This is the essence of what we identify as “white-collarization.”…. None of these options is without risks, but the ability to innovate and explore the uncharted is precisely what separates the leader from the industry follower.

Other Japanese companies count discretionary vacation days as absences. As with all expensive capital investments, choosing lifetime employees requires considerable management planning and screening. A third option is to set up global organizations that use local manufacturing and local marketing. The Japanese will have none of this. A company often informed a supplier several months in advance of its schedule of deliveries to a plant. Exhibit III Average monthly salary of high school graduates in Company C in 1981. One plant I visited, which produced electronic instruments in low volume, had a different approach. Because women are unlikely to receive the high salaries they would get if they stayed 30 years, they have less to lose by leaving.

for long-term survival. Since the Tokyo stock market crashed in the early 1990s, the conventional wisdom has been that the … The principal determinant of wages at Company A, as we have seen, is seniority.

The superior productivity of Japanese workers compared with their U.S. counterparts is commonly attributed to cultural reasons. Everybody feels very proud when you produce only perfect products.”. In this exhibit, points along the curves represent the average wage paid to each age group, male and female, in 1980. Yet it is not beyond our capabilities. If you are dependent on them, you soon regret it.”, But what about the slack times, when companies must carry underused manufacturing engineers and skilled machinists?

In Japanese companies “we” is everybody, and “them” are defects. Yanai believed helping the community was not just the company’s duty but necessary to its survival. And, finally, when something goes wrong, the system stops. They are heedless.

And disregard cost.”. Observed one manager, “The advantage of having highly skilled people (like manufacturing engineers) around is that they can always find something useful to do!”. Even though engineers, who are white-collar workers, are assigned the task of developing more efficient ways of carrying out production, the white-collarized blue-collar workers are also capable, indeed eager, to improve the handling of their jobs. If the current wage-tenure correlation is maintained, as Company C’s work force ages, its wage bill will rise sharply. “Not only does a company have to live in harmony with society, but to be accepted, it must contribute to society,” Yanai told Takeuchi. Although I could not obtain quantitative measures of the work pace at the Japanese companies, other evidence confirms my impressions. The yearlong campaign raised more than 14 billion yen, about 40 percent of the company’s net profits, and paid for several important initiatives to help rebuild local industries in the Tohoku region, including the establishment of a temporary fish market. If you have buffer inventories, these potential problems stay hidden and may never get corrected.”. A 50-year-old worker in the ninetieth percentile by pay would expect to earn twice as much as a 50-year-old worker with the same education and experience in the tenth percentile (see Exhibit VII). Inspired by his drivers shuttling goods to survivors on their own, Yamato mobilized 500 employees and 200 trucks on March 23 to voluntarily deliver relief supplies to evacuation centers in the Tohoku region. “He made the judgment call that the right thing to do was to look after the victims first and foremost, not the shareholders,” Takeuchi says. Instead, they work with suppliers to ascertain why problems arise and to help solve them. Yakult was certainly hurting—the company’s CFO noted that Yakult had lost 30 percent of the market and suggested reducing the salesforce. This complacent attitude toward the problem of production did not impair the competitiveness of U.S. manufacturers for a number of years—until, that is, they began to encounter companies (like those in Japan) that did compete on such mundane grounds as reliable, low-cost, defect-free products and dependable delivery. When an engineer suggested replacing the tongs with insulated gloves, productivity improved 500%. When I asked a production manager at Company E to compare the work pace at his plant with that in Western Electric, he agreed that the employees at Western Electric plants he had visited worked faster. These choices could be made by managers in the United States.

Another company with a very broad product line imposed a simple constraint on production schedulers to reduce the frequency of equipment changeovers: it allowed no more than eight product changes a day. Finally, I did not observe the use of uniform compensation systems. As expected, then, the quit rate for male Japanese workers is low and falls steeply with experience. The Japanese have achieved their current level of manufacturing excellence mostly by doing simple things but doing them very well and slowly improving them all the time.

You might claim that this obsession is costly, that it makes no economic sense. They work meticulously, knowing that any defects arising from their operation will be spotted and ultimately—and embarrassingly—tracked to them. Indeed, many customers searching for open stores were grateful to see the UNIQLO signs glowing among all the other darkened stores. Once production begins, managers concentrate on holding to these standards. In the plants I visited, everybody—from the most junior production worker to the plant manager—wore the same company uniform. Howard F. Van Zandt, “How to Negotiate in Japan,” HBR November–December 1970, p. 45. But the quality levels at these plants were just as high as at others where QCs were active. © 2020 Forbes Media LLC. Under these conditions, an experienced worker would be foolish to change jobs: he would lose the opportunity to make up for his low earnings as a new employee.

Exhibit VII Distribution of basic salary of male employees in Company A in 1981. Incidentally, the high investment in equipment contrasts sharply with low investment in plant. Because average earnings have been rising rapidly in Japan, those wage increases would be far greater than Exhibit III implies. Everybody works together to ascertain the causes of problems and to eliminate them.

If Japanese workers are not absent less than U.S. workers, do not have a significantly lower propensity to quit, and don’t work harder, why are they more productive? Americans are inveterate thinkers with a tradition of self-reliance that springs from frontier roots. I was then asked to tour their factory and make suggestions and recommendations to improve their product. Robert Cole, Japanese Blue Collar: The Changing Tradition (Berkeley, Calif.: University of California Press, 1971). Or perhaps they have a different notion of how important their suppliers are to the ultimate success of their businesses and therefore allocate time differently. This is why their example will be so hard for American companies—and American managers—to emulate. It is important to remember that a company’s commitment to its lifetime employees also leads to a reciprocal commitment from employees to the company.

In describing some of the ways in which this “hammering” has been done, I shall not discuss the effect of Japanese cultural or social norms on management behavior, the distinctive aspects of Japanese management systems, or the virtues of Japanese industrial policy.



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