It should be noted that Japan does have unions within their companies. Younger employees are quite active in these unions. For the most part the unions and the management have been on compatible terms. In recent times this attitude appears to be changing towards the adversarial role of US unions. Employees’ organizations want legislation and are calling for shorter working hours, overtime ceilings, an increase in the overtime wage rate, and increased vacation entitlement. (Yamada, p. 699-718)
In an effort to retain the free enterprise aspect of capitalism, there have been many movements in the US towards antitrust actions to break up monopolies such as Standard Oil and AT&T. In an effort to retain the freedom of free enterprise numerous laws have been passed and government involvement has been fostered in the US to protect these rights. The Japanese approach towards company development and protection is quite different as evidenced in Keiretsu(). As large parent companies grow they form connections with lower and second tier smaller companies through cross ownership, financial ties, long-term business relationships and social and historical links. Each company entwines their business with one of the Japanese business partners. In this way the sources and uses of funds are dispersed and kept within Japan. As a company expands it will borrow funds or be funded by a series of Japanese connected banks or large firms. They in turn will secure a percentage of the sales profits as the firm grows. If a firm has a downturn connected firms will help out or help absorb some of the pain and personnel associated with the loss. This connected network has been quite successful and profitable for Japan as evident in large companies such as Mitsubishi, Sumitomo, Toyota and Hitachi. Working in association with one of the large firms has a certain aspect of security associated with it. When companies like Apple work with these large firms, the business practice and ethics becomes quite evident in the manufacturing of their products. For example, when Apple contracts out a job to a firm for a completed product or finished good. The Japanese firm who wins the bid in turn contracts out the component parts of the product and it’s assembly to smaller connected firms who each taking a percentage margin. The work performed to manufacture this product is conducted by firms who are connected to the primary company who won the bid. If production increases these smaller firms benefit from the gains and increased production. If the volume decreases the mother firm does pull back but usually assumes the obligation to provide for alternative sources of production work for their second tier subcontractors or cottage partners. We have found that the relationships are extremely tight to the point of blocking alternative sources for component parts. We have had a recent example of this with one of the major Keiretsu firms. Apple dictated a specification for a component part to be used in the manufacturing of a new product. The component part was not manufactured by one of the second tier suppliers or family members of the supplier but by competitor firms in Europe. As a result they commissioned one of their subcontractors to copy the part and refused to purchase the component from a firm outside of Japan.. We have found that Japanese manufacturers will source only from connected Japanese firms and will resist European or American supply sources unless it is a last resort or under pressure from Apple. It is noted that Japanese shops will manufacture needed parts for the benefit of the Keiretsu firm and Japan, and if needed and they will be funded by the Keiretsu to do so.
This sort of business practice has been termed as antitrust in the US. This is considered pure and fair in the Japanese culture and the Japan government system fosters this type of business practice. The Confucian ethics of loyalty and fidelity are so strong that companies often will not do business with other companies unless they have personal ties within that company. This has made it difficult for Western companies to break into the marketplace as these ties, for the most part, have never been established. Since the Japanese focus on the good of the nation as a whole and not on individual capitalism it is easy to see why this behavior would be appropriate in their terms. It is necessary to keep in mind that the basic ethics which the Japanese practice, it would be quite appropriate that the company would network in this way. What poses a difficult challenge is when the two different philosophies are entwined within the same region where the basic ethics differ so much. In the States, capitalism demands the use of the lowest cost manufacturer or the bank with the best interest rate no matter who they are or where they are located. There is more incentive in a capitalistic society to save on costs then to network with US firms. In Japan it is a breach of ethics for a Japanese firm to conduct business outside the boundaries of the Keiretsu or where funds are not funneled back into Japan.
Is it right for a country like Japan to practice their work ethic in a country like the U.S. whose basic value and moral systems are quite different? It appears that compromises must be made. Recent news articles indicate that the Keiretsu walls are starting to crack and U.S. capitalistic values are beginning to creep into the Japanese workplace. These changes appear to have started in the late eighties when the yen lost value (Kuniyasu, p.22). As a result large Keiretsu’s had to lay off or force out of business their second tier suppliers or lose the mother company. This change in change company behavior led to a change in worker’s sentiments. The basic values once cherished appear to be visibly deteriorating. As a result students attitudes are changing and the corporate culture is becoming more and more competitive, seeking talented managers from Western companies. Even Japanese workers are beginning to seek the “better job across the street” (Kuniyasu, p.45). Companies such as Matsu*censored*a have taken aggressive capitalistic competitive actions within Japan to get ahead. These two cultures often find it difficult to understand and accept each others differing corporate goals and management styles and misunderstandings are frequent.
Sources Cited
1. Shaw, William H. Business Ethics. Belmont: Wadsworth Publishing Company, 1988.
2. Dillon, Linda. “Can Japanese Methods Be Applied in the Western Workplace?”
Quality Progress October 1990: pp 27-30.
3. ?Religion.? Cowles Comprehensive Encyclopedia. 1980 ed.
4. Kuniyasu, Saki. “The Feudal World of Japanese Manufacturing.” Harvard Business Review
Nov-Dec 1990: pp. 38-49.
5. De Mente, Boye. Japanese Manners & Ethics in Business. Phoenix: Phoenix Books/Publishers, 1981.
6. Morita, Akio. The Japan that Can Say No –The New U.S.- Japan Relations Card. Osaka: Kobunsha Publishing, 1990.
7. Yamada, Narumi. “Working Time in Japan: Recent Trends and Issues.” International Labour Review Nov./Dec. 1985: pp. 699-718.
8. ?Capitalism.? Webster’s New Collegiate Dictionary: 1977.
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