Comparison of Management practices (POSLC) of Japan and U.S.A.

An overview of Japanese Management:

Many experts on Japanese management have isolated distinctive practices such as the ringi
system of decision making, seniority promotions and seniority wage principle, life time
employment and long – range plans that account for the remarkable success of the Japanese
economy, however some Japanese managers are in favour of breaking away from these
management traditions and adopt more American techniques of management since they
consider that these Japanese practices will inhibit their companies’ ability to adapt to rapid
technological changes in today’s intense global rivalry.

Distinctive features of Japanese Management:

1. The ringi system of decision making : In this system the ideas and plans are discussed and
developed in the informal meeting among the employees. These informal meetings is a kind
of pre- meeting stage known as “Nemawashi”. (Sagi,S), (2015)

2. Seniority wage principle: It is a very general practice in the Japanese management system
to link the wages of an employee to the number of years he has worked.

An overview of the American style of management:

The American management is more individualistic in approach as managers are accountable

for the decisions made within their areas of responsibility. Important discussions might be
discussed in open forum somewhat similar to as in case of Japanese management (ringi
system) but the ultimate responsibility for the consequences of the decision lies on the boss.
The benefit of this accountability is The American dream that outstanding success will
inevitably bring outstanding rewards. Hence in the American style of management we
observe that managers are more likely to disregard the opinions of subordinates as compared
to managers in other more compromise-oriented culture.
Comparison of the key functions of management of Japan and U.S.A. :

1) Planning: Planning is the basic function of management which deals with chalking out
a future course of action and deciding in advance the most appropriate course of
actions to be followed for achievement of the goals.

Planning function in Japan:

The planning function in Japan are mostly long term oriented, involves collective
decision making as per the rengi system of decision making resulting in participation of
many people in the preparation and making of decisions. Unlike the American style of
planning, the decision making process is slow but results in its fast implementation. The
most important part of management is understanding and analysing the problem and
developing various alternative solutions, which under the Japanese style of management
allows to be discussed at various levels in the organisational hierarchy.A proposal is
confirmed through the ‘ringi’ process of decision making. The ‘Ringisho’ is a proposal
document prepared by a staff member. This paper is circulated among various managers
before it goes to top management for formal approval. The final authority for making
decision still remains at the top level management but if a proposal is not accepted at the
first instance then it is more likely to be returned to subordinates for further study, rather
than being rejected outright.

Planning function in the U.S.A. :

Primarily the plans are short term formed at the top level of management and are flown to
the lower levels. The decisions are generally taken on an individual basis by top tier
managers and hence provides for fast decision making but often leads to suboptimal
decisions. Since the decisions and plans are primarily made by a few people, it has to be
sold to other people with different values and different perception, hence the decision
making is fast but its implementation is very time consuming and requires compromises
with those managers with different viewpoints. Such implemented decision and plans
may be less ideal because of the compromising factor involved.

Organising function in Japan:

In the Japanese practice, the managers and employees are collectively responsible and
accountable for accomplishment of the set objectives. Collective responsibility leads to
the development of an informal organisation structure which sometimes creates ambiguity
of decision responsibility. However the same collective responsibility also helps in
developing a very competitive spirit against other enterprise that gives the organisation an
edge over its rival firms in the market.

2) Organising function in The U.S.A. :

In the American style of management, the managers are individually responsible and
accountable for their targets and objectives. This leads to formation of a very formal
bureaucratic organisational structure lacking common organisational culture. There is
complete clarity regarding the decision responsibility and authority at an individual level.
Organisations have been successful in using the formal bureaucratic organisation
structure for creating job clarity but their lacks a commonly shared organisational nature
because of the bureaucratic structure.

Staffing function in Japan ;

The staffing function in the Japanese management style is such that employees develop a
strong identification with the company unlike in The U.S.A. where employees are more
often identified with their profession rather with their company. The formal performance
appraisal is not very frequent but it is mostly evaluated in an informal basis. The
evaluation process stresses more on the long term success and decision making
capabilities of the employee reducing the effect of misfortune or luck influencing the
evaluation results.

Under the Japanese management practice, promotion to an employee is mostly decided

based on two parameters, namely seniority and merit, with educational qualifications also
being an important aspect.

The organisations invest heavily on employee training and development. The employees
are assigned various different jobs throughout their working life leading to a broader
career path getting exposure of various businesses.

An important aspect of the staffing function in Japan is lifetime employment in which the
companies makes every effort to provide stability in employment until the retirement age
of the employee which is generally 55 years. However these practices are being modified
due to heavy costs involved.
Staffing function in The U.S.A. :

Unlike Japan, in The U.S.A. employee performance appraisal is more frequent with the
existing employees being appraised at least once a year. The performance of the new
employees are appraised as soon as they are hired and if the performance does not
matches the expected standard, the employees may be even terminated. Differential pay
increases is also observed because increments are often performance based, which is
more common in the upper level of management. Promotions of employees is based on
individual performance. American management technique does not encourages huge
investment on training of employees which is generally the case in Japanese management
technique. Employees are trained in specialized functions that does not allows the
employees to have a broader career path.

Leading function in Japan:

In the Japanese managerial technique, the manager tries to create an environment of spirit
de corps. A confluence of organizational and personal life is maintained between the
managers and their subordinates by working together on common tasks and meeting and
associating outside the working environment.

Leading function in The U.S.A. :

In The U.S.A., leaders are considered as strong, directive and determined decision
makers. Within the organisation the communication pattern is from top to bottom with all
the decisions and directions being flown from the top level to the lower levels. Unlike in
Japan, the private life of the leaders is separate from their work life and more emphasis is
laid on the leaders direction to the group or business

Controlling function in Japan :

As per the Japanese management technique, controlling is more about group performance
and lays down less emphasis on individual performance. Managers are a part of work
group rather than only supervising the activities from the top. The people who have high
analytical skills can be very effective as the people of Japan have the ability to work even
in the rapidly changing environment. There are various programs like “zero defect” and
“Value Engineering” which helps them to focus on the TQM of their productivity.
The management usually performs on the objectives and also they measure their
performance which is present against standards. The objectives which are being settled up
needs to be verifiable then only the performance be measured. When this type is followed
then it will again make the functioning of the organization smooth as the manager can
easily measure the deviations which are coming through. But one thing that acts a barrier
to this thing is that when specific objectives are there then it will ignite a flame of
blaming others in the organization.