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The Japanese & American Employment Systems
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Compares & contrasts the Japanese & American employment systems. Focuses on how the 2 systems developed & how the Japanese system could benefit American business.... More...
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Paper Abstract:
Compares & contrasts the Japanese & American employment systems. Focuses on how the 2 systems developed & how the Japanese system could benefit American business.

Paper Introduction:
The Japanese employment system has been described by some as the result of cultural norms encouraging high commitment, reciprocity, and conformity, but Andrew Gordon takes the opposing view that these practices are actually an economic response. He traces this system back to its roots in pre-war Japan, showing how the system developed from a different system in the era of World War I and the 1920s into something closer to the current system because of the interplay of economic forces. The Japanese system offers many observable Japanese managerial practices which can be reduced to three underlying factors: 1) a long-run planning horizon; 2) a commitment to lifetime employment; and 3) a sense of collective responsibility. Japan

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Wage controlswere imposed beginning in 1939, setting limits on wages in order to controlinflation. As noted, the Japanese system developed from the labor structureprevalent in World War I. Most analysts find that economic changes in the broadest senseare responsible for the decline in union membership. Peter Drucker in "The Coming of the New Organization" (1988) looksto the future of the business organization in American society, the form itwill take and the ways in which it will differ from the organization oftoday. The earlier post-war gains ofsecurity and respect for workers were retained in this new system, at leastto the degree that they would endow the new labor relations withsignificant legitimacy in the eyes of most workers. The Japanesehave a system that is centrally controlled and directed, while the Americansystem emphasizes the idea of the entrepreneur and of individual action andachievement, with no government control beyond regulation for fairness anda level playing field. Managers wanted to retain a free handwhile at the same time taking a paternalistic view of workers. More regularity was sought as a way of making the system moreefficient and more productive. There aremany who believe that the American system is shifting in response tochanges in the business environment, changes leading to a more information-based approach that will of necessity be a more cooperative approach aswell. More recently, labor in the U.S. The major weakness of labor until the late193 s was its inability to organize industrial workers, but this changedwith the Great Depression and the beginning of the New Deal. After the war, Japanese workers were granted new rights to organizeand strike, and they took advantage of these rights and joined unions inrecord numbers. Whenthe war was over, most of the prewar industrial powers were in ruins, andthe only major economy left intact was that of the United States (Lareau,1991, 12-17). San Francisco: Westview Press, 1991.Sheldon, Ronald and Brian Kleiner, "What Japanese Management Techniques Can (or Should) Be Applied by American Managers?," Industrial Management (May-June 199 ), 17-19. The Civil War becamethe impetus for the foundation of a consistent, centralized system of lawsand commerce and a solid industrial base. Thus, says Gordon, thesystem that now prevails in Japan is not a cultural but an economicdevelopment, and it evolved from the interplay of labor and managementsince World War I. 45-53.Lareau, William. McCulloch and Bornstein (1974) refer to the 193 s and the GreatDepression and find that it had three major influences in the shape andcontent of labor-management polices in America: 1) widespread unemploymentshocked the country about industrial conditions and created a climate inwhich Congress was willing to experiment with new approaches; 2) theharshness of industrial life during the 193 s, particularly low wages andjob insecurity, caused part of the labor movement to reach out to the long-ignored workers in the mass production industries; and 3) the fear ofrevolutionary social formulas from the Far Left and Right persuaded opinion-makers that meaningful reform in the workplace was vital to the maintenanceof a democratic society (McCulloch and Bornstein, 1974, 7-9). Lareau (1991) finds that the American system is based in part on acertain American arrogance stretching back to the Revolutionary War period,which heightened the belief that America was special. ReferencesDrucker, Peter F., "The Coming of the New Organization," Harvard Business Review (January-February 1988), pp. Strikes wereoften about wages, and in such a strike at Nissan, the company used theoccasion to break the union, which was replaced by a second union thatbrought the workers back to the job (Gordon 247-249). The War on Labor and the Left. It is aculture based on individualism and self-achievement and so has resistedgovernment interference and control to a much greater degree. More recently, this perception has started to change, causing many toquestion the American economic system and its management structure,traditions, and theories. Under this system, all workers were to become members of aharmonious community to become "enthusiastic and respected participants ina common productive endeavor" (Gordon 25 ). It was during this period as well that the government forceda change on private sector managers by insisting on the spread of regular,guaranteed seniority increments to all workers at a firm. These unions continued to beeffective into the 195 s in the private sector and the 197 s in the publicsector. The Japanese seem to have movedahead in this area as well (Prestowitz, 1988, 1 -11). The American system is hierarchical, conflictual, reactive, and hascome more and more to rely on short-term planning and thinking. The Japanese system offers many observable Japanese managerialpractices which can be reduced to three underlying factors: 1) a long-run planning horizon; 2) a commitment to lifetime employment; and 3) a sense of collective responsibility.Japanese managers see a work team as an environment in which information isshared in pursuit of improved performance, while Americans use groups toshare responsibilities and reduce risks. As the 193 s progressed, the military and the bureaucracy came tocontrol the political system and pushed the country toward a full-scale wareffort, and it was then that the state bureaucracy took a more activistrole in social policy and tried to systematize labor policy. New York: Basic Books, 1988.Sexton, Patricia Cayo. The organization of the future will thus be information-based.This approach would have some aspects of the Japanese system but would bebased in changes in American culture. Clinton, New Jersey: New Win Publications, 1991.McCulloch, Frank W., Tim Bornstein, The National Labor Relations Board. What was created at this timewas a powerful new ideology of cooperation between company and union onbehalf of the "enterprise society," and this was promoted by managers andaccepted by the many "second unions" that were shaped out of most strikesettlements. Subsequent history furtheringrained the idea that America was special, and World War II brought theAmerican self-image and achievements to their penultimate position. Some of thepractices now seen as typical in Japanese management were spread duringthis period. The unions were successful in making dramatic gains in thesocial and economic status of workers. There weredifferences noted in different industries, and smaller firms were moresubject to labor problems during the depression (Gordon 243-244). Trading Places. After World War II, the problems of Americanindustry increased and in a sense became institutionalized. The problemsare not limited to the manufacturing industries. During the course of this century, labor increased its power as itadded new industries to its rosters and as it learned how to cope with thedifferent types of worker. The desire to shift Japanese approaches to the American system hasencountered a number of criticisms. Gordon shows how rounds of union-busting were undertaken as a way ofremoving organized labor under the claim that it was preventing economicgrowth. A decade of such union-busting served as the start of a secondpost-war reconstruction of labor relations. The Japanese use failure as alearning device and so are able to tackle positive things rather thanconcerning themselves with avoiding the negative. In the early 198 s, thepopular myth held that America would lead the world into the"postindustrial age" and that in the future American competitive strengthwould be based on service industries. Sheldon and Kleiner (199 ) note thatsome believe such an adoption of methods would benefit American companies,and they agree that the adoption of long-term thinking would benefit theAmerican manager (Sheldon and Kleiner, 199 , 17-19). Over time,a new rhetoric of equality and mutual respect crept into managementstatements, and the language used by management reflected a morepaternalistic attitude that at the same time included hard-headed union-busting efforts. During that era, Japanese workers "raisedvigorous demands for the treatment they required before offering asustained commitment to their employers" (Gordon 241). The change was not a quick fix but part of a long andpainful process. What Drucker sees in the large business of the future is a down-sizing from today in terms of management size, and he holds that the modelfor the business of the future in the non-profit organization of today,such as the hospital, the university, or the symphony: "For like them, thetypical business will be knowledge-based, an organization composed largelyof specialists who direct and discipline their own performance throughorganized feedback from colleagues, customers, and headquarters" (Drucker,1988, 45). Still, the U.S.system is still based more on individualism and a labor-managementdichotomy than on the cooperation that marks the Japanese system. Managers who dealt with these demandsresponded in a complex fashion. They demanded threebasic reforms: 1) secure jobs and the social security of severance pay; 2)secure, predictable, implicitly seniority-based wages; and 3) the plea tobe offered respect as human beings. In the 195 s, though, a management counter-offensive soughtrollbacks and used the belief that labor unions were an impediment toeconomic progress to fight back and bring about reverses. The government took a variety of steps toinstitute some regularity in the labor market. The American business experience has been inkeeping with the development of American culture and history. It involved substantial tradeoffs and compromises. Johnson (1988), onthe other hand, notes experts who believe that the Japanese system cannotbe imported successfully because it depends upon Japanese culture (Johnson,1988, 34-36). He traces this system back to its rootsin pre-war Japan, showing how the system developed from a different systemin the era of World War I and the 192 s into something closer to thecurrent system because of the interplay of economic forces. New York: Praeger, 1974.Prestowitz, Clyde V. has been subjected to a decline inits power. Gordon sees theissue differently and finds that the Association was diluted by managerssuspicious of a state-imposed system of councils. The American system contrasts with the Japanese in several ways, forit is based not on cooperation but on conflict between management and laborto a much greater degree. Inthe process, laborers made use of their own organizations to achieve theirvision of just or legitimate treatment (Gordon 25 -251). Some observers see thedevelopment of the industrial patriotic Service Federation as the beginningof a system of harmonious labor-management relations. Of more importance werethe factory councils created in the 192 s, groups that were voluntary andwith worker representatives who were sometimes elected (Gordon 245-246). The Japanese employment system has been described by some as theresult of cultural norms encouraging high commitment, reciprocity, andconformity, but Andrew Gordon takes the opposing view that these practicesare actually an economic response. Industrialunionism was now the order of the day, and this increased the density ofunion membership considerably (Sexton, 1991, 197). American Samurai: A Warrior For The Coming Dark Ages Of American Business. The result was a new stability in labor-managementrelations and the acceptance by the workers of the new regime.

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