Why Japan is Winning and “Western Management” isn’t.

No People: No "Management".

“Why was ‘Sunday Trading’ banned in England but never in Scotland?”

I remember being completely stumped when the head of the MBA/MSc Programme at Queen Margaret University, Richard Bent, asked our class this question. The history of religion in Scotland and England is a rather specialist topic, but it is fairly well known that the Scots have tended to take religion a lot more seriously than the English. England had long relegated religious life to the private sphere, not the public one. So, how could it be that England banned trade on a Sunday yet Scotland never did?

Well, it turns out that Scotland was so religious that no-one really thought to work on a Sunday, God’s Day. So there was no need to ban an activity that did not exist.

The tale may be apocryphal, but Richard makes an important point – lack of activity in the intellectual sphere (be it legislative, academic or otherwise) is often mistaken for lack activity in reality.

When we look at the huge amount of research time and discussion time that goes into “Management” in the English speaking world and compare it to Japan, we can be forgiven for thinking that Japan has really fallen behind the “Anglosphere” in terms of developing its management culture. This criticism can cause quite a reaction in Japan because it implies an uncharacteristic lack of genuine reflection and modification.

In reality, the huge amount of work going into the development of management concepts in “The West” (in the loosest sense of the term) is actually a sign of a culture that lacks real management – it is this lack of substance, this void that our concept of management is try to fill – trying and failing.

The Expansion and Devaluation of “Management”

“Management” started out as a system of control for businesses, especially manufacturers – a way of getting things done in an increasing complex and industrializing world. From these origins it has been subject to extreme levels of mission creep – now management has grown out of control. I don’t put much stock in arguing over definitions, but “management” as it currently stands would probably be best described as the creation, control and operation of any system/structure where individuals, organizations and information pool their capabilities and resources to try to create any outcome. Doesn’t exactly roll off the tongue.

We have a management research industry highly focused on “defining Management into existence” whilst being increasingly ignored by industry practitioners, a management consulting industry centred on efficiency improvement through the technological replacement of staff, the MBA school system which is attracting more and more candidates who have ability but no experience or organizational support (hence the increased focus on entrepreneurship and leadership), and an increasingly complex international financial and legal environment making genuine corporate decision-making ever more constrained by and at the mercy of “non-Management” professionals like lawyers and accountants.

Even the English-speaking world’s *go-to-guide* on “Management”, the Harvard Business Review, includes a section entitled “Managing Yourself” with no apparent sense of irony: “Management” seemingly no longer needs to include either organizations or complex activities.

“Management” as Societal Panacea

The 19th, 20th and 21st Centuries have seen numerous attempts to “improve” society through both political and military means. Western Business Management, as a system of command and control, has certainly learned a lot from military and political systems, gaining most notably the disciplines of “strategic planning” and “PR” amongst others. Simultaneously, however, values and goals from these other areas of societal life bled over into “Management”.

Suddenly, political and factional agendas started appearing in “Management”. “Human Resource Management” started to gain social missions, community goals and a diversity agenda. “Management” in its original sense was lost and had to be re-discovered in various forms as “Performance Management”, “Efficiency Management”, “Quality Management”, “Project Management”, etc. The growth of political and social missions in HRM started even to interfere with true HRM functions like staff-task matching, recruitment and career planning, so more recently one of the newest forms of so-called “Management” has started to rear its head: “Corporate Social Responsibility”.

Societal factions, having failed through military, political and legal means to enforce their ideals on the world have finally taken the control structures of employment and commerce and turned them to their task. “Management” if it is about any one thing at all is about getting things done in the real world. Social Mission HRM and CSR are not “Management” – they are the antithesis of the pragmatic – they are pure Utopianism.

“Management”: A Natural Attribute of Japanese Culture?

Where does “Management” actually take place? This may seem like a glib question, but most people seem to have forgotten the answer – “Management” takes place inside organizations. Most people, except the Japanese that is. Given the important implications good and bad management have for organizational performance, and the fact that organizations compete and cooperate in a market, it is quite natural for each organization to protect their command, control and implementational systems as trade secrets. These are fairly simple facts of organizational life, yet in “The West”, we often look at Japan with curiosity and wonder why MBA programmes are so unsuccessful as a route into senior management, why companies reward employees for loyalty and experience, why teamwork is prioritized over individual creativity and initiative.

Organisations are People

It took “Western Management” until the late 20th Century to develop a theory of organizations that described and explained these fairly obvious realities: the “Learning Organization”. The main thrust of this “ground breaking” concept is that people in organizations are not merely units of work, but are also units of organizational information – i.e. they are units of organizational culture. It can be hard for someone outside the management world to imagine how this can possibly be a “revelation”: that the functional knowledge in organizations exists in the people who work there and not in the company manuals in which they happen to be written down seems absurdly obvious. Only recently, however, has “Western HRM” been waking up to the fact that you can’t control the trade secrets and personal business relationships that people carry about as part of themselves, and that staff turnover does not simply mean a loss of talent, but also a loss of organizational identity, purpose and most importantly effectiveness. With this in mind, typically Japanese management concepts like “life time employment” start making an awful lot of sense; in fact it is hard to see how it could be otherwise.

Twin Forces of a Dysfunctional System

Due to this deep-seated, non-Japanese cultural misunderstanding of the value of individuals within the group, “Western so-called-Management” has developed a number of counter-productive anti-performance features. These are driven by two extremely powerful and opposing distorting forcing – standardization and role protectionism.

Largely due to poor individual loyalty to organizations, and poor organizational loyalty of organizations to workers (chicken and egg, this one), higher levels of staff turnover are a common feature outside of Japan. In order to protect organizations from this high turnover, supposedly competing companies band together to create pan-industry bodies which ensure that standardized certification and training is required for similar jobs in different companies – to ensure that the disloyal workers are entirely replaceable. This approach, of course, forgets that people are not in fact replaceable – they take their experience and relationships with them when they leave.

Organisations are trying to create an artificial abundance of talent and wasting valuable time and resources on the task instead of improving organizational performance.

The organizational drive towards standardization is a symptom of a lack of real management, and only reinforces the dysfunction between organizations and individuals. In Japan, much of managerial work is that of reinforcing loyalties and relationships in the organization in order to build stronger cultures, and so improved performance. Only in the last decade have Western theorists and practitioners started to cotton on to this: against “telecommuting”, praising “culture over strategy” and “treating staff like people”.

In opposition to this “Western” drive for replaceable workers is the force of role protectionism. Here we see employees thinking of themselves as, for example, “marketers” or “supply chain analysts” first and “members of the company” second. This gives rise to unionism, guilds, the development of separate business disciplines within organizations, etc. all the things that define non-Japanese working life. Employees are attempting to create an artificial scarcity of talent.

These twin forces are the root causes of the break up of most businesses into separate functional, non-interchangeable departments. Each department has to have its own associated body of academic theory and jargon whose job it is to justify both the standardization of hiring requirements between companies while simultaneously preventing coworkers in the same company from being able to take over their function – so much for working towards the shared goal of organizational performance!

Manage in the Wrong Place = Compete in the Wrong Place

When management is focused in the wrong places, competition exists where it should not. The company is the unit of competition, and yet the marketing department and the supply chain department vie for dominance internally, both generating masses of data for management consultants and researchers who compete with each other to justify whether marketing based strategies or supply chain capability strategies are best. Finance battles HR for control of staffing levels, IT contends with Sales, each department is pitted against the other.

The extent of jargon-isolated business functions inside organizations with non-internally-transferable employees is far less advanced in Japan, though it would be hard to argue it does not exist at all. But this relative lack of out-organization loyalty is caused by and maintained by management activity inside organizations. It also reinforces the alignment of organizational culture and strategy. Thus it can be seen that in a healthy, well-managed organization there are much fewer pressures that support industry standardization and role protectionism.

Just like the “Scottish Sunday Trading” anecdote, the Japanese don’t need an intellectual investigation of “Management” because they are actually busy doing “Management”.

Conclusion

Ultimately, the Western, factional organizational style cannot be fairly called “Management” – it generates a lot of jargon, a lot of conflict, a lot of work, a lot of heat, but not much in terms of real organizational results. On the other hand “Management” in Japan is about cutting down on needless internal conflict to maximize organizational performance – if this is not the heart of actual “Management”, what is?

In short – Drucker had it the wrong way round: in the West, “What gets managed, gets measured.

Author of this article

David Sharp

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