1. What is Kaizen? Kaizen is a system for continuous improvement in task procedures on a job. It is a new way of looking at work that emphasizes constantly trying to improve the product/service and the way it is produced. Puts a lot of pressure on worker s, management, and the organization.
2. How do the Japanese promote social integration to further company goals? They use group meetings to get input from everyone. Supervisors have a helpful attitude toward their workers. Most important, the company adopts many symbols to emphasize the uni ty & equality of workers: a common cafeteria, a company motto, uniforms, one parking lot, and rallies.
3. What changes did the Japanese make in the practices that US workers were accustomed to, at the old GM plant? They added Kaizen, a line stop process to correct defects, and they trained workers in various jobs so that they could use job rotation. They also created team work and worked toward consensus decisions. They created few job titles and did away with the large number of narrow job titles in the old plant. They demanded higher quality from suppliers.
4. What did the US workers say about the Japanese ways? Although some were critical -- especially those not hired -- most seemed positive about the changes. They particularly liked the greater openness to worker inputs.

We will call this system cooperative management in our class discussions from now on.

2. Characteristics of the Japanese Corporate System and Human Resource Management

1. Long term perspective on company goals and performance (made possible by role of banks and government). Can afford to spend more time adapting technology to changing conditions. No short term pressure to succeed.
2. Permanent employment -- for large firms in Japan, with about one-third of the labor force, lifetime employment is possible. Made possible by (1) hiring temporary employees; (2) hiring women; (3) bank guarantees; (4) government help; (5) paying variabl e bonuses instead of fixed salaries; (6) hiring young people at low wages; (7) very selective hiring.
3. Seniority governs promotion. Made possible by (1) team basis of performance evaluation; (2) very selective hiring; (3) workers gaining experience in all phases of the company's activities.
4. Company loyalty. Firm will not embarrass an employee who makes a mistake. Built on practices such as uniforms, after-hours socializing, strong group solidarity.
5. Separation of rank and job task: sections are the functioning unit with collective responsibility, NOT individuals. (See point 3).
6. Low differences in pay and status between the top and bottom. In Japan, ratio of pay at top to pay at bottom is low, maybe not more than 10 to 1. Versus, in the US, ratios of 100 to 1.

 

7. Bottom-up management: many of the above points reflect a different orientation of Japanese management -- consensus building. Managers feel more accountable to employees than to stockholders.

2. Sounds good -- what could be wrong with this system?

1. Loss of individuality and submersion of individuals within a group
2. Loss of merit-based and individually-based incentives. Less incentive to try to stand out.
3. Work stress -- long hours and high responsibilities.

Summary points:

1. Japanese firms do well, in part, because of different culture, political system, and financial system.
2. BUT, also succeed because of managerial system -- human resource management --the way work is organized
3. AND these features can be copied, to some extent