Should Japanese giants cut the apron strings?

Japanese companies have enviable track records of international business success, outperforming other multinationals in many sectors. Is it appropriate, then, for Japanese executives to alter a management style that has been proven to work?

Tracey-Lee Wingrove, of Ashridge Management College, Hertfordshire, UK, argues that, in some cases, it is. She bases her conclusions on a study of well-known Japanese companies operating in Britain. They include Mitsubishi Electric, Hitachi Power Tools, Kobe Steel and Mitsui & Co.

Japanese subsidiaries are tied much more loosely to the parent company than most other multinational firms. Japanese corporations are going global without going local, as US and European companies have tended to do. Shoichiro Irimajiri, senior managing director at Honda says; “We are 10-20 years behind in internationalization”.

Control and research and development (R&D) are still largely held in Japan. Many manufacturing companies have not moved beyond the “screwdriver plant” stage, R&D is only just starting to appear with Nissan’s two design facilities in Britain, Honda’s technology-observation center in Germany and Mazda’s research center, also in Germany.

Practically all senior managerial posts are filled by Japanese expatriates. Even when decision making is delegated to managers in the European markets, the Japanese practice of consensus results in consultation with head office in Tokyo. The only areas where local input in decision making predominates are sales and marketing. Knowledge and understanding of local conditions are paramount here.

Once a task has been assigned to a subordinate, the Japanese manager expects the onus to be on the subordinate to give the supervisor frequent progress reports. The British may not be as forthcoming as expected. The supervisor may then make inquiries, which the British subordinate may interpret as interference in the job or as lack of trust.

If a senior Japanese manager wants an update on the progress of a project which is being undertaken by one of his or her subordinate’s staff, the manager expects to be able to go to his or her direct report for the update. This may not work well with British staff, as the British manager has probably delegated it to his or her subordinate and knows little of the detail which the Japanese manager will want to know. Local staff may also find this practice demotivating, as they would be expecting the Japanese boss to come directly to them for the update.

British managers question their bosses’ decisions more then the Japanese who expect their instruction to be obeyed.

The Japanese are highly motivated in their work and cope well without clearly-defined descriptions. They expect local staff to do the same. Some Westerners find this difficult. One British manager said that a Japanese boss does not help to motivate staff, set targets with them or give them much feedback. But more independent individuals can flourish under this system.

Japanese bosses often appear to be very uncomfortable with the annual review and appraisal system expected in the West. The Japanese do not like to discuss money; not do they find it easy to give explicit feedback on performance.

The senior management team of the vast majority of Japanese subsidiaries is composed largely of expatriate managers. It is natural that these individuals attempt to behave in ways that are comfortable for them. After all, they are working for the same board of directors in Tokyo as they were before moving to the West.

There are many concrete examples of management practice that have seen modified to fit the local environment. But it is the less tangible aspects, such as communication, decision making and delegation, that cause conflict between expatriates and locals when expatriates continue their Japanese ways. Local managers need to be aware of this as much as the recently arrived expatriate.

The Japanese, transferred to the West, cannot be expected to become Westerners overnight. Nor should they. The responsibility for establishing good working relationships lies on both sides. What is most important is that both Japanese and local managers have a good understanding of the management practices of the other and how these practices have emerged from the principal cultural beliefs. The worst trap is to assume that the person from the other culture will think and behave as you do. Patience is needed, and there will be many frustrations.

Japanese cultural norms are largely followed when expatriate managers go abroad. Frequent cases of miscommunication and misunderstanding result. The Japanese view meetings as a forum to exchange information and ensure that everyone is brought up to date on the necessary issues. This may cause frustration for Western managers, who are accustomed to debate and then take a decision during this time.

The Japanese share information widely, mainly through informal conversations. These are usually first step in any decision-making process. The Japanese word nemawashi refers to these informal conversations. Some local managers said that they sometimes felt excluded. One company was accused of failing to divulge its strategic plan to any of the local management.

The Japanese decision-making process was generally found to be slower then in the West. Among the reasons put forward were:

• the Japanese involve and inform more people
• demarcation of responsibility is less clear in Japanese firms
• the Japanese are preoccupied with detail and have greater difficulty in taking an overview; and
• the Japanese seek to take linger-term view.

The classic Japanese practice of consensus management is not democratic participation in decision making. The ideas and views of all people involved in the issue, including junior and shopfloor workers, are gathered, then the most senior person takes a decision.

One company ignored its local management in the consensus process, although managers practised it among themselves and in liaison with Tokyo. Because they failed to consult the local experts, decisions were taken that were felt to be inappropriate. Local managers consequently had to “run around and correct the mistakes.”

The Japanese tend to see the manager as more of a coordinator than as a leader and decision maker. The Japanese do not associate the specific tasks being done by the manager with that person’s title or salary. Promotions occur annually. It is possible to be promoted and to continue doing the same job for some time, until a new post becomes vacant. One Japanese company turned down the personnel officer’s request for the firm to promote and award a pay rise to an employee who had been given more responsibility.

It is common to see Japanese managers involving themselves in the detail of subordinate’s work. This can demotivate local staff.

A frequent complaint among local managers is that Japanese managers fail to explain the whole context of the issue or problem when assigning tasks. They sometimes simply ask someone to do a small task and another person a related task. Westerners can find that this robs them of ownership. They generally prefer to have the whole picture outlined and then to let the locals decide among themselves how best to work together to accomplish the same objective.

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