Management Practices in Japanese and US Companies

Management Practices in japanese and US CompaniesThis Research Paper makes a summary comparison of cross-ethnical look into conducted in the last hug drug to fifteen years in the atomic number 18as of human race Resource Management Management trend and negotiation Strategies in Japanese and US companies. The different Research Studies in these ternion atomic number 18as study the influenceing possibilities for Japanese and US companies on two different take aims At headquarters and at subsidiary level. For each one of the three research topics, a Roadmap is drafted with concrete steps and strategies as to how these companies should adapt their trouble practices in these 3 beas in order to be even much conquestful. The findings of this musical theme in any case cover the very central debates in the international Human Resource Management literature The Convergence vs. Divergence issue and the Standardization vs. emplacement issue. The results clearly show that overal l the dominance effect is most Copernican (i.e., subsidiary practices appear to converge to the dominant US practices). Hence the results obtained in this newspaper publisher lead to the rather surprising conclusion that for what might be considered to be the most localized of functions HRM convergence to a world-wide best practices model is clearly designate. From the authors stall his is a logical consequence of world-wideization in all cable sectors. pick out Words Road Map Human Resource larnment leadership Style, Negotiation Strategies USA Japan Cross-CulturalIntroduction to Human Resource Management Practices in Japan and in the USAFrom a historic perspective, Human Resource Management (HRM) has been identified as a key ingredient for the success of Japanese companies on world markets during the 1980s. In this decade, kindleions as to how Western autobuss could learn from Japanese HRM practices were plentiful. Only one decade later, however, Japan went into a reces sion from which its business model has not yet fully recovered. Oddly enough, these formerly choice HRM practices are now being realizeed as the root of the malaise of the underperforming Japanese economic systemA Research Perspective of HRM Practices in Japanese and US CompaniesIn the early 1980s of the last century, the Japanese concern model, and in particular its HRM model, have oftentimes been depicted as very different from Western-style management, yet often more combative (Kono Clegg, 2001). Its deep-rooted and unique cultural and institutional characteristics usually were cited as the key reasons for these differences (Pudelko, 2006). Earlier, Frenkel Peetz (1998) described a rapidly speeding up globalization-induced trim towards increasing convergence resulting from global competitive pressures. In parallel, Katz, Darbishire (2000) noted a clear trend towards convergence in key patterns of HRM practices among industrialized countries. This phenomenon they call o verlap divergences. In parallel, the research of Frenkel Kuruvilla (2002) concludes that employment relations patterns are being determined by the interplay of what they define as three distinct logics of action The logic of global competition, resulting in the pursuit of global best practices and ultimately global convergence does not allow local insular cross-cultural happiness and coziness whatever longer.One reason that the USA has achieved its dominant status in the 1990s was its superior economic performance. The conclusion from these findings were that if the durabilitys of a successful economy are grueling in industries characterized by intense international competition such as IT, computers and electronics the attention and the readiness to learn from it tends to be particularly strong. Such industries are often the pioneers for defining and producing best practices and the place where such global standards of management practice are set. Taylorism, or scientific mana gement, has been the prime example for a management concept claiming universal validity. Other examples were lean production, kaizen, re-engineering and management by objectives once strong points of the Japanese economy, when they were the best practice leader in doing so. Since the implosion of the Japanese economy and with the advent of globalization, speed of action and instant flexibility to adapt to changing global market conditions were key criteria to succeed. Cultural diversity research carried out in the US and in Japan over the last one and a half decades has been that the American management model is particularly well fit to tin the required speed and flexibility to cope with rapidly changing economic and technological conditions. Consequently, the USA became again the dominant role model (Edwards, Almond, Clark, Colling Ferner, 2005).Summary equation of Key HRM Practices in Japanese and US CompaniesThe following diagram shows a comparison between Japanese and US fi rms HRM practices. Areas discussed are Recruitment and release of force out training and human resource development employee assessment and promotion as well as employee incentives. The comparison clearly illustrates the individualistic HRM approach in American firms as compared to the collectivism- orient HRM orientation in Japanese firms. It is obvious that in the spunky technology sector especially the team and consensus oriented HRM philosophy of the Japanese is a hindrance to success.It appears that there are several other reasons for the declining importance attached to key attributes of Japanese model (kaizen, kanban, total quality management, quality circles, team work). upright like the Japanese firms have to learn from best practice solutions from other countries, these attributes have already been adopted by American HRM managers in the last 20 years, therefore are less significant in the forthcoming as sources for orientation. The variety shows brought about by glob alization in the competitive environment probably besides have played a role. For the future, fundamental developments such as globalization require substantial on-going responses from multi-national companies to maintain competitiveness. Figure 1 compares Japanese and US HRM practices and their competitive impact on HRM management in general.Figure 1 Comparison of Japanese US HRM Practices in 4 Key AreasHRM heavensJapanese HRM PracticesUS HRM Practices1. Recruitment Release of PersonnelRecruitment of new graduates to a permanent positionSelection based on inter- own(prenominal) skillsLife-long employment philosophy low cater turnover rate= noble homageManagerial positions filled with internal staff singleFinding the best candidate internally or outwardly purchasableSelection based on performance/expertiseJob hopping philosophy pouts individual goals above company interestsPositions filled with best expert availableCompetitive Effects of respective HRM PracticesSlowness tow ards intentionLack of external expertisePromotes rapid innovation from inside or outsideLow loyalty to employerHRM SectorJapanese HRM PracticesUS HRM Practices2. didactics HRD DevelopmentBroad training towards generalist get it onledgeExtensive training based on work radical approachEmployee is trained to fit corporate cultureSpecific training for specific tasks onlyTraining is limited and focused on the individual onlyLittle effort to mould the employee towards the corporate cultureCompetitive Effects of respective HRM PracticesFocused on corporate culture buildingFocused on individualism to promote successHRM SectorJapanese HRM PracticesUS HRM Practices3. Employee Assessment Promotion tenseness on seniority and not on performanceEmphasis on group achievementsQualitative informal evaluation criteria life path broad based in several DivisionsEmphasis on individual success onlyEmphasis on individual achievementsQuantitative measurable criteria and objectivesCareer path mostly confined to one functional part onlyHRM SectorJapanese HRM PracticesUS HRM Practices4. Employee IncentivesA mix of material and immaterial incentivesPay increases based upon seniorityLittle difference between top management compensation levels and workers Low with 201Emphasis is on material incentives Pay + bonusPay based upon individual performance onlyVery giant differences between top management and workers laid-back with 1001Competitive Effects of respective HRM PracticesSlow promotion for top performersSlow climate of innovationQuick promotion for top talentsInnovative staff ensures innovative corporate climateProposed cross-cultural Roadmap for a strategical HRM ApproachThroughout the research reports analyzed for this paper, globalisation demands a broader-based strategic HRM response by Japanese firms on this more than 90 % of the interviewed Japanese Executives agreed. The results from the American respondents showed that they considered it to be a particular strength of the American HR management. Japanese managers agree in turn, that their process based incremental improvements concepts will lose in significance in the future.Furthermore the research data clearly shows that only Japan management has a distinct desire to change its own HRM model in a rather countrywide way. This definitely can be described as a paradigm shift. The following Figure 2 gives some key thoughts and elements for such a strategic approach to HRM tasks in the future.Figure 2 A cross-cultural Roadmap for a strategic Approach to HRM Tasks in the FutureDrivers of Global sorts in HRMElements causing ChangesImpacts of Change Elements on HRMNeed to reduce costs invigorate of product innovationQuality of serviceKnowledge of client needsStaff motivationTraining in design to cost methodInnovative methods in product managementStaff motivation and skills trainingMarket knowledge has to be communicated individualist performance alone countsRisksinvolvedOverall corporate managem ent philosophy has to be benchmarked against industrys best practiceKey ChangesneededHRM has to install and accompany a change management processIndividual performance evaluation has to abolish consensus-based group performance evaluation conceptsConclusionsHRM has to become the crusade integrative force for the carrying out of the Corporate Business jutResulting Roadmap for HRM StrategyHRM Parameters that need to improve the Competitiveness of CorporationsHRM ParameterExpected Benefits from HRM Changes strategical HRM Plan has to be part of Business PlanFuture staff qualifications are in sync with corporate business planBusiness Plan has to contain Change Management ConceptHRM develops a long term focus linked to strategic corporate objectivesInnovative Career DevelopmentAllows quick promotion of top performersInnovation oriented recruitingSpeed up innovation cyclesPromotion based on merit onlyDoes away with risk minimizing attitudeIntroduction Best HRM Practice ConceptHRM does self-abnegation of its performance against key competitorsStrategic HRM Implementation RoadmapOverall Strategic HRM ObjectivesHRM is the binding link of overall corporate business strategy to the employees of the companyHRM promotes innovation and change culture in the companyPlanning Horizon of elect HRM StrategyLong term plan over 20 to 30 yearsStrategic plan over 5 yearsOperative rolling plans over 2 to 3 yearsTop Management Support required to run by means of new HRM StrategyHRM has be a board level responsibility with staffing and budget to implement HRM Strategy chosenIntroduction to cross-cultural Management StylesGlobalization has changed the managerial tasks of US and Japanese mangers dramatically umpteen have to work now in an international environment, in Japan or in the USA. Reasons for these changes were join ventures, mergers, acquisitions and cooperation alliances. In the 1980s, Japan taught the work what kaizen kanban, total quality control, etc meant in terms of competitive advantage. So the US managers had to learn these concepts. Towards the end of the late 1990s, the US had caught up with this cross cultural learning approach.Then the globalization effect came to full speed suddenly the individualistic type of US management proved to be much more flexible and successful then the slow consensus-based Japanese management style.Research findings towards different Business Cultures in Japan and in the USThe research for this paper showed that the business cultures in Japan and in the US differ in 5 key categories1. Power Structure National level versus international level egalitarian approach versus non-egalitarian approach centralized management forms versus decentralized management practices. In the authority-driven business environment still prevailing in Japanese companies, aspects of power play a critical role. This slows down decision making, as power issues dominate business cultures dominating innovative US companies (Browaeys 20 09).2. mess Relationships Collectivism versus individualism team orientation versus individual focus. Japanese collectivism is documented in its overemphasis on team issues where consensus finding warrants longer times until a decision is being taken (Dickson 2003). Management emphasizes group loyalty, relationships in groups prevail over individual tasks. Americans have lesser loyalty to their companies, they condition employment as a temporary issue for the mutual benefit of employer and employee.3.Tolerance for Risk-taking High avoidance levels versus low avoidance levels bureaucratic orientation versus non-bureaucratic orientation. The consensus-based Japanese business culture tries to diminish uncertainties through an over-emphasis on preparedness. As a result, they do not like to change plans once they were approved (Yamazaki 2008).US companies treasure the opportunities offered in risky endeavors a plague for traditional Japanese companies4. Masculinity/Femininity Role d ifferentiation between males and females at society and organizational levels. Japanese managers are expected to be bumptious and decisive, with sex roles clearly defined. This means fewer women progress to managerial positions in Japan, whereas in the US women climb to administrator posts on a much more regular basis (Jacofsky 1988). wrench for Japanese managers is seen as the center of life interests. Edwards 2005)5. Time Orientation Long term view versus short term view in business planning and strategy formulation. The time perspective in their business philosophy Past/present in Japan versus present/future perspective in US companies. American companies are a lot quicker to react to new opportunities what was successful in the past is less outstanding than new opportunities which lay ahead in the near future (Dahl 2004). The retrospective business approach of Japanese companies has them look for long-term relationships. US companies take the present and look quicker and oft en farther into the future. This speeds up their decision making processes and facilitates the acceptance of risk taking among their executives (Tsui 2007).Research findings towards Key Managerial Skills in Japan and in the USEffective cross-cultural management skills have to fit the prevailing national business culture where they are being applied to on their workplaces. In individualistic business environments as in the US, new employees are being hired on the basis of their personal records. In the collectivistic business culture of Japan, recommendations from elite universities or from family members who already work for the company play a vital role. The following key managerial functions have been analyzed in research paper Reward allocation and employee motivation employee participation and managerial communication executive development.1. Reward Allocation and Employee Motivation The proper allocation of rewards is the driving force of the individualistic US business environ ment Rewards are expected to be equity based, i.e. based upon an individuals contribution to corporate success. Rewards are supposed to be equal for equal performance Rewards have to based upon the specific needs of a position (Riley 2007). In the more equality and group oriented Japanese business culture, rewards are being allocated on a group basis. These research findings did prove that the application of in permit reward systems caused feelings of de-motivation and injustice (Buttery 2000)2. Employee Participation and Managerial intercourse To get employees to participate in goal setting in a US company is daily business, as in this way it increases the employees involvement in how his work environment is being shaped. Given the individualistic US business culture team effectiveness rises if team members are personally accountable for their personal contribution, which can be measured i.e. management by objectives (Javidan 2006). In the more brotherlyly oriented Japanese Busi ness culture, employee participation is more socially oriented and the employees display lower levels of power distance between organizational levels (Hofstede 1980)3. Executive Development In an American business environment, qualified staff is classified into high potential groups for future executive positions at a much earlier stage of their vocation and at a much younger age as compared to the Japanese business culture. This encompasses a mix of specialist type of work assignments combined with near executive project assignments, to give them an early feeling of how an executive ticks (Yamazaki 2008). Japanese companies tend to focus on generalist type of assignments with intensive functional and geographic job rotation at almost the same hierarchic levels. Promotion is by seniority criteria mostly (Saee 2010). In consequence this implies Executive development in US companies is based upon the potential benefits seen in a petty(prenominal) executive, whereas the Japanese app roach is more oriented towards rewards for the past performance (Raimo 2009).Proposed Roadmap for a strategic cross-cultural Management StyleThe following Figure 3 gives a strategic roadmap for a cross-culturally based management style which facilities quick and efficient adaptation to cross-culturally different work environment.Figure 3 A cross-cultural Roadmap for a strategic Approach toDrivers of cross-cultural Management StylesManagement Style DevelopmentCommon Management Skills DeficienciesNegative Impacts of missing cross-cultural Management SkillsLack of employee motivationIn-adequate communication styleDe-motivating reward systemSlow pace of promotion systemLack of managerial skills trainingPerformance is not recognized/rewardedWork objectives unclear=de-motivatingIndividual motivation not releasedResistance to innovationsNecessary changes do not take placeRisksinvolvedMix of management skills not suited for work environmentHigh potentials are not identified and promotedHigh staff turnover slow pace of innovation and change managementKey ChangesneededHRD concept oriented towards cross cultural sensitivityTop management involvement in management skills profile developmentCross-culturally oriented career development systemConclusionsAn innovative HRD approach is neededDesigned by managers with local management experience HRD skillsResulting Roadmap towards a cross-cultural oriented Management StyleManagerial Skills that need to be improvedManagement Skills requiring AttentionExpected Benefits better Management StylesReward systems motivation toolsKeep staff and attract talentsCareer development system for talentsQuick promotion for high potentialsInnovative pay systemIncreased motivation to innovateClear set of managerial objectivesRewards are measurable and objectiveInternal PR for new management styleMore credibility for management stylesTop managers have to practice this style superfluous motivation to manage/risk changesStrategic Management Skills Implementation RoadmapOverall Strategic Management Skill Development ObjectivesAnalyze requirements for necessary cross-cultural management skillsIncorporate necessary changes into overall management philosophy and corporate missionDocument and promote concept at all managerial levelsPlanning Elements for chosen Management Skill Development StrategyAssess time and research requirements correctly involve superiors where neededInvolve top management team properly and show their support in public statements/info releasesManagerial Support required to implement new Management Skill Development StrategyDevelop a strategy paper involving top management and clarify roles and inputs and state resource requirements as compared to potential gains from these improved management skillsIntroduction to cross-cultural Negotiation StylesCultural Diversity is one of the most critical issues in international negotiations. A key requirement for successful international negotiation is the extent to wh ich the negotiating parties are capable of understanding the negotiating habits and thoughts of their counterparts who come from another culture (Brett 2000). When entering into an international negotiation process, the full awareness and understanding of the cultural differences, such as cultural background, national character, emotional aspects, rules and regulations of other countries, decision making styles, ways of discussing, meeting and negotiating is of vital importance in order to make the negotiation successful. The difficulty the negotiators are facing have to do with adopting on the basis of different sets of set, attitudes, behaviors and communication styles of the other party participating in the negotiation process. The proper planning and preparation for negotiations, and participating in the negotiation process must take into good will all these factors. This will avoid setbacks, surprises and shock so often go about in cross-cultural negotiations.A. Basic Resea rch Findings linking Negotiation and CultureA nations culture in itself consists of interrelated patterns or dimensions which come together to form a unique social identity shared by a minimum of two or more population It is the unique character of a social group and the values and norms common to its members that set it apart from other social groups (Brett, 2001). Consequently for this reason, because of the different values and norms, people from different cultures negotiate differently (Brett, 2001). Many authors talk of a set of cultural values associated with each cultural group which actually is the determining force for the culture (Tinsley, 2001, Brett, 2001). The knowledge of these values and norms provides sagacity into the choices do and influences these very negotiators cognitions, emotions, motivations and strategy. Research shows a clear differentiation Whilst values refer to what a person considers important (more on cognitive side), norms refer to what is conside red appropriate behavior (behavioral aspects) in a specific culture. Consequently, because of these different values and norms, people from different cultures tend to negotiate differently (Brett 2001). These cultural values and norms shape unspoken theories invoked in negotiations (Gelfand and Dyer 2000) and whitethorn influence a negotiators response to strategically displayed emotions. In Japanese companies, the emphasis of a group being the core nucleus for negotiations communicates these values to its members and rewards conformity. In this way a members values become thoroughly culturally constituted. Thus, culture throws an overall environment for Japanese companies and their negotiators which in many ways forthwith or indirectly compels the constituent members to be guided by their cultural value sets while negotiating.B. Research Findings concerning the strategic Framework of cross-cultural NegotiationsAccording to the take hold The Global Negotiator Making, Managing, and Mending Deals around the World in the twenty-First Century (Salacuse 2005) there are a total ten particular elements systematically complicating intercultural negotiations. 1) Negotiating goal Contract or relationship? 2) Negotiating attitude Win-Lose or Win-Win? 3) Personal style Informal or formal? 4) Communication Direct or indirect? 5) Sensitivity to time High or low? 6) Emotionalism High or low? 7) Form of agreement General or specific? 8) build an agreement Bottom up or top down? 9) Team organization One leader or group consensus? 10) Risk taking High or low?Research shows that for a Japanese manager negotiation is also about being sensitive to the personal/emotional factors and hence may sometimes be indirect, informal, and general with less sensitivity to time whereas. On the other side for a negotiator from USA, any negotiation is to the point, direct, formal, with high consideration for time and less care for personal or emotional factors.B. Research Findings concern ing Diversity Factors and Strategies in Cross -Cultural NegotiationsIn countries such as in the US and much of northern Europe, strong, direct eye contact conveys confidence and sincerity while in Japan, prolonged eye contact is considered rude and is generally avoided. In Japan they always prefer personal space during business dealings. With regard to the Japanese, Salacuse shows that 100 percent of the Japanese respondents claimed that they approached negotiations as a win-win process.Communication itself constitutes a prefatory component of negotiation framework. Diversity in this communication aspect is also very obvious and pertinent. In a culture that emphasizes directness, such as the American one, you can expect to receive a clear and definite response to the proposals and questions. In SE Asian cultures such as the Japanese reaction to proposals made to them may be gained by interpreting seemingly vague comments, gestures, and other signs.Concerning the cultural sensitivi ty to time, Salacuse in his study quotes Japanese tend to negotiate slowly, and Americans are quick to make a deal. Contrary to this perception of time, for Americans the objective is a signed contract and as for them time is money, they want to close a deal quickly. Americans therefore try to reduce time invested in formalities to a minimum and get down to business quickly. Japanese and other Asians, whose objective is to create a relationship rather than simply sign a contract, need to invest time in the negotiating process so that the parties can get to know one another well and determine whether they wish to embark on a long-term relationshipAnother crucial aspect in cross-cultural negotiations is risk taking ability. The Japanese tend to be highly risk averse in negotiations, and this tendency was affirmed by the survey conducted by Salacuse, which show Japanese respondents to be the most risk averse of the twelve cultures. Americans in this survey, by comparison, considered t hemselves to be risk takers.C. Research Factors concerning the Management of Conflict in cross-cultural NegotiationsResearch findings with regard to managing conflict in cross culture negotiation show that different cultures focus on different aspects. Tinsley (1998), revealed that when managing conflict American managers pet to focus on interests, while Japanese managers concentrated on status power. The differences could be explained by the American value for poly- chronicity (or multitasking) and the Japanese occupation with hierarchy (or inadequate social structures. It is obvious though, that awareness of emotions is vital to negotiation and it plays a key role when it comes to cross-culture negotiation conflicts. In the Japanese business culture, status and power also play an important role in conflict management where parties try to manage conflict by using differences in authority, status and power. To them it is normal that high status parties try to enforce their ideas fo r resolution on lower status parties. If this is not possible, Japanese negotiation parties try to enhance their status by co-opting people of higher status.D. Research Findings concerning cross-cultural Decision-Making styles during NegotiationsDecision-making styles vary a lot between Americans and Japanese. When it comes to team based versus individual way of taking decisions one extreme is the American negotiating team with a supreme leader who has complete authority to decide all matters. The Japanese business culture stresses team negotiation and consensus-based decision making. American managers usually tend to make decisions by themselves, while Japanese managers tend to make decisions by consensus. Furthermore, Americans treasure the value of flexibility, whereas once a Japanese manager has reached a decision, may believe it is shameful to change it. Decisions can be taken either through a deductive process or through an inductive process. In his research, (Salacuse 2005) f ound that Americans do view deal making as a top down (deductive process) while the Japanese tend to see it as a bottom up (i.e. inductive) process.E. Research Findings concerning the Interests Strategy in cross-cultural NegotiationsThe process of aligning and integrating the best interests of both parties works as a catalyst for successful negotiation. This interests-based strategy promotes the resolution of dilemmas through cognitive problem solving. Research shows is essential to shift focus from position to interest. Several authors suggest that as both parties want to gain their individual interest therefore they always want to implement the negotiation. From their perspective, individual interests of parties are always more important than collective group interests.A cross-cultural Roadmap for a strategic Approach to Negotiation StylesThe following Figure 4 shows a roadmap for the development of efficient cross-cultural negotiation styles.Figure 4 A cross-cultural Roadmap for a strategic Approach to NegotiationDrivers of cross-cultural NegotiationsCommon Negotiation DifficultiesNegative Impacts on Negotiations