Differences between management styles in the US and Japan

Japanese and American Managers

The difference between management styles in the U.S. And Japan

Managerial Style and Productivity

The Hive Mindset

East Meets West

Breaking into a Closed Society

Index

The difference between management styles in the U.S. And Japan

Managerial styles reflect the culture in which they developed. It is not surprising that the work experiences and values of American and Japanese managers differ in a number of aspects. This has become an important issue as the multinational company becomes more common. The global community has made it necessary to understand culturally relevant constructs in managerial style. This research will compare and contrast American managers and Japanese managers. This research will demonstrate that knowledge of these cultural differences is important to the productivity of firms that operate both multinationally and that participate in the global economy.

Managerial Style and Productivity

Understanding cultural differences in managerial styles can have a positive impact on firm performance. A direct link exists between managerial personality and company performance metrics (Westerman & Simmons, 2007). Conscientiousness, agreeability, and extraversion are linked to successful business performance (Westerman & Simmons, 2007). In a recent study that examined U.S.-based Japanese manufacturing firms, it was found that the degree of employee openness to different cultural norms correlated with positive performance in the company. Companies where employees were open to different cultural norms experienced greater ability to adapt to changing conditions within the business environment (Westerman & Simmons, 2007).

Differences exist in multinational firms regarding the decision to hire expatriates or indigenous managers in foreign satellite affiliates. The Japanese tend to make use of expatriates for top management positions (Belderbos & Heijltjes, 2005). This reflects the Japanese concept of lifetime employment practices and an emphasis on control through socialization that permeates Japanese human resources practices (Belderbos & Heijltjes, 2005).

Japanese managerial systems highlight loyalty among top managers. This system has advantages and disadvantages. One of the key advantages is that Japanese managers become indoctrinated into Japanese managerial concepts such as total quality control systems and Just-in-Time manufacturing processes. They carry these procedures with them as they take control of a company branch in a foreign country. The Japanese firm does not have to teach someone who is not familiar with these concepts how to operate in an environment that is foreign to them. However, is also has drawbacks, such as the "bamboo ceiling" for host country managers (Belderbos & Heijltjes, 2005). Japanese firms will often fail to allow non-Japanese managers the same opportunities for advancement as Japanese managers (Belderbos & Heijltjes, 2005).

The Hive Mindset

Japanese manufacturers often build relationships that affect purchasing and distribution decisions more than financial decisions (Belderbos & Heijltjes, 2005). The Japanese tend to form loyal business groups and will not make purchases outside of the group, regardless of the financial risks involved. These business groups are a part of Japanese business culture that differs from American business practices, where financial concerns often override the social aspects of business transactions.

One of the key differences in managerial concepts within Japanese society stems from the idea of business ownership within Japanese society. Business ownership is the right of the individual and the foundation of American society. The American business is the embodiment of the American dream. Businesses are private property. The only sense of communal property derives from public entities that are controlled by a board of directors. However, this is still a small group of individuals, compared to the Japanese ideal of business ownership.

Japanese businesses are more like national treasures. They are subject to much tighter government control than American businesses. The Japanese society is a stakeholder and has a risk involved in their success or failure. The Japanese manager is viewed less as an entrepreneur and more as the caretaker of a national landmark. There is more social pressure on the Japanese manager than on the American manager to make their company a success. For the Japanese manager, success for their business means success for Japan (Hitoshi, 2006). The Japanese manager has their reputation on the line and stands to endure public shame if their business fails. The American manager only needs to live up to their own standards, or perhaps those of their investors.

East Meets West

The selection of top managers in Japan follows the dynastic tradition. As the older manager prepares for retirement, the selection and training of his progeny begins. It is not uncommon for the selection of heir to be one of his sons or close relatives who shows promise. Until recently, the idea of hiring an American to take over the reins of a Japanese company would have been considered blasphemous. However, times are changing, and as east continues to meet west, some Japanese companies are beginning to find themselves under American management.

Politeness is an important part of Japanese business culture. Even when the news is bad, the Japanese have a gentle and polite way of expressing themselves (White, 2005). When Japanese management takes over and American company, or when the tables are turned, it can be quite an adjustment for all members of the company. They must learn to adjust to a new corporate culture and learn a new way of communicating within the corporation.

This was the way things were when Howard Stringer took over the executive desk of Sony, a traditionally Japanese national brand. The change came on the tails of Sony's first missed profits and diving share prices (White, 2005). The company decided to make a bold move and to adopt an American management style (White, 2005).

Stringer's appointment came as a shock too many, as Ken Kutargari, was slated to be the automatic heir to the position of Nobuyuki Idei (White, 2005). When Stringer took over, all board members, except for one lost their positions. One of the reasons cited for these changes is that Kutagari was still considered an angry young man, and it was feared that Stringer would not have the support that he needed to make the necessary changes. This represented a complete change of management and a complete change of managerial ideals. Stringer needed to eliminate resistance to his ideals, which meant breaking the traditional Japanese style of change management.

The Sony case highlights the differences between Japanese and American managerial styles. Sony was always considered a Japanese national brand, making their estimated earnings targets without fail. The fall of Sony to competitors was a shock the Japanese concept of national superiority in the field of electronics. The company was accused of losing is 'engineering roots' and producing inferior quality products (White, 2005). It was accused of being to American, meaning that jobs were not based on loyalty and that the company lacked the job security to which Japanese employees were accustomed (White, 2005).

Japanese companies are not considered to be as flexible and able to move with the market as American companies. They often have a slow reporting cycle and fragmented operations (White, 2005). They were more like five or six separate businesses, with managers of each division operating as if they were independent of one another (White, 2005). This difference in managerial styles was different from the American corporation where middle managers have less control over operations. The must report more often to a central authority figure who has greater control over their activities.

The Sony case illustrates the influence of American managerial styles on Japanese companies. However, American companies have something to learn from Japanese managerial styles as well. Among the top issues in the agenda for American companies are work ethics, social identity, dispute resolution techniques, and international market segmentation (Adbelmasand, 2004).

American businesses have been plagued by stories of scandal and unethical practices that caught public attention. The decentralized structure used by Japanese businesses curbs unethical behavior, as it is more difficult to hide using this type of business structure (Adbelmasand, 2004). Americans are quick to invoke the legal system when a dispute arises, but Japanese businesses tend to work thing out among themselves, without the use of messy and expensive legal proceedings. The decentralize approach is more appropriate for the company that wishes to operate in various international market segments, allowing the manager to adapt to local conditions (Adbelmasand, 2004). American managers could learn from these techniques to resolve many of the issues facing American businesses today.

Breaking into a Closed Society

The Japanese are inherently proud of their culture and heritage. The society is opposed to anything that is not Japanese. This cultural attitude can make it difficult for a foreigner to establish a successful business in Japan. When it comes to a choice between a cheaper, foreign alternative, as opposed to a traditional Japanese business, the Japanese will invariably choose the higher priced Japanese alternative. The Japanese believe that it is a source of pride to support their own (Watanabe, 2004). From a competitive standpoint, the foreign competitor will always be at a disadvantage on Japanese soil.

The owner of one Chinese massage parlor summarized what it took to become a success in Japan as the need to work hard, like Japanese (Watanabe, 2004). One has to speak Japanese, like a native Japanese speaker, but not shop like Japanese (Watanabe, 2004). To be talented and gifted means nothing to the Japanese, adopting a Japanese way of doing business is the only way to become a success in Japan (Watanabe, 2004). Regardless of the global standards and practices, the foreigner must comply with every centimeter of Japanese requirements, even if this means operating less efficiently (Watanabe, 2004).

The foreigner who wishes to succeed in Japan with their business must be willing to give up their own culture and adopt one that is Japanese (Watanabe, 2004). They must learn to support the local economy and purchase from local Japanese businesses. This may go against their traditional business sense that entails searching for less risky, or lower priced goods and services. However, if the business does not support the local economy, they will be ignored by local Japanese customers as well. This concept does not exist in the competition-driven American model of doing business.

Conclusion

As one can see, there are many differences between Japanese and American management styles. The Japanese model means attention to loyalty and reputation. The American business model is less concerned with dogma and tradition, trading it instead for efficiency and productivity. The Japanese value hard work, whereas the American management model is more concerned with getting the job done. Americans are considered to be stereotypically less polite and more ruthless than their Japanese counterparts. Even when the news is bad, the Japanese have a gentle and polite way of expressing their news. These cultural differences often cause a clash when these two cultures must come together in an atmosphere of mutual understanding.

Americans prefer a centralized style of management, whereas the Japanese model favors decentralized managerial styles. The American business is used to fewer governmental restrictions than those operating in Japan, but they also operate in a riskier marketplace. American businesses are more independent than Japanese businesses, which can make them more ruthless and willing to take chances. These, of course, are generalizations, and there are businesses that do not fit this model. However, these ideas reflect trends that summarize the cultural clash between Japanese and American managerial styles.