Archive for June, 2012

Young Professional & Decision Making in Japanese Corporations

June 19th, 2012 Comments off

Japanese companies used to rely on information written on a proposal before making a major decision. The task of writing the proposal goes to the youngest and newest member of the department involved. Indeed, the president or vice-president knows the acceptable alternatives, and the young staff tries like heck to figure out what those are. He will talk to everyone, soliciting their opinions, paying special attention to those who know the top man best. Usually, the young person cannot completely figure out from others what the boss wants, and must add his own thoughts. Since the companies rely heavily on socializing employees with a common set of values, and thus, experienced employees would likely have similar ideas,  letting young staff assigns the first step on the decision making would gather new ideas and impose variety enters the decision process in Japanese companies. Too much homogeneity would lead to a loss of vitality and change.

Source: William G. Ouchi (1981) Theory Z: How American Business can Meet the Japanese Challenge. Addison-Wesley Publishing Company, USA: Massachusetts.

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Japanese Vs Americans’ Goals

June 15th, 2012 Comments off

In his visit to the US headquarters of one of the major Japanese banks, William G. Ouchi interviewed both Japanese expatriates top officers and Americans vice presidents.

American: “These Japanese just don’t understand objectives, and it drives us nuts.”

Japanese: “These Americans just don’t seem to be able to understand objectives.”

The American vice president explained: “We simply cannot get him to specify a performance target for us. We have all the necessary reports and numbers, but we can’t get specific targets from him. He won’t tell us how large a dollar increase in loan volume or what percent decrease in operating costs he expects us to achieve over the next month, quarter, or even year. How can we know whether we’re performing well without specific targets to shoot for?”

In other side, the Japanese president explained: “To understand what the business means to Japanese, American should know how we feel and how we should deal with our customers and employees. What our relationship should be to the local communities we serve. How we should deal with our competitors, and what our role should be in the world at large. If they could get that under their skin, then they could figure out for themselves what an appropriate objective would be for any situation, no matter how unusual or new, and I would never have to tell them, never have to give them a target.”

The points are here.

Every major American company and government bureau devotes a large fraction of its time to the setting of specific, measurable performance targets. Every American business school teaches its students to take global, fuzzy corporate goals and boil them down to measurable performance targets. Some basic tools of control in modern American management are Management by Objective (MBO), program planning and evaluation, and cost-benefit analysis.

While, the basic mechanism of control in a Japanese company is embodied in a philosophy of management. This philosophy, an implicit theory of the firm, describes the objectives and the procedures to move towards them. These objectives represent the values of the owners, employees, customers, and government regulators. The movement toward objectives is defined by a set of beliefs about what kinds of solutions tend to work well in the industry or in the firm; such beliefs concern, for example, who should make decisions about what kinds of new products the company should or should not consider.

In this point, Japanese tends to rely on the ability of culture in the management to communicate and disseminate their values and beliefs to all employees. The organizational culture consists of a set of symbols, ceremonies, and myths. The culture is developed when employees have a broad array of common experiences as touchstones. Managers commonly have passed through many and the same functions over the years, so they can refer to a large array of common experiences, tell stories, and remember symbolic events that remind each of them of their common commitment to certain values and beliefs.

Source: William G. Ouchi (1981) Theory Z: How American Business can Meet the Japanese Challenge. Addison-Wesley Publishing Company, USA: Massachusetts.



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