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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  • http://www.facebook.com/carl.macintyre Carl MacIntyre

    Complete and utter rubish. Clearly Mr. Sharp has become a Japan apologist with little to no understanding of how Western management practices are truely applied. More importantly, he shows no real understanding of Japanese management philosophies beyond the bankrupt concept of the uniqueness of Japanese culture. If, as Mr. Sharp posits, that the Japanese are winning, why then have they become essentially irrelevant in the world economy?

  • http://www.turning-japanese.info/ Eido INOUE

    The fact that you call the #3 (out of almost 200 countries in the world) economy “essentially irrelevant in the world economy” I think shows your bias and lack of perspective.

  • http://www.facebook.com/carl.macintyre Carl MacIntyre

    Clearly Japan’s influence has waned significantly from the 80’s to today and despite being the third largest economy (measured by GDP), it is no longer a driver of growth and innovation. Can you name any area where Japan is relevant on a global scale? BTW – anyone with an opinion is essentially biased.

  • http://www.turning-japanese.info/ Eido INOUE

    Cars. Duh.

    … as well as thousands of other things, too long to list here. But I’ll just leave it at that one blindly obvious answer that even a five year old could answer to show how silly your question is.

  • http://www.facebook.com/carl.macintyre Carl MacIntyre

    Really? Cars? Again, you’re living in the past where Japanese manufacturing expertise lead them to dominate that industry worldwide. Korea, China, Germany and other many other countries are making inroads and Japan’s leadership in automobile manufacturing is waning. Cars are, however, a perfect analogy of Japan’s issues, a reliance on hardware in what has become a software world. Sounds to me like you’re the one wearing the blinders..

  • http://www.turning-japanese.info/ Eido INOUE

    I couldn’t help but notice that when I answer a question, you change the subject (“become essentially irrelevant” becomes “influence has waned”; “name any area where Japan is relevant where Japan is relevant” becomes “leadership … is waning”)

    In other words, you make statements/questions about absolutes and when (easily) proven wrong, you shift to relatives.

    As for the “software world”? Software’s very important, but it’s not the “world.” In the U.S., the king of software in the world, software and IT services related to software made up just over 1.7% of the GDP in 2012. The U.S. automobile industry, by the way, is 3.6% of the GDP.

    Remind me again who’s wearing blinders?

  • http://www.facebook.com/carl.macintyre Carl MacIntyre

    Do you understand metaphors or literary devices such as hyperbole? I would guess not. Anyway, back to the article and my initial response; do you, or any rational person for that matter, really believe that the Japanese management systems or philosophies are somehow superior to “western” ones? I had thought that those sort of ludicrous arguments had died out after Japan had reached it’s economic apex in the 80’s and began it’s decline. BTW – it apparent that that decline is still ongoing, hence my comment about Japan being relatively irrelevant in today’s global economy. I remember when I lived in Japan in the 80’s, the world press was almost fixated on Japan and it’s economic dominance / influence around the globe. Now, it seems, the only articles on Japan have to do with occasional tracking of it’s revolving door of political leadership and it’s impotence.

  • http://twitter.com/chrstphrBEAR Christopher Bear

    sorry eido. carl wins this one

  • D C

    I can only agree with Mr. MacIntyre, who seems to have actually visited Japan. Japan has never valued teamwork, it just puts people into groups who follow the orders of the leader of the group because the consequences for failure are so severe in Japan – a country which has destroyed the labor laws and welfare system (not to mention health, education and farming). This has lead to a yes-man culture of drones who work 16 hours a day and dare not step out of line. In the good old days when the government focused everyone on ‘hard work’ in an economy that produced copycat goods quickly and efficiently, the economy rose. But that world has gone. Now, anyone can produce those same goods and is doing so, and Japan is caught in the trap of having an uncreative workforce with incredibly poor skills, producing goods which you can get from any number of countries, and which are commonly of higher quality and at a better price for the consumer. In a world where the United States is creating the world, Japan is just sitting back, playing the same old tune, and hoping the citizens don’t notice how poor their lives are, living in a country with an undeveloped society which can’t even produce enough food to feed itself. Still, at least the ‘new’ government is focusing on the things that really matter – ie. bolstering the military in a country where it’s forbidden by law to hold a military. Good luck for the future…

  • David

    I’m not even a businessperson and the tone in this article seems hopelessly biased. It’s as if the author has no idea about the working conditions Japanese people go through, or about how major Japanese companies that used to dominate are in a major lurch, which is apparent to anybody who pays attention to the news.

    A foreigner who started an English school here made how he treats his employees his number one priority, even above how he treats his customers. Surprise surprise, when you don’t treat your employees like trash, they build a good business for you. Happy employees = quality service. Granted, this is a narrow, service job example, but it makes a point.

    Frankly, most American businesses don’t get it, either. I think most managers are there simply because they want the better pay and like to tell people what to do.

  • alexkovac

    1. Mr. Sharp, this concept, “western management” what should it represent in your opinion? The “western management” you are describing here I recognize to be
    traditional Anglo-Saxon economic practice, sprinkled with some late 20th century US unbridled
    capitalism, flavor of management. (on your blog you are using a much more appropriate concept: Anglosphere) The “western management” in this piece hardly represents “western” historically or culturally. For example, I don’t think you would agree it represents Germanic, French
    or certainly not Italian cultural twists that influence managerial practice. By calling that “western” you are overstretching and
    oversimplifying the term and this oversimplification tainted your writing logic. You have taken a fuzzy, romantic mirage of “western management” and compared it to more or less well defined “Japanese management” concept. I do not know what conclusion should I get from such a comparison? On the other hand, comparing Scottish and Japanese management flavors, would be much more insightful! Moreover, comparing modern Scottish and Japanese bank management would be insightful and hilarious at the same time!

    2. There is no doubt that Japanese culture has an immense amount of things
    to teach any non-japanese, but it also has a lot to learn from abroad
    from any non-japanese. But, as you are probably more familiar with the modern history of economy in Japan than me, you are certainly aware that the modern management in Japan
    is a direct result of “imported” german economic practice during the Meiji era
    and the US management that was implemented after the Second world war.
    The cultural aspect is certainly strong and shapes this hybrid approach in many ways. With that in mind, it is rather silly (but not funny in any way) to perpetuate mythical tales of supremacy of any culture, as you are doing now with Japanese management as a facet of Japanese culture. It is a disservice to efforts of many, many people; both Japanese and otherwise who have put a lot of effort to open their cultures and share them.
    If you were writing your piece back in the era of British colonial
    expansion, which management approach would get your “supremacy” label? I bet you would be all for Britannia. :) Contexts shape cultures, and you have forgotten that in your piece. Anglo-Saxon management had its heyday, later on Japanese had its own, too. They
    had it because they were the best fits in the contexts of those days. Cultures diffuse and change and defeat efforts of being evaluated on simplistic ideas of measurements and subsequent computations.

    I like the cunning inversion in the end of your text, though.

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