In the early 1980s, William Ouchi asserted in the U.S. soil the significance of Theory Z (1981), a Japanese management style that includes communal relationship in organizations and strong trust bonds as a more effective way to handle business as evidenced by the success of Japanese corporations. This has made the interest and appreciation for the Japanese style of management and practices grow for the last twenty years, especially those successful Japanese companies who used unusual approaches (Lee and McCalman, 2008).
For Japanese firms, the development of good relationship is a primordial interest. A Japanese firm may refuse to deal with another and ink a partnership regardless of the possible profits it may gain from the venture. The drive to develop a good relationship is primarily due to the very important principle called “tsuikiai” (socialization) (Lee and McCalman, 2008). Peer-to-peer relationship is more essential than relationship between levels as the Japanese believe that an organization draws strength from the former rather than from the latter. Hence, for American managers, it is only normal to assess their subordinates based on certain criteria. On the contrary, Japanese organizations tend to assess their employees based on their ability to work with their colleagues (Byham, 1993). Japanese managers get good evaluations if their subordinates can work well with each other. As such, Japanese firms give more emphasis on the ability of the employees to work with other employees and not much on their performance. This is due to their belief that as long as a good relationship is established within the organization, the organization can handle other matters effectively (Lee and McCalman, 2008).
For the Japanese, good relationships can be developed through the following:
1) After work dining & drinking session
As previously mentioned, the principle of tsuikiai or socialization allow the Japanese to continue to incorporate good relationships as part of their corporate management style. Apparently, this can be seen in their popular practice of usually having dinner and drinking sessions amongst employees after office hours (Lee and McCalman, 2008). This is also the idea of the “communication plaza concept” wherein the executives meet their employees informally to have lunch or dinner and at the same time to listen to each other (Otsubo, 1993). Through such engagements, employees have the chance to be more familiar with each other away from the four corners of their business premises. This positively affects the connections among the employees. This enables the Japanese organizations to create a warm and communal workplace where employees feel that they can communicate freely with everyone (Sullivan, 1992). Such practice is not the same with Americans where the latter would prefer to maintain the division between their personal and work life.
According to Arenson (1993), the connection between U.S. workers and their companies are created by written contracts and the compensation that the companies renumerate to their employees. This complimented the observation rendered by Rehder (1979) that Japanese managers treat their subordinates like their family members while western managers’ relationships with their subordinates are through contracts which makes the relationship depersonalized. This is contrary to the belief of Japanese workers that they are obligated to the company they are working for because of the close relationship and bond that they have with their company and this creates mutual trust between the employees and the company. They likewise have a sense of shared focus to reach the goals of the organization. This management theory has been one of the core values of Honda from 1980s when they first established their operations in the United States and this was adopted by Nissan, Mazda and Toyota (Sullivan, 1992).
2) Quite often meetings rather than electronic or paper work
Americans would prefer to have everything first on paper before they can act on a project. Whereas Japanese prefer to do meetings rather than convey their messages through e-mails or doing paper works primarily as they despise memos and paper work (Arenson, 1993). According to Lee and McCalman (2008), it is through meetings that the workers would begin to know each other and determine the things that need to be done. This is most applicable in cases where there are no contracts or written documents involved and through meetings, the employees are able to worke on matters they need to attend to (Lee and McCalman, 2008).
3) Informal arranged agreements vs. legal agreements
Before an American company would deal with another enterprise, it is not needed that the two companies develop a good relationship. It does not matter if a company would deal with a competitor provided that the two companies would gain mutual benefit. As a sense of security, American companies need to employ countless lawyers and execute numerous contracts before setting matters off. As a pre-requisite, everything needs to be laid out on paper before anything is started (Lee and McCalman, 2008). The mentality in America is that everything is governed by laws to make sure that people involved know what is set on the line (Arenson, 1993). It is ordinary for companies to deal with strangers and just develop a relationship during their venture (Lee and McCalman, 2008).
This is not the case for Japanese companies as they require developing personal relationships before they transact with other business entities. This is because of their belief that it is important that a trusting relationship between two companies is developed before considering to have business venture (Lee and McCalman, 2008). In Japan, there is less dependence on the laws and rather, more premium is placed in developing a trusting relationship before going into a business transaction. Unlike Americans that prefer to settle everything in a legal way or execute contracts first, Japanese are known to have healthy disdain for lawyers and legal or written actions. And unlike the Americans that would employ lawyers and execute contracts before the transaction, Japanese dislike being forced to deal just because of the contracts and in the process may just ignore some provisions thereto. They believe that the situations will have changed after signing the contract (Lee and McCalman, 2008).
In fact, the two countries have a big difference in the number of lawyers as in the United States, there are over 800,000 lawyers as compared to Japan that has 15,000 lawyers only (Arenson, 1993). Moreover, Japanese would prefer to spend more time interacting with their potential customer or supplier before they would commit themselves (Otsubo, 1993).
4) Networking- personal contacts
Japan depends on networking as their society is very much a relationship-oriented one. Japanese would get things done though their personal contacts. For them, a man’s success or failure could be directly affected by their connections that he or she has developed over the years. In fact, a newly graduated Japanese would almost depend exclusively on his or her connections through university or from personal connections to land a job. That is why there is a high probability that the company recruiters would hire applicants coming from the same university as theirs because of the special connection that is existing between the recruiters and the university faculty and staff.
This is what Japanese called “jinmyaku” or the web of human beings. Any internal or external undertaking to the company is accomplished through personal contacts (Lee and McCalman, 2008). It is then ordinary for an employee to develop extensive personal network within and outside the organization to protect his or her success rate especially that a person’s capability depends also on the extensiveness of the networks he or she may have (Kase and Liu, 1996). Such mentality may affect the attitudes of the Japanese of not working with strangers. Through developing personal contacts takes time, once the networks have been created, everything is much easier as there is not much paperwork and lawyers involved. This principle makes it more difficult for foreign companies to penetrate Japan (Lee and McCalman, 2008).
Japanese organizations would prefer hiring somebody who has a connection thereto because hiring a new employee is like welcoming a lifelong member of the corporate family. An individual applying for a position in a company by reason of an advertisement is considered a total stranger. As such, there is a possibility that Japanese companies may look after the personal attributes of an applicant rather than his or her technical attributes (Lee and McCalman, 2008). It is very vital for an organization to ensure that the person to be hired is a team player and will blend well within the group. This is in contrast with U.S. companies as they prefer to look at the technical attributes of the applicants and highly rely on grade-point averages and specific credentials or competencies (Lee and McCalman, 2008). Networking works wonders in cases where a manager tries to launch a new project and the project is not really within the expertise of the concerned department, managers that have a well-established network within the organization could use their connections to persuade their colleagues to support their projects and also use these connections outside the organization to help make the project successful (Kase and Liu, 1996).
Japanese manufacturing companies were able to capitalize in their personalized networking system that they were able to establish when they internationalized their operations during the late 1970s and 1980s. The personalized networks developed between their head offices and subsidiaries made the flow of the information run smoothly and eventually positively affect the efficiency of the companies (Kase and Liu, 1996). Moreover, Japanese companies establish personal networking with other Japanese companies in other countries (Yu and Ohle, 2008) for their advantage.
5) Teaming up in everything they do
One of the major difference between Japanese management and Western management is that the structure of the organization is loose or poorly defined whereas the structure of the organization of the western management is tight or the specific functions are associated with specific boxes (Rehder, 1979).
Teaming is a very important aspect in the management of a project. That is why the composition of teams that will handle organizational projects are carefully selected (Lee and McCalman, 2008). Even in creating an organizational project, the composition of the team that will develop and plan the concerned project is carefully assembled from the different departments of the organization (Gray and Larson, 2003). And up to the time that the organizational project is already running after the planning stage, there are still some times that the personnel from the planning stage will coordinate with the functional managers and project managers of the actual operation of the project (Gray and Larson, 2003).
As Japanese companies or the Japanese culture itself has high regard on the “web of human beings”, it is part of the establishment of trust within the team to develop close personal relationship among the team members. The trust created by the “tsuikiai” plays an important role in the accomplishment of the interconnected tasks of the team members. A high level of trust is necessary for the accomplishment and implementation of the various tasks that the manager is leading (Kezner, 2000). Every meticulous aspect of the project requires the highest level of cooperation and team work among the players performing the tasks. That is why it is the responsibility of the project manager to build and maintain a high level of trust within the team to ensure the successful operation of a project throughout its course (Kezner, 2000). This is where the American employees of some Japanese companies are impressed with how every Japanese members of the team would persist to work together to collect and discuss data gathered and develop ways to respond to different situations and improve their performance (Sullivan, 1992).
Another thing that shows the Japanese persistence to teaming up is their decision-making system, or also known as “ringi” or decision by consensus system. This enables the employees to be motivated to work together. The term ringi actually came from two words: ‘ri’, which means to ask from below and ‘gi’ which means to deliberate (Ichiro, 1977). By the Japanese decision-making systems, the organization initially debates on the meaning of a certain question and determines its possible solutions until consensus if finally reached. The process of the decision making and even the initiation of the process are participated in by all levels of the organization, whether the process be a verbal or written one (Naotsuka, 1978). This is because the Japanese have a view that it is important to first debate the problem or the question to achieve full comprehension in its general corporate-wide perspective, after which is to establish a consensus to prevent groups from taking sides on one solution or another hastily. In such case, clash between the prevailing and losing groups is prevented because conflicts will only weaken the implementation of the favored solution. This normative process is called by the Japanese as “nemawashi” (Naotsuka, 1978).