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PATERNALISM AND JAPANESE SOCIETY

Midterm paper on R. Dore ’s chart

 

 

Nowadays, reading a R. Dore’s book can be somewhat striking in the first place. In fact, R. Dore was one of the numerous authors who wrote about Japanese expansion and about the “Japanese threat” in the 80’s. A threat perceived as a reality for many of the occidental observers, until the beginning of the, still unresolved, Japanese economic crisis, which put Japan under the opposite spotlights (the study of Japan as a counter-model).

This is nevertheless not the subject of this paper, which is to discuss the author’s management theory. R. Dore upholds the idea of a kind of inevitable uniformization of management toward an “organization-oriented” system in which the power is more shared and the feeling of “community” more patent, the one that is precisely a fundamental root of the Japanese way of management. In order to make a narrative explanation of this chart, I will pick one specific path and link it with the Japanese case. Taking only one part of a chart contains drawbacks and is a risk to misunderstand his whole theory but I will try to take the most representative and emblematic paths in order to explain the way Japan accomplished its evolution in conformity with R. Dore’s model.

In the second part, I will discuss this theory considering the Japanese specific cultural and historical backgrounds contributing to create this particular type of management and moderating the formal theoretical explanations of R. Dore. 

Observing the chart, a path seems to fit really with the Japanese case in the road toward “power-sharing between employees and shareholders: the “technological development” leads to a “greater complexity of organization” and then to a “need for more in-house training”. This specific training is the cause of a “growth of organization-oriented labour-markets”, which leads to “company organization of trade unions”. From this results the fact that the management becomes based “on consent rather than coercion” and eventually to the power-sharing in the company.

Neverteless, this path is only a bare fact. How did it work concretely, and specifically how did it work in Japan? Let us now follow the same path but from the case of Japan.

The technological development is based on the second-industrial revolution with the development of, among others, electricity and coal-based production. This development first occurred in Europe and in the United States. During the Meiji revolution, the Japanese leaders decided to open their country, braking the ancient Tokugawa rule of isolationism, and to adapt the best elements of the West (not only technologically by the way).From this point (after 1868), Japan began its technological development, with the ultimate goal of not only catch up with, but overtake the Western countries. It is then interesting to consider that, beginning later, the pace of the Japanese development was much faster than those in the western countries.

This rapid pace of technological development rapidly led to the fact that the little shops or family companies were not adapted any more to fit with this process. In fact, big investments, and then big companies able to realize these investments were needed. The Japanese government (and it is typical of the Japanese development process) played an important role in building and bolstering merging and bigger companies.

The “Zaibatsu” system was the solution adapted in Japan. A Zaibatsu is a big company with a complex structure, comprised of many companies, the central one being a bank, which provides money to cope with needed financing.

Except this financial factor, a technological development needs more workforce (extracting coal, building a machine require many hands) and a more diversified one (manual workers, specialists, engineers, …). As a result, a more complex organization was required to manage this growing and diversified staff.

As the organization’s structure becomes more complex, there is a necessity of workers with specific skills. That is, if a company uses more advanced technologies, this company will need a new type of workers: the usual craftsmen of feudal system are not adapted any more, and employees able to use or repair or even produce the company’s machines become a basic need.

Japan coped with this evolution by creating “generalist” young workers able to fit in any company. The school system (as R. Cutts explains in “an empire of school”) in Japan was centered on this approach: the child will be submitted to harsh and general studies in which he will have to learn and memorize a lot of facts. After graduating from university, they will be able to adapt in every company, and the real specialization of the young people will occur only after entering the company. And even if every Japanese child didn’t go to university, the obligation of education, at least for a few years, has been implemented early. And there was a “national” agreement in this division of education: the need for specific skills being better known by companies, the companies, by in-house firm specific trainings, will take charge of it.

As a consequence, to employ a Japanese student was seen as something a long-term investment: if the company provides specific training to him, the goal for this company is to profit later of the newly developed skill and to keep the worker for some time. But reversely, the company had to offer something in exchange. From this point, the labour market became more “organization-oriented” as R. Dore says. In fact, the company developed institutionalized career structures to offer safety for the worker. In order to fit with this “long term relationship” policy, two systems in particular were implemented: the life-time employment system the seniority-wage system. To be employed in a Japanese company didn not mean only “employment” but an involvement for the whole life in the company which offered you in-house training. And the salary scale fitted with this principle in the way that the older you were, the better was your salary. Every body agreed because as you were employed for life, you just had to wait for your turn to get high salaries.

This structure was not neutral because it led to the creation of a true “community” feeling among the workers: the colleague was not only a colleague, he was almost a member of the same family. Indeed, the first principle who applies in this kind of organization is equality. As every body have to climb the hierarchical and salary ladder at the same pace, there is no use to adopt any competitive or agressive behavior against the other workers. And this sense of friendship and strong community-based feeling among the employees reflected in the union’s organization. As opposed to industry- or sector-based labour unions (as those developed generally in the western countries) the Japanese union were created and organized within the company, reinforcing this feeling of community.

And we have to note that the community feeling was not spread only among employees but in the whole company. The “we are all on the same boat” feeling was, and still is, very entrenched in the Japanese companies. And as a consequence of al this (in-house training, institutionalized career structures, company trade union, community feeling), there was an increasing possibility for the managers to manage in a more consensual way rather than by coercion. A good instance is the trade union’s behavior inside a company. Contrary to a western union, whose goal is to oppose management and claim mew rights for workers, in Japan the trade unions were very pacific and worked mostly hand-in-hand with the management. Moreover, union’s leaders being usually promoted in the management staff after a while, the relations were basically consensual.

The final stage is obvious: if the management is a consensual one and the company “family-like”, the way to power-sharing between employees and shareholder representative is already marked out. Even if this path remains for the inmost part rarely materialized hitherto, it is easily understandable that giving power to employees is the next step to adopt for a “family-like” company with strong ties between employees and management.

The R. Dore’s chart is now more explicit in the way we have explained how the different steps were linked together and led to a power-sharing between shareholders and employees. The point now is to know if this path is correct or at least if it is arguable or not.

It will be very presumptuous to give a judgement on R. Dore’s chart. Mostly because having chosen only one path of this chart inevitably limits its meaning and does not enable to make a overall judgment on it. But still, it is possible to discuss it considering other factors and facing it with the Japanese reality.

The first point I would like to discuss is that this chart, though very complete, remains a theory. In fact, differences between theory and reality are still huge in the way theories only represent the ideal way to follow to attend a definite goal. But in reality the link between paths is not so easy to achieve. As an example, we could say that this idealistic form of power-sharing between employees and share-holders is not a common practice, even in Japan, a country where so-called “paternalism” is spread inside companies. For such a change to occur, other factors(conservatism, management characters,…) have to be taken into considerations, and these “psychological” could never be formalized in any theories.

Furthermore, R. Dore is putting at the root of this way toward the “industrial democracy” the technological development. If the technological development played undoubtedly an important part in the evolution of the organizations and of the management, it was not the only factor. In fact, the cultural factor played a critical part also, probably even more important than the one played by technological development, and especially in Japan. The Japanese feudal system was based on the concept of paternalism (恩情主義) that of devotion and duty toward the parents(孝)and reciprocally that of respect and obligation toward the children(恩). These cultural backgrounds evolved as the time passed and the figures of respects varied from the Daimyo to the emperor. And after the beginning of the Japanese economic development, these cultural traditions have been reinterpreted inside the companies: the figure of the father was played by the chairman of the company whereas the children’s role was attributed to the employees. And this point is a key to understand the way the relations worked in a Japanese company: it is not only by a mechanical path of organizational complexity that the in-house training and then the institutional career structures took roots. There was a deep cultural tradition behind it and that kind of community relationship inside a group was much more than a consequence of technological development, it preceded it and accompanied it to forge the so-called “Japanese organization-oriented organizations”.

In addition, a third factor took an important part in the process leading to the Japanese style of management. I should call it the “contextual factor” or the historical one. In fact, even if the “会社人間culture” is a reality in Japan with a familial style of management, it was not a neutral principle. As A. Gordon explains, this Japanese “beautiful culture” have been contextually used by the managers of “Japan Inc.”. It means that they have exploited this trend to legitimize harsh conditions of work, increasing production and social peace. Concretely, this emphasizing of “familial values” was a way to avoid two different threats, or perceived threats, for Japanese companies’ heads. First, they wanted to avoid the western modernization and especially the modernization of management, in order to keep their positions and prevent from any movement or reform(this point is besides interesting because this conservatism could be, still now, entrenched and one of the cause of the Japan’s ongoing crisis). Secondly, they wanted to avoid the creation of labor unions in the companies(which explains the struggles occurring before the implementation of the labor law in, and out, the Diet). To idealize a family ideal in each company was a strong hint to kill in the egg every feeling of emancipation of the workers. And it worked well, for some time.

In conclusion, we can say that, even if the R. Dore chart is really interesting and highlights the non-arguable link that leads the technological development to a more shared power in a company, it remains a theory. Indeed, theories are useful to synthesize and clarify facts, but they remain of little sense and meaning until they are combined with cultural and social backgrounds. Yes, Japan followed this path, but it was not as fluid as a chart, it had to deal with a “paternalistic background” going back to feudal times, and with managers’ interests as well. It was a process going onwards and backwards to finally achieve along the years, to finally ends up in what is called “the Japanese way of management”, a system anyway more diverse than the expression gives to understand.

Pierre DANIEL

Waseda University - Mai 2003

   
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