‘Japanese Management 20 Years On: The Contemporary Relevance of Japanese Management Practices’

This report discusses the contemporary relevance of Japanese management practices to managers, policymakers and academic researchers. Since the emergence of the Japanese model in the 1980s, important changes have been made in the management practices of Japanese firms. A major factor has been the effort to control costs of production in a global economy where the influence of China as a centre for cheap manufacturing has undercut many competitors. In addition, the ability of countries like South Korea and Taiwan to develop cheap, fashionable and fast moving consumer electronics and telecommunication goods has challenged Japanese hegemony in this area. Japan has therefore faced the problem of how to adapt to the new era of globalisation whilst carrying forward the legacy of the ‘lost decade’ of the 1990s. Developments like the introduction of performance pay and a greater use of nonregular employment are indicative of a move towards a more market-oriented and diverse Japanese economy that could cheapen overall labour costs. This has been accompanied by significant off-shoring to China and other parts of Asia of segments of the manufacturing process, again in order to reduce costs. At the same time, there is an important continuity behind the changes and the nature of the management practices remains specific to Japan. It suggests the emergence of a new, or revised, Japanese model which differs from its predecessor in various ways. It stresses the increased diversity between industries and firms, in part due to differential rates of internationalisation. The new model acknowledges previously underplayed aspects like the role of nonregular employment. It recognises important limitations and challenges that confront Japanese firms in seeking to shift the emphases in their approach to management. Examples include the position of non-regular workers and the limited success in certain knowledge-intensive industries.