Eastern & Western Management Styles

1. Eastern & Western Management Styles Germany, the U.S. and Japan Carola Carstens, Nina Kummer, Britta Upsing

2. What is Management? • Staffing • Leadership and Career Development • Compensation System • Motivation and Evaluation • Communication Introduction

3. What is management ? Takeo Fujisawa, Founder of Honda Motor Company: „Japanese and American management are 95 per cent the same, yet differ in all important respects.“ Introduction

4. Recruitment in Japan • directly from school with a focus on • general characteristics instead of • technical skills as one is employed • for a lifelong period Career development

5. A successful career • After 10 years: promotion to kacho • After 20 years or more: promotion to bucho • Not before the age of 50: possible promotion to directorship Career development

6. Japan Life-long employment Seniority promotion Ultimate goal: broad experience Germany Short-time employment possible Promotion on merit Increased mobility Specialists Career perception Career development

7. Factors that determine salary • Prevailing pay • Bargaining power of unions • Individual needs • Job requirements • Seniority and education • Ability to pay Compensation System

8. The pay-package in Japan • Monthly base-pay • Semi-annual bonus • Allowances and benefits Compensation System

9. Similarities Responsibility Challenge Interesting work Recognition Money is secondary Differences Seniority wage Promotion system Importance of the group Sources of Motivation Motivation and Evaluation

10. The process of evaluation In: Japanese Management, p. 154 Motivation and Evaluation

11. HRM: Japan - USA Importance of the company for Japanese and American employees: In: Japanese Management, p. 155 73% of the Japanese 79% of the Americans Conclusion

12. HRM Japan - USA Conclusion

13. HRM in Japan „people-centered management“ • Japanese companies exist primarily “for the well-being of Japan and its people” • people before profit ? Conclusion

14. HRM in Japan Uchi no kaisha*: „Ein Unternehmen ist nichts Fremdes, Abstraktes oder Unangenehmes, sondern ein eminent nützlicher, allseits Wärme spendender Organismus.“ * kaisha = „Firma“, lit. „soziales Beisammensein“ Conclusion

15. Office Layout • Open-plan offices • No cubicles or dividers • Private space is avoided • Keep in touch

16. Office Layout “I share a spacious office area with other administrative staff members. When we work together in one big room, we can talk casually to one another. There are a lot of suggestions and ideas exchanged in these conversations.” (the president of Honda American Motors) Office Layout

17. Groups • Working groups with family-like ties • Identification with the group • The group rather than a single individual is rewarded or blamed in case of failure • Harmony is maintained Formal and Informal Company Structure

18. Working groups • Group members are aware of their status • Individual needs are deemphasized in order to maintain harmony • Dependency relationships Formal and Informal Company Structure

19. Rice cultivation • until 100 years ago, 5/6 of the population was employed in rice cultivation • Only 10% of the land can be cultivated • Crowdedness • Cooperation is necessary Formal and Informal Company Structure

20. Habatsu (Cliques) • Informal groups • Membership is based on unchangeable criteria • Graduating from the same university • Having a common hometown Formal and Informal Company Structure

21. Communication • office-layout supports the free flow of information • everybody is kept up-to-date • communication even vertically is easy • face-to-face communication is often continued in a restaurant etc.  high-context situation Communication

22. Communication Communication

23. Decision Making • popular view:  catchwords: • but reality is a little more subtle... Communication

24. Decision Making - Japan Cultural background: • “Wa”: harmony - the essence of Japanese life • „Kyodotai“: harmonic, organic cooperation of a community with friendly mutual support and understanding decisions are ideally made in this atmosphere of friendly cooperation unanimity solidarity Communication

25. Decision Making - Japan RINGI system of decision making • nemawashi: „preparing the ground“ frequent „sound-outs“ on views and positions (uchiawase) • ringi-seido: circling process Communication

26. Decision Making – Japan ringi-seido 1 ok? ok! decision form („ringisho“) sound discussion with the affected sections/ people proposal fills out Communication

27. Decision Making – Japan ringi-seido 2 • proposal is forwarded to all relevant sections/ people • each will make comments on a sheet attached to the back of the proposal section x section y ... Communication

28. Decision Making – Japan ringi-seido 3 • the decision will be made by top management based on the comments from all people involved in the process • official announcement of the approval Communication

29. Decision Making – Japan Too time-consuming ? In: Japanese Management, p. 161 Communication

30. Decision Making – Japan Pros: • elimination of dissension through participation of a large number of people • participation of employees even at lower levels • cumulated expertise • gradual improvement/correction • no individual responsibility -> daring and progressive decisions • gather opinions of other sections (no “nicht mein Bier”) • smooth/ more efficient implementation Communication

31. FORMAL INFORMAL “official side” “working side” organization charts cliques designated work units informal leaders job specifications channels of informal communication titles ranks lines of authority Two sides of an organization Formal and Informal Company Structure

32. Kacho • Informal leader • Head of department • position between management and workforce • mediator Formal and Informal Company Structure

33. Informal Structure in Japan Informal • leaders • groups • channels of communication supplement a steep hierarchy. Formal and Informal Company Structure

34. Organic versus Mechanistic View Organic: The organization as a living organism Constantly in progress Mechanistic: • The organization as a static scheme Strive for equilibrated states Informal and Formal Company Structure

35. Management • management in Japan has to coordinate, integrate and motivate • in America management rather means supervising others Informal and Formal Company Structure

36. Hierarchy • Strict hierarchical order • Secured spheres of control Managers are other-oriented • In the West most managers are self-oriented Hierarchy

37. Power Power is based on a person‘s function • In Western organizations power is based on a person • Less competition in Japan than in Western cultures Hierarchy

38. Leadership • an effective leader in Japan is above all: - a catalyst - a coach - a source of inspiration for his team Hierarchy

39. JAPAN WEST generalists specialists promotionby seniority promotionby performance conflict is solved privately conflict is solved in public people-oriented task-oriented long-term planning short-term planning informal communication formal communication decision by consensus decision by majority interdependency interdependency is viewed sceptically Management and working styles 1 Summary

40. JAPAN WEST reciprocal commitment between managers and workers less bonds open-plan offices working space is structured according to individual needs formalized and ritualized interactions informal interactions more common intuitive, nonverbal communication is important analytical, logical argumentation style face-to-face communication more important written communication more important Management and working styles 2 Summary

42. Total Quality Control • Method developed in the USA • Quality assurance at every stage of production In Japan: Quality Circles Target Cost Organization and Planning

43. Quality Circles „Quality Circles are small groups of people who do similar or related work who meet regularly to identify, analyse,and solve product-quality and production problems and to improve general operations.“ (Robert E. Cole, Director of the Center for Japanese Studies at the University of Michigan, S. 238) Organization and Planning

44. Quality Circles • Core element of the Japanese application of Total Quality Control • Small groups of employees: 10-12 members to facilitate communication • Continously improving process = Kaizen KAI = Change and ZEN = to the best Organization and Planning

45. Benefits of Quality Circles • Improved communication • Greater job satisfaction • Improved morale • Improved quality • Cost savings Organization and Planning

46. Japan Costs estimated by „cost engineers“ What are customers willing to pay? Germany Costs estimated by accountants Design first, then calculate the costs Target Cost Organization and Planning