Japanese changing culture

Rough draft to question 3

Japan has come a long way since the horrible memory of defeat ‘World War II’. The post war struggle generation clung to their fifth century culture and ideas of rebuilding Japan. In less than sixty years Japan rose again to one of the world’s powerful nations largely from providing electrical/electronic products to most of the globes countries.
The type of culture that facilitated Japan to hold onto its people and acquired knowledge and become consistently stronger each year was that of Confucian beliefs. Confucian values are essentially derived from three ingredients which are high moral conduct and loyalty to others, reciprocal obligations to show appreciation of network involvement, and honesty in dealing with others. Confucians are not interested in the Supreme Being or after life like that of Hindu or Buddhism, Confucius’s are more concerned with what is happening now and how they interact with others in the course of their life. Loyalty to a superior in Confucian society was long considered a sacred duty, a lifelong obligation. This loyalty is not blind, like the subordinates loyalty to the superior similarly the superior is required to reciprocate the showing of loyalty to the subordinate in some way of relevance to the subordinate. If the superior fails to reciprocate the favors then the superior will most definitely suffer lost of moral standing in the community and networks which they might be involved with.
This ‘collective programming of the mind’ which distinguishes the Confucius’s from other cultures, has made Japan what it has become today. Japan is a successful country with many achievements, a proud country which can retain knowledge moving forward. Japan’s road to success experience some setbacks which required deep culture change to Confucian values. For if these changes were not made failure in the global arena was eminent.
The primary triggers of cultural changes in Japan during the 1990s were influenced by later generation born after 1964 which lacked commitment to traditional Japanese values and Japan’s economic slump of the 90s.
Younger generation changing values are arguably a result of being brought up in a wealthier environment to that of their parents. The obvious change to younger generations values were evidence of late marriage and less marriage between, 1975 – 1995 and young executives abandoning the ideology of life time employment with one company they did not want to be tied to the company as their parents were. The younger generations were more socially mobile, than that of their parents, meaning there was a greater extent to which individuals moved out of their strata into which they were born. The late marriage, decline in marriage and new found socially mobile younger generation contributed to the decline in population of Japan, although not declining at an alarming rate. A large number of elementary schools in rural and extremely isolated areas closed down, but those places were mainly elderly people because their children moved to the city. Also the rising cost of education contributed to some of the young people studying aboard a problem most highly developed nations experience.
Japan’s economic crisis prepared a new political crisis, bribery and corruption scandals, as a result some bureaucrats and one MP committed suicide. Japan’s crisis is more deep rooted than the policy mistakes of the government.
Japan’s economic crisis stemmed from the economy bursting in 1989 after which Japan had been a no-growth economy where real wages fell and overall employment declined. Needless to say in the 90s there was a fear of unemployment and with fewer people employed, lower bonuses, less overtime pay and historically low pay rises led to lower consumer spending. People felt the need to save and pay off debts rather than spend. As a result the Japanese economy slipped into a deflationary cycle. Other notable changes in the 90s were,
• Rising consumer price index.
• Falling prices, (capitalist economics debt deflation, debt holds back both consumer spending and investment).
• Government push to lower interest rates and stimulated borrowing.
• Falling domestic demand at an annual rate of 4%.
• Decline in industrial output.
• Decline in retail sales.
• Record unemployment level.
• Even though exports to US and Europe were steady, exports to Asia collapsed 51% during to the economic crisis.
Note: Even though Japan suffering social, government and economic crisis in the 90s, in 1998 the Country still accounted for only 13% of global GDP.
From a business perspective the stratification of a society is Significant, if it affects the operation of business organisations and changing values within society were affecting business. Japanese superiors were forced to combat declining business efficiency by changing generation old Confucius culture to provide social harmony and once again stimulate positive economic activity. These changes to traditional Confucius values would mean social mobility would become accepted, employees would not feel the pressure of having to stay with an employer for a life time. Employees would be given the choice of remuneration packages depending on what was important to them, i.e. life time employment or socially mobile. The changes to the culture would mean an acceptance of stronger emphasis on employee performance and necessary retrenchments or restructuring of employee responsibilities to maintain productivity.
However even with these fundamental changes to Confucius values the underlining Confucius culture didn’t change dramatically. It was still be important to work towards maintaining high moral conduct and loyalty to others, reciprocal obligations and practice honesty in dealing with others, although still expectable to behave contrary to these values if the action could be ethically justified in the relevant environment.
During the 1950s -1980s Matsushita was able to benefit from traditional Japanese culture because the business was able to hold onto personnel through period of extreme growth, hence retaining acquired knowledge, experience and skills. This meant that Matsushita never needed to relearn tasks only to improve on what they already knew. From the 50s through the 80s during periods of extreme growth Matsushita could rely on employees to encourage their sons and daughters to follow in their footsteps and join the company where required and behave in an acceptable manner to that of their parents.
The traditional culture which was of benefit to Matsushita during the 50s to 80s was a liability post the crash of 1989. During the periods of economic slowing in the 90s Matsushita was required to change the way they were doing business, learn new skills, and rationalize where necessary in some areas of business. Rationalizing process meant Matsushita was faced with harsh decisions to behave contrary to traditional Japanese culture in some situations. During this time Matsushita needed to entice young executives to join the firm where traditional methods to encourage new employees were failing. The remuneration packages which were once attractive to employees had become less attractive to young Japanese employees whose values had changed somewhat to their parents. Some of the older employees which had progressed with the company to positions of superiority and very favorable remuneration were required to change their way of looking at some business issues and rethink processes which were not performing or not successful. If the manager was unwilling to change to create the type of wealth required to sustain their remuneration, hard decisions were required contrary to traditional culture which might have meant changing roles, more retraining or even retrenchment.
With Matsushita human resource changes they were ultimately trying to bring back the competitive edge which was the reason for the growth in the 60s. As a result of adhering to traditional Japanese culture with little regard to the economics of business efficiency, Matsushita was faced with an aged work force, out dated values, and without a process to encourage new talented workers into the business. Impeding Matsushita implementation of human changes to improve the business poor performance was the strong fifth century Confucian culture. This was a serious obstruction to implement the changes because for the older half of the employees this meant changes to the very values which had built Japan and contributed to the success of Matsushita through the 60s – 80s. To the older employees these changes meant Matsushita would be in moral conflict with their obligation to reciprocate favor and therefore Matsushita honor could be in question amongst the business networks that Matsushita is involved with.
The moral question Matsushita was faced with was not one to be made in isolation; many Japanese businesses and government organization were faced with the same decision. For the success of Japan cultural changes were required. If these changes were to happen too quickly many Japanese could begin to question their beliefs which could create confusion and uncertainty having a compounding negative effect on the already suffering economy. The slower the change the more time the people have to settle and become familiar with the change, building confidence, stability and certainty amongst groups regarding the relevance and necessity of the change.

Japan suffered one of the worst economic hit in history when the economic bubble deflated steeply in the 1990s. Stock prices and real estate slumped enormously mostly due to domestic monetary policies. As a result, companies in Japan faced financial trouble which triggered the cultural change in Japan.
Before the Economic crisis, employee and the company have a particularly close relationship. The company is involved in the life of the employee. For example, a lot of companies require their employee’s manager to sign before they can rent an apartment. On the other hand employees are also very loyal and obliged to their company. With the company’s guaranteed lifetime employment policy, few employees will fancy changing jobs. Moreover they work hard in response to the generous benefit by the company.
However after the economic crisis, companies cannot afford to pay that many benefits to the employees so they finally had to lay them off, which they never did. This cultural change propagates to traditional value change eventually when employees see that loyalty does not guarantee anything. Since then, younger employees started to think more about individual as opposed to group.
Japan is moving towards more individualism than collectivism after the economic bubble. Nonetheless, this is a good opportunity for Japan to adapt to the globalization world and be more competitive. The cultural change will lead to greater mobility of employees, which means people will move around jobs more than before. As a consequence, company loses loyal employees but what they get by recruiting other people is the experiences. When people have mobility, they tend to gain experiences among a lot of companies and build social network among various groups of people. When this happens, new ideas emerge and startups will be built around the new ideas. Hence by moving towards individualism, Japan would create more new business than the past.
Matsushita, a giant Japanese electronics company, was founded in 1918. After the World War II, they mainly supply radios and other appliances to the Japanese. Between the 1950s and 1980s when Japanese culture was still in the traditional way following Confucian’s value, Matsushita has the advantage over other companies due to its high technology nature. Since their products are top of the line in terms of technological advancement, research is carried out and training has to be provided. Once they recruited a young employee, Matsushita trained them for specific jobs, and he will carry out the work for years to come. Loyalty and obligation here means better division of labor and lack of professionals’ lost.
After the 1990s, company’s performance was not as good as before. However they still did not abandon the traditional values immediately. I think this is not because of the liability about the traditional values they are bearing, but due to the fact that the employees are all trained professionals. If in any case, the company wants a turnaround, R&D is the most important assets of the company and at least half of the company’s employees are R&D related. Hence, it still kept it’s traditional practice until 1998, and did not have layoffs until 2001.
In the late 1990s and early 2000s, Matsushita made several human resources announcements. For example, changing management, bonuses scheme and most of all, options in signing contract. With these changes, Matsushita was trying to get the best of both worlds by offering traditional long term contracts and at the same time, provide options to younger employees for a more challenging career. The reason that Matsushita has to move slowly is because there are still a lot of experienced and elder worker in the company, so they had to take care of them. Also, Matsushita is known for its traditional values, so if they moved too quickly into the modern ways of managing, the value and image of the company will be lost.
I think that societal cultures can affect business in a very significant way. When societal culture changes, which are happening everywhere, company’s high management has to figure out ways to cope with the change and at the same time, maintaining gains to its core business, which is very challenging.