultural meanings are being attributed to practices across Asia and the West?
3. 3 Does the focus on the subsidiaries of a Japanese MNC help to illuminate how Japanese expatriates and local employees are being organised?

Japanese MNCs across borders are expected to generate hybrids (Elger and Smith, 2005; Endo et al., 2015). These hybrids and changes can only be interpreted through attributing meanings in practices across Asia and the West. Drawing on Abo (2015), Asia is defined as primarily Southeast Asian countries and East Asian such as South Korea, Taiwan and China, while the West means Western European and North American countries such as the United Kingdom, Belgium and the United States. The institutional logic approach offers a way of focusing on the variety of meanings attributed by such practices to illuminate how meanings are culturally and institutionally attached to Japanese management practices across Asia and the West.

Chapter 3 formulates a conceptual framework to analyse practices across the subsidiaries of a Japanese MNC. It builds on the current literature on institutional logic (Thornton et al., 2012) and constellations of logics (Goodrick and Reay, 2011), and applies the insights to different geographical contexts in which the Japanese MNC’s subsidiaries operate. Constellations of logics are composed of cooperative as well as competitive relationships among logics, possibly illuminating the complicated processes involved in a Japanese MNC. Furthermore, given the constellations of logics, the family, corporation, market and religion are identified and elaborated. In particular, non-market logics such as family and religion are identified as areas of focus. Family logic is rooted in Japanese society where Japanese management practices are born and inculcated. Family logic in Japanese management does not depend on whether a company is owned by a family. Rather, it operates among the interpersonal relationships between management and employees as the Japanese reciprocal relationship based on ko and on (returning favours to one’s parents) within a firm, characterising ‘company as family’ (Kondo, 1990). Lifetime employment, teamwork and consensus orientation are closely associated with family logic. The chapter also examines other religions, markets and corporation logics. These logics are targeted to characterise and interpret practices in a Japanese MNC. They are deeply rooted in geographical communities in the subsidiaries of Japanese MNCs. Their relationships can be different in Asia and the West.

Chapter 4 identifies the research design and justifies the research methods in order to answer the research questions. ‘Practice theory’ (Giddens, 1984) is combined with an institutional logic approach, subsuming all the levels of analysis, such as individuals, organisations and society (Friedland and Alford, 1991) into a comprehensive concept of ‘practices’ as an ‘ongoing series of practical activities (Giddens, 1976, p. 81)’. The purpose of the research is to understand the cultural meanings of practices through the constellations of logics. A comparative ethnographic case study is selected as the main type of research. It is comparative across not only Asia but also the West, where constellations of logics were originally identified and theorised. It is ethnographic because ‘at home ethnography’ is adopted. It is important to have ‘natural access’ to the research target, a Japanese MNC, rather than as ‘a professional stranger’. Through my natural settings, I selected JapanCo as a case. I have long known the Japanese MNC as my father’s client. Some of the interviewees have known me since I was young, although I did not necessarily remember them. Data collection and analysis are organised based on ‘at home ethnography’ (Alvesson, 2009). Thus, the interpretation of data starts from the beginning of data collection and finishes only at the end of the writing process. Through the iterative process of interpretation, self-reflexivity is promoted and utilised. I examined and interacted with the meanings of the topic not as ‘a neutral data collector’ but as an ‘active and reflective’ agent (Mason, 2002).

Chapter 5 provides relevant background for interpreting the remaining empirical chapters. With the alliance partner AmericaCo, JapanCo is characterised as a unique and atypical Japanese corporation, possibly causing complex cultural meanings in practices through varied constellations of logics. Here, two major elements influencing the cultural interpretations of each subsidiary in terms of collective identities are provided: the main type of local customers and the dependence on JHQ. Identified as ‘a typical Japanese company’, JapanCo Thailand (JTHAI) seems to be associated with Japanese management practices and has a large Japanese customer base. By contrast, JapanCo USA (JUSA) and JapanCo EU (JEU) are strongly influenced by AmericaCo and their local customers, thereby being identified as ‘an American company’ and a mixture of a ‘Japanese and a European company’ by their local employees. JTAIW is facing a change in its customer base from Japanese to non-Japanese, such as Taiwanese and Chinese, yet being identified as ‘a Japanese company’. Furthermore, an examination was also made of the dependence on the resources of JHQ where research and development functions are concentrated. In particular, JUSA is relatively independent from JHQ because of their manufacturing and research and development (R&D) functions, while the others, such as JTHAI, JapanCo Taiwan (JTAIW) and JEU, rely on manufacturing and R&D resources from JHQ. These subsidiaries have to communicate frequently with JHQ to enquire about and negotiate prices, delivery and product quality.

Chapter 6 explores how the practices of customer development are culturally interpreted through cooperative relationships between logics. Targeted practices are study groups, on-the-job training and sales follow-up. Two main findings are identified in this chapter. First, Japanese ‘family’ and Thai Theravada Buddhism logics are culturally interpreted according to their national cultures. The Japanese family is governed by reciprocal ko and on relationships, rather than the ‘unconditional loyalty’ that legitimates the Western family (Thornton et al., 2012). Oyabun kobun and Senpai are expressed as a burden of Japanese family members: Ongaeshi is repayment to whomever one owes a debt, especially in the context of a child or subordinate obligated to return a favour to parents or seniors for the nurturing they offered. Furthermore, the Thai Theravada Buddhism logic is also culturally interpreted and differently enacted. Both Japanese family and Thai Theravada Buddhism once again highlight the limitations of the current Western institutional logics perspective, eventually implying that these perspectives cannot be universally applied. Second, culturally enacted logics can be amplified in a cooperative manner. This finding directly elaborates on the presupposition of amplification itself (Greenwood et al., 2010; 2011).

Chapter 7 explores how work and employment practices are interpreted through contextually competitive relationships among logics that may coexist and in turn conflict. Targeted practices are job delegation, performance appraisal and socialisation. The main finding of this chapter is that the constellations of logics are ongoing and continuously formed in relation to geographical locations because contextually enacted logics do not necessarily ‘win’ or ‘lose’ for lengthy periods of time in practice. Although there are means to deal with and finally resolve the competitive relationships – e.g. ‘actors’ active collaboration’ (Reay and Hinnings, 2005; 2009), ‘compartmentalisation’ (Greenwood et al., 2011) – these are not adopted here to mediate the competitive relationship. Rather, negotiation and conflict continue to be played out by actors on an ongoing basis. This situation further negates the concept of one-off ‘segmenting’, which aims to separate the impacts of logics on different actors, geographical communities and organisations once and for all to solve the conflicts caused by competitive relationships (Goodrick and Reay, 2011). Moreover, the constellations of logics are, to some extent, different in Asia and the West, which elaborates on the geographical communities in which specific logics are rooted (Marquis and Lounsbury, 2007; Lounsbury, 2007). In Asia, the family logic is enacted through the practices of employment. By contrast, in the West, market logic is strongly enacted by performance appraisal and socialisation (see 7.3.1). As Abo (2015) and Lounsbury (2007) point out, geographical location matters. However, the geographical locations in Asia and the West do not automatically determine the competitive relationships between logics.

Chapter 8 explores how the practices in work organisations are interpreted through ceremonial aspects and how actors in turn are organised. It also corresponds primarily, but not exclusively, to the third research question of how Japanese and locals are organised. Targeted practices are communication with JHQ about the performance evaluation of Japanese expatriates, business results and complaints of the locals. The main finding of this chapter is that the boundaries of organisational communities are not ‘segmented’ to Japanese expatriates but constructed through actors’ profiles. The finding further elaborates on the receptivity of ‘intraorganisational communities’, which is supposed to affect the given meaning of logics in the subsidiaries. Greenwood et al. (2011) argue that receptivity may be strongly affected by ‘the thickness of ties’ of organisational communities to their organisational fields. At first sight, these thick ties seem to support Japanese organisational communities. Japanese expatriates are structured as the dominant organisational community, manifesting uchi, or the inside group of the ethnocentric family (Kondo, 1990). The boundaries of these organisational communities are not prefixed, however, but contested and dynamically redrawn in relation to the actors’ personal profiles. Here, the boundaries are occasionally contested by examining who becomes family members through their ‘active participation’. Moreover, the receptivity of Japanese organisational communities is greatly affected by actors’ profiles, as is strongly implied by Suddaby et al. (2012) and Battilana and Dorado (2010). This tendency indicates that the organisational communities are constructed through actors’ ‘life history’ in terms of logics, as Battilana and Dorado (2010) imply, rather than by the organisational field structures (Greenwood et al., 2011).

Chapter 9 summarises the key findings, their significance, the implications for managers and limitations and future questions. The four main findings are located in the constellations of logics. First, the finding that the cooperative relationships between family and religion logics are culturally embodied by the practices in customer development highlights the serious limitations of the institutional logic approach, which is based on Western society (Thornton et al., 2012). Second, the finding that both Japanese family and Theravada Buddhism are strengthening each other directly supports the presupposition of amplification itself (Greenwood et al., 2010; 2011), while elaborating the facilitative relationship among logics which simply guides practices without conflict (Goodrick and Reay, 2011). Third, the finding that the constellations of logics are ongoing and continuously formed in relation to geographical locations contrasts with the institutionalists’ strong focus on static competition between two logics such as ‘segmenting’ (Goodrick and Reay, 2011) or ‘compartmentalisation’ (Greenwood et al., 2011). Fourth, the finding that the boundaries of organisational communities are not ‘segmented’ to Japanese expatriates but constructed through actors’ profiles raises the importance of an actor’s profile and supports the possible institutional reflexivity of actors, as Suddaby et al. (2012) point out.

Table of contents

• Cover
• Title
• Copyright
• Contents
• List of figures
• List of tables
• Preface
• 1 Introduction
• 2 Company as family in Japanese MNCs?
• 3 An institutional logic approach and constellations of logics: family, religion, market and corporation logics
• 4 Comparative ethnographic case study
• 5 Varieties of subsidiaries in Asia and the West: JapanCo
• 6 Ongaeshi as a return for favour to organisations: customer development
• 7 Either self-interest or family interest? work and employment
• 8 Profiles of Japanised managers: work organisation
• 9 Discussion and conclusion
• Appendix
• Bibliography
• Index