Teamwork is Japans Thing

Motivation is never a critical issue. Perhaps because of the country’s history as a feudal planting and harvesting culture, Japanese workers tend to be consummate team players. Corporate Americans spent millions of dollars in attempts to establish efficient, productive work teams, with a questionable degree of success. To the Japanese, however, teamwork is as natural as breathing.

Intense loyalties and deep personal attachments develop in the ka, or work group. Socializing after business hours assists further to strengthen social bonds and is part of each employee’s duty to the company. Individual sacrifice and devotion to team efforts are the norm. That structure sometimes leads to over-conformity, but management strives to place talented people in position where they can best serve the organization.

New recruits enter the workplace by participating in a solemn ceremony that stresses loyalty and dedication to company values. That is the beginning of a long rite of passage, usually about 12 to 15 years. For the first six years, their salaries remain fixed. Only after they have demonstrated a capacity for hard work and a respect for their boss can they move up the ranks. And only after a dozen or so years of service are they eligible for top jobs within the corporate hierarchy.

Comparing How Japan Measures Performance

MostU.S.companies still use some form of return on investment as a primary measure of financial performance. This method is intended, obviously, to bring together both profit and investment management in order to yield a satisfactory return on capital and, ultimately, a return to shareholders. A number of scholars and some business people have argued, however, that obsessive adherence to the ROI objective results in a bias toward short-term results at the expense of the long-term future of the business. Prices are raised to increase profits, products are cheapened to reduce costs, and strategic expenditures are avoided. On the investment side, investments in capital with long payback periods are avoided.

As mentioned earlier, Japanese companies use return on sales as a primary measure of financial performance, but it should be understood that they do so in the context of a competitive market viewpoint that effectively assumes no price increases. The goal of no price increases, then, necessitates both cost savings and volume increases. Obviously, price reductions should drive volume increases, all other things considered, but it appears as though Japanese managers also understand that in a competitive environment a steady stream of new product introductions of higher quality and more features, especially if offered at lower prices, will increase volume. Those new products with additional features obviously cannot be provided without appropriate levels of strategic expenditures for new product development. Thus, the Japanese view declining prices, increased product capabilities, lower costs, product development, and increasing return on sales as fundamental components of long-term profitability.

Even though Japanese companies are not utilizing ROI specifically as a primary measure of financial performance, they do manage their investments. For example, the levels of inventory being carried by leading Japanese companies are far less than the levels of their American counterparts. We have seen Japanese companies turn their inventories more than 100 times a year. ComparableU.S.companies do not achieve 10 inventory turns annually. Similarly, Japanese companies use space and equipment very prudently because they recognize the high cost of space in their country. As a result, when one walks through a Japanese plant, one is impressed with the tightness and absence of excess. Many Japanese executives do not have elaborate offices; rather, managers frequently are located in “bull pen” arrangements close to the action on the manufacturing floor. The absence of high inventories eliminates the need for large warehouses and manufacturing space committed to work-in-process inventories.