Business Management Articles / Asian
and Business Management
MANAGEMENT: JAPANESE STYLE
by Rene T. Domingo (email comments to firstname.lastname@example.org)
Japanese management took a hundred years to
develop. I don't think I can adequately discuss
this subject matter in 40 minutes. But I will
try my best. Of course, you have heard of
the book "In Search of Excellence."
After reading the book, I had mixed feelings.
The first feeling is admiration because it
describes very well the best-managed companies
in America. The other feeling is pity--pity
for the authors because they had to search
for excellence in America. Had they written
that book in Japan, they would not have to
search anymore because most companies there
are, in my opinion, excellent. They would
have tumbled and tripped upon them in any
direction they fall. As you are well aware
of, any Japanese company that we hear about
is most probably quite successful and a world
leader--Sony, Toyota, Hitachi, etc. In fact
many things we have or use are made by the
Japanese - the watches we wear, the cars we
drive, the TV we watch. So why are we interested
in Japanese management? This seems to be the
common theme, the common denominator among
the Japanese companies. As you may have read,
Japanese-managed companies in America tend
to be more successful than American companies
managed by Americans. Good examples are the
transplants, the car manufacturers in America
managed by the Japanese. The Americans themselves
admit this fact. They can operate well without
unions. The Americans are quite surprised
how the Japanese can manage Americans without
unions and come out with quality cars. I tend
to disagree that it is the Japanese which
is the common success factor. I would rather
think that it is the Japanese style of management.
When you say it is the Japanese, then there
is nothing to talk about. We cannot imitate
the Japanese, because we will never be Japanese.
So let us talk about management. Unfortunately,
in spite of the many articles and books on
Japanese management, it is still very little
understood. People are curious about this
because it seems to be the secret of the Japanese.
You already know about the traits of the Japanese--they
are hardworking, they are loyal, they love
their employees, they have teamwork, they
tend to decide by groups. With my forty minutes,
I have decided instead to share with you some
of my personal experiences and observations
on Japanese management when I was in Japan
for four years, studying in a Japanese university
and working in a Japanese company. I thought
that the best place to study their secret
is their home base. Of course, I experienced
a lot of culture shock. Some people do not
like to experience culture shock but I do,
because I believe that the stronger the shock,
the more learning takes place. Here are some
of those enlightening shocks.
The Japanese are hardworking. But it does
not mean that if you work hard, you would
be as successful as the Japanese. In fact,
many people who work hard still fail. What
does it mean to be hardworking in the Japanese
context? Let me give you one personal experience.
When I was training with a subsidiary of Toyota
in Japan, I joined a group of manufacturing
managers who were trying to conduct a study
of the production line. Late in the afternoon,
about four o'clock, they told me, "Ah,
Rene, we are going to study the third shift.
We will observe the third shift and find out
its problems in quality, efficiency and compare
it with the second shift." Of course
you know that the third shift is during the
wee hours in the morning. But I decided to
take the challenge and join the group. At
5:00 p.m., I asked the team leader if I can
go home and rest first. But the team leader
said, "No, no, we will not go home. We
will proceed right away to observe the second
and third shift, and check the changeover.
That was my first shock. So we went on to
study the third shift, the transition from
the second to the third, eating just a few
pieces of biscuit to last us until the morning.
Finally, we finished our observation. By the
way, when I say "observation" I
do not mean sitting down on a chair or staying
in the office. I mean standing up for eight
hours watching the third shift, taking notes.
And this was done by all of us, the members
and the leader of the team, without exception.
If they were not that excited, I would have
fallen asleep. But I seemed to get the energy
from them. At 7:00 a.m. we finished the observation.
So I told my Boss, "You see Sir, we have
been working 24 hours, can I go home and take
a rest?" He said, "No, no, I ordered
breakfast. We will prepare the report now."
So we had breakfast which sort of woke me
up a little. We prepared the report in one
hour. Then I told my leader, "Ah, sir,
we ate breakfast and finished the report,
can I go home now?" I already felt very
weak. But he was still excited, as if nothing
has happened, "No, you cannot go home
because we will present this report at 9:00
a.m. to the Directors." We had to give
the impression that we were not sleepy, that
we were excited about it! After the successful
presentation at 10:00 a.m., I asked the leader,
"Can I go home now?" And he said.
"Okay, you can go home now. You can sleep,
take your lunch, but please come back at 1:00
p.m. When I came back that afternoon I asked
the secretary, "Hey, where are my team
mates?" She answered, "Oh they are
working." I again asked, "What time
did they come back?" She said, "What
do you mean come back? They did not go home.
They are still working." Now, that gives
you a real perspective of what is 'hardworking'
to the Japanese. Do you think many Filipinos,
even a highly-paid executive would do that?
And these Japanese are ordinary managers in
an ordinary company. This is what we call
productivity SWAT team. And this happens every
day, every week in any Japanese company. No
complaints, no "buts". Pure work!
So you want to be as hardworking as the Japanese?
Think first of what it takes to be hardworking
in their sense of the word.
Let me share with you another story about
the Japanese working norm. This one is about
Japanese salaryman or white-collar employee.
In Japan, the salaryman do not go home early.
They usually work overtime. That is why they
have these bars where they can drink and unwind
after working very late. This means they do
not go home early enough to have meals with
their wives most of the time. One day this
salaryman decided to surprise his wife by
coming home early. He decided to work harder
in the morning and afternoon so he can finish
his work, leave office at 5:00, have dinner
with his family. When he reached his home
at 5:30 p.m., his wife was shocked. She said,
"I am so surprised that you came home
early. You have to come inside because our
neighbors might see you. They might think
that the company does not need you anymore
and so it sent you home early." You see,
in Japan, if you are inefficient, you are
not given work. You do not have overtime.
The husband said, "What do you want me
to do--go back to the office? I have no more
work to do there." And the wife said,
"You cannot stay here. Just go away,
see a movie or play pachinko (pinball). I
don't care what you do. Just come back later,
at 9:00 p.m." Do you think our wives
would treat their husbands that way? In Japan,
there is a strong social pressure for the
Japanese to work hard and for his family to
make him work hard.
Another trait of the Japanese is loyalty.
Many of us may profess loyalty to our companies,
but that does not mean we understand the meaning
of the Japanese type of loyalty. Let me illustrate
you a few cases. Mitsui and Mitsubishi are
archrivals in Japan, just as Toyota and Nissan
or Sony and Matsushita are. So if two brothers
are working for different companies--say one
is a manager of Mitsui, one a manager of Mitsubishi--and
they are staying in the same house, they will
eat together, they will play together, they
will talk about many things, but they will
never talk about their work or about company
matters. They will never exchange notes about
their respective companies. Of course, there
is no pressure from the company for one not
to talk to one's brother about his work. How
should the company know? But Japanese loyalty
to their company is so strong it transcends
Here is another case. I was then training
in Toyota. At the end of the day, there was
nobody to take me home so I requested the
guard to call a taxi to take me to my dormitory,
which is about five kilometers away. I overheard
the guard talking to the taxi company over
the phone, "This is Toyota Corporation.
We have a passenger here who wants to go to
the city. Could you please send over one Toyota
taxi?" You may laugh but that was what
really happened. If a Nissan car was sent,
it would never be allowed to enter the premises
of Toyota Corporation.
Do you know that when suppliers deliver their
goods to Toyota they have to use Toyota trucks?
They cannot deliver using any other truck
or they would not be allowed to unload or
even get paid. You would imagine the expense
of the supplier which must have three or four
sets of trucks to transport their supplies
to different companies. Of course it is usual,
when you enter the house of a Sony manager,
to see everything there made by Sony--radio,
television, video player, etc. Having a Matsushita
radio is almost a crime for which he could
Now, let us talk about a very important thing--responsibility.
We say the Japanese take their responsibility
very seriously. You see people committing
suicide, resigning after assuming responsibility
for certain deeds or disasters. Japanese Prime
Ministers resign over simple loss of confidence.
Now let us look at this phenomenon of responsibility
at the corporate level. Do you still remember
the Japanese Air Lines 747 crash in 1985 where
more than 500 Japanese died? It is the worst
single-plane disaster in the world. The Japanese
are very safety-conscious and very nationalistic.
They would never ride any plane except JAL.
The only time they will ride any other airline
is when JAL is fully booked. So, when their
favorite plane crashed what is to be done?
Management had to think fast. The first thing
they did was resign--the entire management
from the Chairman--before the results of the
investigation were completed, or even before
an investigation was called. They said, "We
are accepting responsibility regardless of
the investigation results." And I think
it changed management three times because
of that incident, but still the Japanese passengers
would not want to take JAL. They still did
not trust the airline. Finally, the investigation
results came and it turned out that it was
the fault of Boeing, the maker of 747. It
was the fault of the Boeing's technicians
who repaired the JAL plane. Actually, the
cause of the JAL crash was a faulty repair
of the fuselage. Boeing admitted the responsibility
and was willing to pay damages. Then one day
the newspaper reported that the JAL employee
who certified the adequacy of the Boeing repair
committed suicide. Every time a Boeing repairman
comes, a JAL counterpart has to check his
work. Even though he did not actually repair
the plane, this JAL employee felt responsible
for the crash so he committed suicide. Of
course this was not a shock to the Japanese
society. But the suicide was not enough to
change the mind of the public. The management
finally came out with a drastic set of policies.
First, they decentralized maintenance. Previously,
maintenance was centralized--anybody there
in maintenance can repair any aircraft. So
management got rid of this system because
it cannot pinpoint responsibility. In other
words, there will be a dedicated maintenance
crew to look after each airline. If a plane
encounters trouble, then it is the responsibility
of that particular maintenance crew. The next
policy is that the name of this permanent
crew will be posted in the plane for the passengers
to see, right upon boarding so you know whom
to blame in case of trouble. The third policy
was the clincher. After every major repair
or overhaul of the aircraft by the maintenance
crews, the entire maintenance crew will board
the plane together with the passengers, regardless
of destination. That is the ultimate quality
assurance. With those changes, everybody regained
confidence in JAL. That is responsibility,
Japanese-style. In other countries, including
the Philippines, many planes have crashed,
yet nobody seemed to have resigned and the
pilots are still flying. You find the situation
You have heard of hands-on management. You
have heard of MBO or Management by Objective.
The Japanese counterpart is MBW--management-by-walking-around.
A synonym for that is hands-on management.
The Japanese are bottom-up managers: they
tend to be more in contact with front-line
operations as opposed to the Western type
managers who are hands-off managers, who just
sit in the office giving orders. You might
think that hands-on management for the Japanese
is simply visiting the factory and then going
back to their air-conditioned offices after
thirty minutes. Well, let me tell you what
hands-on management to the Japanese is like.
After graduation, my Japanese classmates and
I parted ways. They stayed in Japan and I
came back to Manila to work. After a year
I was invited to visit some factories in Japan.
I took the opportunity to visit my school,
classmates, and my professor. He arranged
for me a visit to the factory where some former
classmates are working--a big manufacturing
company that supplies parts to different car
manufacturers. When I saw my classmates I
was horribly shocked. You know what they were
doing? They were wiping the machines, getting
rid of the dirt, the oil, serving the workers,
supplying them with parts. I could not believe
my eyes. And to think these were the top students
in my batch! I asked my guide to explain this
scene. He said that in Japan, once you enter
a company, you have to really feel the situation
hands-on and should know the people in all
departments. They were management trainees
and were supposed to be exposed to problems
not only in finance and marketing but also
in production. That was why they had to know
the problems of the workers, the problems
of the machines. But my guide said not to
worry. After twenty years, they will become
directors and presidents. That eased my shock.
He did not say "they would be" but
"they will be" directors and presidents.
That was a guarantee. Then I jokingly told
him that if he promise to make me President,
I would also be willing to wipe all the machines.
Another important principle of Japanese management
that you read about is teamwork. We may define
teamwork as working hand-in-hand to attain
a common objective. But do we really know
what the Japanese mean by teamwork. When I
was in Japan, I worked in the office doing
paperwork. One day I heard my boss talking
to someone over the phone and he became very
excited. It turned out he was negotiating
with a manager of one factory who was borrowing
workers from his factory. In Japan, it is
a very fluid situation. There is no such thing
as loyalty to a factory. You are loyal to
the company. If one factory needs your workers,
then you lend them out. No questions asked.
There was this negotiation because demand
suddenly picked up or there was a high rate
of absenteeism. I thought the problem was
over when the phone rang again. Another factory
needed more people. But there were no more
people to send over from our factory. All
the extra workers were already lent out to
other factories. But we had to help this particular
factory. So my boss started calling up the
marketing department, the accounting department,
the personnel department borrowing people.
There was no resistance, no angry remarks
from the different departments. The Chief
Accountant said, "Okay, I'll lend you
five accountants to assemble cars, to run
your milling machines." The Marketing
Manager said, "I have five salesmen here
who are not busy. I'll send them over to you."
And for the sake of knowing what Japanese
teamwork really is, I also volunteered. Of
course I have no experience in running specialized
machine, but I was given training to be able
to do the job right away. I thought that was
real teamwork. Everybody was loyal to the
company. Not to their boss, not to their section.
Not to their function. Not to their expertise.
Now, can we do that here? It seems this type
of teamwork has not yet been done here. Here
we have too much politics, too much intrigues
to achieve anything of this sort.
Now let us focus on another Japanese trait--consensus.
This is group decision-making or being democratic
in decision-making, consulting everybody regarding
company decisions. Even though we say we are
a democratic people, our concept of consensus
does not compare with that of the Japanese.
Let me give you one incident showing Japanese
consensus. Maybe you can reflect on this.
One day, a certain bank overpaid a client.
The client was cashing $1,000 but the teller
paid him $10,000. When the client went out
of the bank, he realized that he had $9,000
more. What do you think would have happened
if that client just disappeared? But that
was Japan and he did not disappear. He went
back to the bank and tried to return the money.
But my point is not about the client. It is
about how the company dealt with this kind
of situation. So the client went back to the
bank and tried to return the money to the
teller. If that incident happened here the
teller would have accepted the money and thanked
the client--maybe give him a souvenir or a
letter of appreciation. But that was Japan,
so what happened? The teller did not accept
the money right away. He told the client,
"Could you please wait for a couple of
minutes while we discuss this matter? You
hold on to your money. I'll discuss this with
my boss." So right away in the backroom,
the staff, the supervisors, the branch manager,
computer operator, the signature verifier--everybody
involved in releasing the money assembled
and held a short meeting. In other words,
the management, the whole bank, not just the
teller, had to take action. That is why they
needed a consensus on what to do. It is not
as simple as returning the money to the bank.
It is more than that. Releasing the $10,000
was considered a group decision and the teller
just happened to be the last person to carry
out that decision. Finally the Branch Manager
accosted the client and told him the bank's
decision - they cannot accept the money that
he is returning and that it was his. Another
culture shock. The Branch Manager explained
that he is giving the money to the client
so that there will be a problem in the bank.
If the client returned the money and the bank
accepted it, then there will be no problem.
The books will balance, and the people will
forget this incident because there is no more
problem. There will be no pressure to investigate,
to reprimand, to analyze. But they precisely
want to investigate, they want to analyze
so they want to have a problem. The Branch
Manager further explained that $9,000 might
be big to the client but to the bank it was
small because the bank was a billion dollar
concern. "We consider it an investment
in experience, because if the bank does not
discover the cause of mistake, the next mistake
may be $1,000,000. We want to know whether
it was a computer error, an error in procedures,
or error in judgement. I would rather lose
$9,000 now than $1,000,000 later." The
client is convinced with the explanation and
takes home the money. Now who will shoulder
the $9,000 deficit in the bank? Here, it will
be the teller. In Japan it is not the teller
alone but everybody in the bank, in proportion
to each one's salary. The biggest amount would
be shouldered by the Branch Manager. That
is group decision for you. And that is how
the Japanese become very efficient. With that
kind of system, you can be sure that there
will be no more overpayment next time. Because
nobody wants to have his salary cut, everybody
will make sure it will not be repeated. Here,
we tend to cover-up problems so we are never
able to correct them. So they are repeated
over and over and in the long run, we lose
more. In Japan, you make a mistake only once
and after that, no more. Even if the discrepancy
is small, say the books do not balance by
$1 or one cent, the Japanese will spend $100
to find the cause. They invest now for the
future. This discipline is partly the reason
why the ten biggest banks in the world are
Let me wrap up by talking about what we can
do to improve the way we manage our companies.
As you can see, many of these Japanese practices
are not really culture bound. There are many
we can adapt or copy. This is what the Koreans
and the Taiwanese are doing. We do not have
to be Japanese to understand their objectives
and logic. It may seem harder to understand
and copy the Japanese than the Americans.
But understanding has nothing to do with being
pragmatic. Japan adapted European technology
when it was starting to industrialize. The
Japanese did not know how to speak French
or German and they hated and feared the Europeans.
But they went to Europe nevertheless and copied
all its technology. They went to America to
copy everything there. And they did not know
how to speak English either. History has shown
that there is no cultural or racial barrier
in the transfer of technology. This is all
in the mind. It can be done. Unfortunately,
nobody realizes the potential of learning
from Japan. All the technology is there and
it is only four hours away by plane. Sadly,
our interest in Japan is only a result of
the Americans' interest in Japan. Since the
Americans started suffering from Japanese
competition, they decided to study and learn
from the Japanese. And because we are too
colonial-minded, we followed suit, when in
fact we should have been interested in Japan
earlier because we are both Asians and Japan
is much closer to us. Look at the Koreans.
They do not follow the Europeans or Americans,
they just go to Japan and copy everything
there. If it does not work, fine. They just
retain and adopt whatever works.
Let us learn from the Japanese. All the NICs
(newly industrialized countries) are copying
from Japan--Korea, Singapore, Taiwan, even
Thailand. Thailand is fast becoming an NIC
partly because of the Japanese investments
there. We do not have to beat the Japanese
or copy them 100 percent if it is not practical
here. But the fact that we cannot copy them
100 percent does not mean forgetting them
altogether. It is not an all or nothing proposition.
We can learn many things from Japan. And I
guess one way to start is to focus our attention
on Japanese business. Let us visit Japan more
often, rather than Paris or New York. Let
us visit Tokyo and see what they are doing
there and learn a little Japanese. If we are
willing to become a more progressive country,
we have to invest in communication. That is
the only way. They will not learn English
for us. They are proud of their language.
Why should they learn English to teach us?
We should learn their language if we want
to learn from them. As I did in Japan, I learned
their language the hard way, adapted to their
society and to their culture. And they were
open to me, they taught me many secrets. I
found out that the Japanese are helpful, not
secretive. That they are secretive is nonsense,
a misconception. If you do your homework,
they will open up to you. They will share
what they know just as they shared with the
Koreans and the Taiwanese. The initiative
to learn from the Japanese should come from
us. The next move is ours.