Video #7 - Is there a new corporate culture developing in Japan?

Monday, January 09, 2006

sources | lesson plan

BACKGROUND INFORMATION

A study funded by one of the world's biggest advertising agencies, Dentsu Institute for Human Resources, shows that Japan is struggling to cope with the flaws in its own system and the pressures of globalization. Further exacerbating the country’s economic crisis is its consumers' refusal to spend, no matter what inducements are offered by the government.

According to the survey, political, corporate and financial scandals are causing faith in basic Japanese institutions to plummet. Even the nation's famed salarymen (office workers)are starting to question the corporate culture that has been the mainstay of the country's postwar development era. Japanese people are expecting less from, and are less dependent on, companies.

Just look at the career path for Japanese college kids. This is how it used to work: a year before graduation, companies would come recruiting. They assigned you to a department. You had a job. Forty years later, you retired.

That's been the story of a "salaryman" like S.Suzuki, who has spent his entire adult life at his firm, working from 8 a.m. until 10 p.m. daily. He joined the company out of high school, in 1974. But Time Asia reports that due to financial concerns, Suzuki stopped going out after work with his colleagues a long time ago. He doesn''t buy a new suit until he wears a hole in an old one. He is worried that if the company decides to drop its twice-a-year bonuses, as other firms have, he won't be able to make his house payments.

By contrast, the new Japanese graduate is likely to float from job to job. That's led to the coining of a new word: "freeta," someone who dabbles in one dead-end, low-skill position after another.

Clearly, Japan is shifting from a centralized state to one that places more emphasis on individualism. A professor at Nazan University, Noda Nobuo, believes Japan has fallen into the classic trap of clinging to a system that worked well for one chapter in its history, but has outlived its usefulness. His assessment is that middle-aged Japan, burdened by recession fears, the constant threat of management restructuring and high housing and education costs, is showing "growing dissatisfaction with current lifestyles.". He adds that "people are departing from big spending and staying home to enjoy a fuller future."

Another piece of evidence indicating changes in Japanese corporate culture is a government blueprint for overhauling the nation's civil service (government workforce).

It calls for giving government employees the right to strike in return for removing their special job protection privileges. The plan seeks to do away with the current seniority-based pay scale, which many blame for the rigidity of the current civil service system, and replace it with a new system that rewards ability. On the controversial practice of "amakudari," literally, "descent from heaven" - the privileged hiring of retiring civil servants in the private sector and government-affiliated public corporations - the plan emphasizes the need to set up clear guidelines to avoid possible conflicts of interest.

Additionally, pension industry experts say that U.S.-style pension reforms giving Japanese unprecedented freedom to invest their life savings will eventually shake up labor mobility. Japan's current pension system has been stretched to breaking point by a rapidly aging society, cripplingly low interest rates and bureaucratic inefficiency.

Currently, Japanese corporate pensions are on the defined-benefit (DB) model, where funds are primarily invested in low-interest bonds. That is expected to change as the system shifts to defined-contribution (DC) plans, like the 401(k) retirement savings plans in the US, which ease the financial burden on companies and allow individuals to take on the responsibility of managing their own retirement investments.

Yasuyo Yamazaki, president of Goldman Sachs Investment Trust Management in Japan, likens the changes ahead to a transformation from a train-based society to one based on cars. Until now, Japanese pensions were similar to a society that was solely train-based; it brought everyone to the same destination at the same time, in the same way," he said. But like driving your own car, individual investors will soon be able to decide when, how and where to go, he added.

The way Japanese people gain employment, spend their careers, invest their money and plan for retirement is changing. The consensus of opinion among experts is that although change in the corporate culture of Japan will be slow, it is already taking place and it is necessary in light of the economic difficulties facing the government, companies and individuals alike.

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SOURCES:

Millett, Michael, “Future looks grim for pessimistic Japanese.” smh.com.au, March 24, 2001. www.smh.com.au/news/0103/24/world/world13.html

“The Graduate.” Time Asia, March 24, 2001 www.time.com/time/asia/biz/printout/0,9788,102996,00.html

“The Salaryman.” Time Asia, March 24, 2001 www.time.com/time/asia/biz/printout/0,9788,102995,00.html

Kadoya, Tamawa, “Wary Japanese brace for pension culture shock.” Reuters, March 29, 2001. http://news.excite.com/news/r/010329/23/financia-japan-pensions

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LESSON PLAN

GRADE LEVEL/SUBJECT: 10-12/Economics, International Relations, World History, International Bachelaurate Programs(IB), Current Events.

PURPOSE: To present activities to be used at a variety of classroom situations in order to enhance student understanding of the Japanese economy and its significance globally.

OBJECTIVES:

Students will be able to:

1. Describe the traditional corporate culture of Japan.
2. Describe pension plans for Japanese employees.
3. Compare and contrast past and present employment and pension practices by Japanese corporations.
4. Forecast the future of Japanese corporate culture.

MATERIALS:

1. Background information provided.
2. Resources on Japan available at your school’s Media Center and the Public Library System in your area.
3. Background information available through Internet “search engines”.

ACTIVITIES: May be assigned as group activities or as individual tasks. They may also be designed as preparation for related presentations either by individuals or groups.

1. Use charts and graphs to illustrate the traditional corporate culture of Japan.
2. Compare these figures to current statistics in Japanese employment practices.
3. Research and illustrate retirement practices and pension plans traditionally used by Japanese corporations.
4. Compare these figures to current statistics relating to pension plans in Japan.
5. Using the information provided in the previous research, make recommendations for a new corporate culture in Japan.
6. Read :

   “The Graduate.” Time Asia, March 24, 2001 www.time.com/time/asia/biz/printout/0,9788,102996,00.html

   "The Salaryman.” Time Asia, March 24, 2001 www.time.com/time/asia/biz/printout/0,9788,102995,00.html

   Write a “day in the life” essay for each of these men.

7. Read one of the following articles, write your reaction and share it with the class:

   Kobayashi, Yotaro, “Japanese Corporate Culture and Globalization.” Global Communications Platform, June, 2000 www.glocom.org/opinions/essays/200006_kobayashi_corp_cul/

   Kobayashi, Yotaro, “Japan’s Individualism in Globalization Trends.” Global Communications Platform, 12/18/2000 www.glocom.org/opinions/essays/200012_kobayashi_jp_individ/index.html

EVALUATION:

Individual assignments should be graded by the teacher using established criteria.

Group activities, presentations and projects may be evaluated by teachers and students using the following criteria and scale:

Content Creativity Clarity

1=Superior (A) 2=Excellent (B) 3=Good (C) 4=Fair (D) 5=Poor (F)

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