How Far Can Business Methods Developed In One Country Be Applied In Another

How Far Can Business Methods Developed In One Country Be Applied In Another

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The question states the transferability of business methods from one country to another, via Japanese techniques. However, in order to answer, we must define the term culture, as the term culture encompasses business methods, i.e. in order to adopt foreign business methods we must adopt its culture. In Needle's (1994) definition of culture he states, "A particular interest in business is the extent to which we can learn from the business experiences of other cultures and transplant ideas d eveloped by businesses in one culture and use then in a totally different setting."

A major implication of the work of Hofstede (1980) and Trompenaars (1994) and other contributors to the knowledge about international culture and management is that "cultural interpretation and adaptation" are a necessary prerequisite to the comparative understanding of national and international management practice.

Hofstede suggests that while 'hard - nosed' (short termist, task/result orientated) American or Anglo-Saxon approachs to business management may work well in Chicago, they may be counterproductive in Japan.

More specifically, the procedure of international cultural adaptation may be applied to the three following areas: 1. Motivation theories, 2. Leadership concepts,
3. Management by Objectives (MBO)

The three areas are described by Hofstede as symptomatic of the issue at hand. Hofstede states that "not only organisations are culture bound; theories about organisations are equally culture bound." Morden (1993) comments "There is no guarantee, therefore, that theories and concepts developed within the cultural context of one country can with good effect be applied in another. This implies that it is not possible for such theories to be 'universally valid'."

In the UK, interest has been awakened by the considerable investment in the economy by major Japanese firms, who have entered certain key industries, such as motor manufacturing and electronics. Whilst taking advantage of investment incentives offered by the British Government, and the range of skills offered by British workers, these Japanese companies (e.g. Toyota, Honda, Panasonic, etc.) have also introduced several of their own personnel and production practices. These have been adapted to achieve the acceptance of the managers and workers concerned, especially in relation to production methods, quality control and management worker attitudes. A comparison between east and west industrial environments can simply illustrate culture differences., In particular, Britain versus Japan. Nevertheless, a number of Japanese management practices have been adopted very successfully in a British context (e.g. Nissan).



One of the important general difference between Japanese and British companies lies in the way they are funded.

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For example, in Japan, there is much reliance on shareholders for the funding of business. Instead the major banks play the greater role in providing funds. One result of this is that the Board of Directors is more powerful than the shareholders' meeting. The Board determines the long term strategy of the company, appointing an Executive Board made up of senior direcors, which concentrates on short-term, operational issues. Most Japanaes directors have line responsibilities, and this gives the Executive Board a strong production emphais.

A second difference is that the trade unions in Japan are company based rather than occupationally based, as in Britain. The company based approach to trade union organisation is a reflection of a unitary attitude towards employee relations. Thus, employees are only able to join their company union, whose primary aim will be to achieve lifetime job security for its members, and ensure, in collaboration with the management, the success and efficiency of the company, upon which everyone depends. This contrasts strongly with British trade unions, for example, where the emphasis is clearly on protecting and promoting the members interests, although naturally this in practice implies support for the employment opportunities offered by the business concerned.

A third difference is that personnel policies in Japanese firms are based on a number of specific assumptions, which have to be seen against a background of loyalty to the company, and identification with its products and ultimate success. Cole (1996) describes it as, "a strong adherence to company culture." He exerts the key assumptions that lie at the root of Japanese employee relations are as follows:

- the workforce will be composed of a core labour force supported by casual or part-time employees.
- lifetime employment will be offered to core workers only
- retirement of core workers at age 55 is insisted on
- career paths for core workers are non-specialised, and job flexibility is a key feature of all work
- pay is based on seniority
- considerable attention is paid to employee selection and training
- collaboration and team-working are seen as essential
- the culture is egalitarian in which single status predominates
- promotion is invariable from within the workforce.

Fourthly, the organisation structure of Japanese companies, whilst still hiercachiacal, is much less dependant on formal, burecractic authority than on group consensus and individual expertise. Decision making processes in Japanese firms are focused on defining questions rather than on finding solutions. Thus, as all levels of the organisation are involved in this process, so an overall consensus on problems and priorties emerges. This consensus approach tends to reinforce feelings of loyalty and commitment from all concerned.



Finally, particular attention is paid to production planning and quality issues. Points of interest here include:quality control is seen as the responsibility of every employee not just supervisors and an overall sense of teamwork and commitment to company business goals is encouraged.

To see Japanese management practices have been adapted in the context of employee relations in the UK, Cole states the typical features of employment conditions in Japanese owned companies in Britain as:
- Terms and conditions of collective agreements are held to be binding on both sides
- There is a 'no strike' clause in procedure agreements
- Single status applies, i.e. all employees are staff, receive annual salaries and the share the same facilities.
- Selection if rigorous and training is thorough.
- Great attention is paid to the quality of work and the efficiency of systems.

Japanese firms investing in Britain have undoubtedly been able to take advantage of a situation which was favourable to them, i.e. unemployment in the areas selected for investment has been high, enterprise zones have been made available from government and trade union power has been diminishing. However, it is clear that such firms have won the support of their workers, who have demonstrated their ability to collaborate positively with the Japanese styles of management to produce quality products. What is interesting to note is that many of the practices mentioned are by no means new to British management. The pay off for the Japanese companies who have invested in Britain is that they have been able to provide themselves with regional manufacturing bases from which to launch their products into Europe at a time when that continent is steadily becoming one vast market.

Now to consider an actual example of transferability. Harrision (1991) describes the UK industrial environment through British peoples attitude in the early 1980's. That is, that the main incentive is money, the enforcement of company rules is not strict and the improvement in working practices and productivity is purely managerial. Whilst Japanese attitudes towards work vary significantly. He states "the majority of Japanese workers committed themselves to a full days work, adhered strictly to company rules and procedures and strived to improve". Harrison obtained his comparative view after the decision to establish a Japanese company in the UK.

Harrison set out to create an ideal management approach which would be strong enough to compete with Japanese companies in Japan. It comprised ways of life, the nature of people and customs for conducting business. In the different Western environment, he could not introduce the Japanese way directly. The route that he chose was to set out to transform the essence of the successful Japanese way into a new way which would be successful in the Western environment.

Firstly, he listed the good aspects of the Japanese way. Then he developed the essential points of the Japanese way by discarding Japanese specialities such as tradition and habit. Finally, he added back Western specialities to the essential points to develop a 'successful Western way'.

For example: Japan has a long history of rice farming in small fields, where people who formed small communities could not survive unless as a team. Flexibility and small group activity was maintained because the need to start from scratch due to the second world war. Teamwork benefits the industrial envirobnment. However, he could not use the team spirrit tradition as in Japan, and instead replaced with with the western sport and games. His other aspects included, loyalty to work, and flexibility of work. Here the speciality is interest in challenge of hobbies. If companies can provide individual memebers with opportunities to develop their own interest, such people become flexible in work.

Dunning (1986) asked affiliates themselves what working practices did they think difficult to transfer from Japan. He states:

"There was a strong feeling among both Japaneses and UK managing directors and personnel managers that while most Japanaese style personnel practices could be satisfactorily introduced into the UK environment ('after all,' quipped one UK personnel director, 'they are common sense') there remained a fundamental difference between the attitudes to work by Japanese and UK workers."

How far will these differences in anglo-japanese culture and work ethic, which is believed as the most signigicant non-tranferable reasons for differences in the performance of the Japanese worforce, will last as they beome multinational, remains to be seen. Neither should it be assumed that one culture or ethic is preferable to the other.

Hence, it may well be that as Japanese particiapation grows in the UK industry, Japanese personnel polices will need to be more carefully and selectively approached to take account of the idiosynchrasiess of the individuial UK worker and the labour environment than has been necessary up to now.

Countries should recognise the strengths within individual cultures and use those strengths to make the essential points work for them in creating their own management style as clearly seen by Harrison and work effectively. The objective is to make each country and its people wealthy and prosperous. To achieve this, all people must strive to work creatively and with good application.








BIBLIOGRAPHY

1. How to make Japanese managament methods work in the west.
Kazuo Murata and Alan Harrison, Gower Publishing (1991)

2. Japanese Participation in British industry.
John H. Dunning, Routledge (1986)

3. Management theory and practice.
G A Cole, DP Publications (1979)

4. Riding the waves of culture.
Fons Trompenaars, The Economist Books (1993)

5. Business in Context.
David Needle, Chapman & Hall (1994)

6.Culture's consequences: International differences in work-related values
G Hofstede, Sage Publications (1980)

7. Business Strategy & Planning
Tony Morden, McGraw Hill (1993)
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