The different facets of Japanese corporate culture - lifetime employment, seniority based promotion, monozukuri - and how they are interlinked and could be adapted for globalization. Presented to Hosei University/Daiwa Foundation October 2009

1. A Comparison of Corporate
Culture －UK and Japan
Pernille Rudlin
Director, Rudlin Consulting Ltd
European Representative, Japan
Intercultural Consulting

2. Common features of Japanese
corporate cultures
Rinen
Stakeholder
company
Shushin Koyo
Monozukuri
Company
Craftsmanship
career
Genba Shugi Nenko Joretsu
Shopfloor Seniority based
empowerment promotion

3. RINEN Stakeholder oriented
Ensure company is for
the benefit of society
and employees but…
Globally based:
Company no longer - Mutualism Company cannot just
behaves in the - Partnerships be for Japanese
interests of society - Cooperatives society and Japanese
and employees so -Employee employees if to
must shareholding succeed globally so…
- Ownership in
trust
Gain outward focus by
making company
answerable to
international
shareholders however
Shareholder oriented

4. Stakeholder companies in the UK
• Cadburys, Frys
• Building societies
• Cooperative movement
• John Lewis
• Arup

5. If company is truly for
benefit of society and
RINEN employees, then it has SHUSHIN
the obligation to look
after employees, even KOYO
when times are bad

6. SHUSHIN Company career
KOYO Look after employees for
life so have high motivation
to ensure company
succeeds but
•Alumni concept
Layoffs cause employees •Network of Lack flexibility in downturn
lose faith in company and companies Treat overseas staff like
motivation to work hard for contract staff, so they
superordinate goals so •Secondment
behave like contract staff
must •Allow overseas & so
contract workers to
become “lifetime”
Lay off staff when need to.
Staff have transferable
skills, move companies for
career reasons however
Professional career

7. • If lifetime employment system means only
people who have been in the HQ company
since graduates can become top management,
then
– lose opportunity for fresh viewpoints
– ability to position or differentiate from other
companies
– ability to build businesses outside of Japan

8. The Return of the Office Lady
• Some Japanese companies are reintroducing
the lifetime employment OL track
• Too many mistakes and lack of commitment
from temporary staff
• Administrative work is important to the
company

9. Necessary to provide
recognition based on
length of time in the
SHUSHIN company, not just NENKO
KOYO achievements, if
employees to stay
JORETSU
incentivised throughout
career

10. Promotion based on seniority
Senior employees will
NENKO share knowledge and
skills with juniors
JORETSU because they are no
threat but
GLOBALLY
•Two track
Competition to prove promotions – grade Implicit knowledge
ability amongst and role sharing excludes staff
employees prevents •Knowledge sharing who are not in HQ or
knowledge sharing so explicitly part of cannot speak Japanese
need appraisal so
•Intranets, wikis, blog
s, SNS
Leave it up to the
individual to acquire
knowledge and use it
effectively however
Promotion based on performance

11. A more equal society
• Less disparity in pay between top
management and junior staff
– Top executives’ reward is partly respect and status
from employees, not bonus and shares from
shareholders
• Less disparity between high performers in the
short term and low performers
– Company takes longer term view than if
shareholder driven

12. Counterbalance respect
and recognition given to
senior employees or too
NENKO much dominance by GENBA
JORETSU
them from HQ by
ensuring workplace has
SHUGI
power and management
have experienced genba

13. Bottom up from shopfloor
GENBASHUGI Respond quickly to
customer needs
through shop-floor
level activities
NSG, Nomura route of
acquiring companies
Lack of overall
with strong senior
Customer service strategic view and
suffers at expense of foreign executives and prioritisation.
big ideas customers and put Overservicing. Foreign
them in top positions genba excluded
Use external
consultants??
HQ looks at the global
market overall and
sets priorities and
strategies
Top down from HQ

14. Nemawashi
• The second biggest issue (after indirect
communication) for overseas staff working in
Japanese companies
• Takes time, is not transparent, excludes
people who can’t speak Japanese, or are not
part of the HQ group.
• But is needed in companies where employees
are key stakeholders?

15. Genba given
respect because of
GENBA respect for MONO
craftsmanship of
SHUGI those who are ZUKURI
actually making the
product

16. Craftsmanship
MONOZUKURI Gives meaning to
people who prefer to
“make” things and see
them used
Global customer
education
Overdependence on
Strengthen global
Services marginalise or manufacturing and on
dominate service provision Japanese customer
manufacturing Find the appreciation of
“monozukuri” for craftsmanship
services
Sell knowledge based
services, package
product with services
Knowledge economy

17. Seeing your product
MONO being used in your RINEN
society gives a sense
ZUKURI of contribution

18. Final thoughts
• The need to be explicit about vagueness in
order to succeed globally
• In the meantime, send many more overseas
staff to work in HQ to
– improve knowledge sharing
– get involved in nemawashi/jinmyaku zukuri
– absorb the “rinen”