The document discusses the management practices of Japan and South Korea that contributed to their economic growth. It notes that both countries allowed more government intervention in the economy compared to Western models, which led to sustainable growth over 30 years with lower inequality and poverty. Key Eastern management approaches included consensus-based decision making, lifetime employment, emphasis on groups and seniority, strong government-business relationships, and Confucian work ethics. These differed from Western approaches that focused more on individualism and short-term profitability. The document argues that adopting elements of Eastern management techniques, along with developing country-specific practices, can help other nations and businesses achieve economic gains.

1. Japan & South Korea

2. “ Management can be defined as an art of getting things done
through people ”
MARY PARKER FOLLETT

3. Joseph Stiglitz in his book, Freefall: Free Markets and the
Sinking of the Global Economy, said that East Asian nations are
refusing to take on the Western model, but grew more naturally
and assured as they were influenced by easternization and “that
the benefits were shared equitably
Countries such as Japan and
South Korea were able to do this
by allowing the government to
take an active role in managing
the economy. We need to
Easternize the markets.
Government intervention in East
Asia led to sustainable growth
for over thirty years.

4. Markets flourished and as a result inequality and poverty were
much lower in those countries.
Stiglitz argues, that the financial crisis in Asia in the late 90′s was
a result of “rapid liberalization of financial and capital markets”,
much like the liberalization of the markets in US.

5.  More Government intervention
 Sustainable & Stable growth
 Inequality and poverty were much lower
 Control in liberalization
 Works on long-term goals
 Higher preferences for employees

6.  Japan is an East Asian country located in the pacific ocean.
 It has an unitary parliamentary government.
 Japan is in 62nd largest country in the world, and in population it is
at tenth position.
 Japan is world’s fourth largest exporter and importer in the world.
 The major source of strength is in the development and diffusion
of new management techniques such as just-in-time production and
total quality management.

7. Japan believes in technology and quality, not in capital-
intensive.
 Japan’s remarkable technological advancements and
industrialization allowed them to produce increasingly
powerful military equipment.
This countries now follows eastern approach in its
management and we can see that poverty is very low, also the
economy is stable.

8. SCIENTIFIC SELECTION PROCESS
LIFETIME EMPLOYMENT
SENIORITY SYSTEM
CONTINUOUS TRAINING
EMPHASIS ON GROUP WORK
DECISION MAKING
COMPLICATED PERFORMANCE EVALUATION
FATHER LEADERSHIP
GOOD BENEFITS FOR EMPLOYEES
SIMPLE AND FLEXIBLE ORGANIZATION

9. SCIENTIFIC SELECTION PROCESS
There are only 30 top business colleges in Japan and those
who study in that colleges only have the chance to work in
large company.
These large company’s conduct competitive examination
and those who pass the examination can gain jobs. Company
provide their own training.
LIFE TIME EMPLOYMENT
Under lifetime employment an employee spends his entire
working life with a single enterprise.
Ensures job security in the employee and a feeling of
belongingness towards the enterprise.

10. SENIORITY SYSTEM
Employment companies following this concept; provide
privileges to older employees who have been with it for a long
time.
Promotion and wage increases are based on employee’s length
of service in the company, not job performance.
CONTINUOUS TRAINING
The secret of the success of Japanese managers may lie in
“continuous training”.
In western organizations, employees receive training only to
acquire a new skill or to move to a new position.

11. EMPHASIS ON GROUP WORK
In most Japanese organizations, a task is not assigned to an
individual; instead several tasks are assigned to a group, which
consists of a small number of people are treated like family
members.
Probably this is the reason why employees take great pride in
their company and its success.
DECISION-MAKING
The practice of managerial decision-making in Japan is built on
the concept that change and new ideas should come primarily
from personnel belonging to lower levels in the hierarchy.
Thus in Japan lower level employees prepare proposals for
higher-level personnel.

12. COMPLICATED PERFORMANCE EVALUATION
When job description is not well defined and when tasks are
performed by groups, it becomes difficult to evaluate individual
job performance objectively.
The evaluation of workers and managers in Japanese
corporations takes a very long time up to ten years and requires
the use of qualitative and quantitative information about
performance.
FATHER LEADERSHIP
The task of a leader is not only to supervise his people at
work, but also to show fatherly concern for their subordinate’s
private life.

13. GOOD BENEFITS FOR EMPLOYEES
Japanese companies provide substantial benefits to their
employees.
Salary enhancements become rapid after about seven years of
employment with the firm. Each firm considers employees are
more valuable.
SIMPLE AND FLEXIBLE ORGANIZATION
In Japanese firms, the organization structure is relatively
simple flexible, and it possible for people to take up a new
challenge or a new task by forming a new formal or informal
group.
Informal organization wield considerable power in formal
organization.

14. TRADITIONAL MANAGEMENT PRACTICES
THE RINGI SYSTEM
ENTERPRISE UNIONS
QUALITY CIRCLES
SCIENTIFIC MANAGEMENT
PERVASIVENESS OF ENGINEERS

15. TRADITIONAL MANAGEMENT PRACTICES
in-house training of managers.
consensual and decentralized decision-making.
extensive use of quality control methods.
carefully codified work standards.
emphasis relations among workers.
lifetime employment and seniority-based compensation

16. THE RINGI SYSTEM
The traditional decision-making process in Japanese firms is
referred to as the ringi system.
The system involves circulating proposals by middle managers
or by top executives to all managers in the firm who are affected
by an impending decision. There opinions are taken regularly.
When a decision proves beneficial, the middle-level managers
who initially advocated it receive credit; when a decision proves
unsuccessful, responsibility is taken by top-level executives. This
practice is intended to promote aggressiveness in younger
managers.

17. ENTERPRISE UNIONS
One distinctive characteristic of labor-management
relations in Japan is the enterprise union, which is organized
around a single plant.
Japanese unions are distinct not only because of their highly
decentralized nature, but also because they represent both
white-collar and blue-collar workers.
The fact that many upper-level managers have moved up
through union ranks and may have even served as union officials
highlights the generally less antagonistic relationship between
labor and management in Japan.
Union membership is generally associated with lifetime
employment guarantees.

18. QUALITY CIRCLES
The extensive use of quality circles is another distinguishing
characteristic of Japanese management.
Production processes should be designed with quality control in
mind, they contended, and everyone in the firm, from entry level
workers to top management, should be familiar with statistical
control techniques and undergo continuing education on quality
control.
Quality circles provide a means for workers to participate in
company affairs and for management to benefit from worker
suggestions. Indeed, employee suggestions play an important role
in Japanese companies.
Japanese employee suggestions reportedly create billions of
dollars' worth of benefits for companies.

19. SCIENTIFIC MANAGEMENT
Japanese management techniques have been strongly
influenced by the tenets of scientific management.
The pioneering figure of scientific management is Frederick
Jackson Taylor (1856-1915).
Taylor is best known for his time and motion studies of workers
as part of an effort to optimize and standardize work efforts, but
he also argued for a system of bonuses to reward workers based
on productivity.
Scientific management techniques are also used in the
production process.
 Eastern management approaches usually relies in Scientific
management practices

20. PERVASIVENESS OF ENGINEERS
Japan produces up to three times as many engineers a year as
the United States.
Japan's emphasis on production oriented engineering which is
consistent with its dominant competitive strategy.
 Engineers in Japan focusing on improving existing products or
processes rather than developing completely new ones.

21. South Korea is a Presidential Government Country with Seoul as
its capital.
It is in the 109th position in area and 24th position in population.
South Korea is the 15th Largest economy in the world and
fourth Largest economy in Asia.
Main industries in South Korea are electronics ,
telecommunications, automobile production ,chemicals, steel and
shipbuilding.
Its economy is an export- driven.
Korea’s Labour force by occupation is as :
agriculture: 7.3%; industry: 24.3%; services: 68.4% (2010)

22. The Koreans have accomplished remarkable economic success
since the 1960s, and their management system has played a
major role in contributing to this phenomenal economic
achievement.
The external environment of the Korean management system
is a crucial factor in understanding it.
In this kind of environment, the role of government is
prominent because without active support from the government,
no enterprise can survive and prosper.
 Government, effectively formulated and implemented the
economic policy and economic planning, and in business,
entrepreneurs and managers boldly formulated and skillfully
implemented business strategies for their enterprises.

23. For economic growth, the government and business have
maintained a supplementary and complementary relationship.
The effective use of human resources is a key to effective
management. Therefore, if the Korean management has been
effective, this should be attributed to effective human resource
management.
The Korean management of human resources has been as
unique as the Korean management system.

24. DECISION MAKING IS NOT CENTRALIZED
LIFETIME EMPLOYMENT
INDIVIDUALISM IN GROUP SETTINGS
SIGNIFICANCE OF PROMOTION
 LEADERSHIP
CLOSE RELATIONSHIP BETWEEN GOVERNMENT AND
BUSINESS
CONFUCIAN WORK ETHICS

25. DECISION MAKING BY IS NOT CENTALIZED
Decision making by consensus is practiced in Korea as in Japan.
The Koreans call it "the pumui system.
The process is basically the same as the ringi system, which was
discussed in the section on the Japanese management system.
Every employee gets a chance to express their thoughts.
LIFETIME EMPLOYMENT
Lifetime employment is also a traditional concept in the Korean
management system.
Once an employee is hired by an organization, he is guaranteed
lifetime employment until he retires.

26. INDIVIDUALISM IN GROUP SETTINGS
Individualism in a group setting is a unique feature of the
Korean management system.
Nevertheless, it is not permitted to stifle individual aspirations
in the context of group settings.
One of the most important roles of superiors is, therefore, to
promote individual aspirations in order to achieve organizational
goals.
SIGNIFICANCE OF PROMOTION
Promotion is very important in the Korean management system
because it becomes a crucial criterion which measures the success
or failure of an employee.

27. LEADERSHIP
The leadership style in the Korean management system in
general is authoritarian and paternalistic.
An organization is interpreted as an extension of a family, and
relationships within the organization are similar to those within a
family.
A manager is a superior, but he does not play a father role to his
subordinates, and a subordinate in turn rejects any consideration
of himself playing the role of a son to his superiors.

28. CLOSE RELATIONSHIP BETWEEN GOVERNMENT AND
BUSINESS
The relationship between government and business is very close
and cooperative as it is one of the feature of Easternization.
Traditionally, the government sets up industrial policy mainly
through five-year economic plans, and business enterprises
conduct their businesses by fulfilling these government plans.
Business leaders sometimes take initiatives in proposing new
ventures to be included in the forthcoming economic plan.

29. CONFUCIAN WORK ETHIC
The Confucian work ethic, or hard work, has been an important
norm in organizations in South Korea.
This work discipline was proved eloquently in the 1970s when
many Korean employees were working in Saudi Arabia and other
Middle East countries.
People there were amazed and impressed by the discipline and
long working hours of the South Koreans.

30. Easternization Westernization
DECISION MAKING: Consensus By individual
or majority vote
DURATION OF : Lifetime No guaranteed
EMPLOYMENT employment employment
INDIVIDUALISM : Individualism Individualism
VS GROUP SPIRIT as strong as persistent
team spirit
LOYALTY OR : Extremely Not critically
COMMITMENT strong important

31. Extremely
SENIORITY : important Strong
Exclusively Both inside
MANAGEMENT and outside
: inside
DEVELOPMENT promotion promotion
LEADERSHIP Authoritarian/ Mostly
STYLE : participative
paternalistic
Based on Mostly based
COMPENSATION : seniority on merit rating
GOVERNMENT Close relation No direct
AND : and cooperation relation
BUSINESS

32. Westernization favors Rationality and other European
norms, Individualism has got higher predominance in Western style.
It is
always money-oriented.Another defect is that mobility and
orientation is always toward short-range goals. Other features are
De-emphasis of the seniority system ,Protestant work ethic.
Western firms go for maximum profit.
In Easternization there is more Government intervention in the
business. As a result Sustainable & Stable growth is acquired.
Inequality and poverty between people were much lower.
Control in liberalization is there, thus government could control
business. More importantly Eastern firms concentrate and in works

33. With Easternization…we can say that not the application of
capital-intensive, but instead use of a radically new set of
management techniques is important. It is now clear that the
major source of this strength of Japan & Korea is in the
development and diffusion of new management techniques such
as just-in-time production and total quality management.
Everyone should introduce these management techniques and
can have significant benefits, not just in lowering costs but also
in improving product variety and quality, and in being able to
satisfy customer needs more effectively.

34. Firms implementing these new management techniques in a
range of developing countries in Asia, Latin America and sub-
Saharan Africa (as well as the INDIA,UK and the USA) - shows that
considerable gains can be achieved even in low-income countries
with poor levels of human resource development. These
management techniques improve the performance both of the
implementing firms and the overall economy.
But success is not automatic and many firms fail in their attempts
to introduce these new managerial techniques. Based upon the
results of primary research the author argues the case for actively
promoting the rapid diffusion of these techniques and identifies
policy implications for governments, management and labour.
Moreover, as the research shows, success cannot be achieved by
trying to replicate the social relations used by the any nation. A
new path has to be identified, one which builds on the specific
cultural and political experience of individual firms reaches new
heights.