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How does japan do it

Japan has performed a miracle. The country's economic performance following its crushing

defeat in World War II is nothing short of astounding. The economic expansion of Japan is

second to none. All of the elements are in place for Japan to continue increasing its share

of the world's wealth as America's gradually declines. The country is on track to becoming

the world's largest economy. How did Japan do it? There are many theories and studies

that have traced the Japanese miracle without success. The answer to the mystery can be

found by examining Japan's culture, education, and employment system. Japan's success is

not just a case of good technique and technology in business, but a real recognition and

development of the necessary human skills.

A better understanding of the Japanese society provides the framework to

understanding the workings of Japanese business (and possibly the Japanese mind.) The

ways of the Japanese provide a foundation for their economic adaptability in modern times.

Japan is a culture where human relations and preservation of harmony are the most

important elements in society. "It is their sense of identity and destiny which gives their

industrial machine its effectiveness."1 "Among the Japanese, there exists an instinctive

respect for institutions and government, for the rules of etiquette and service, for social

functions and their rituals of business. Japan is a traditionally crowded island, the people

are forced to share the limited space with each other and to live in harmony.. The Japanese

are very protective of their culture. They are very conservative to outside intrusion. Their

distinctive ways are a source of pride and national strength."2 Japan's striving for purity is

very different form a North American idea of open doors and diversity as strength. Japan is

relatively closed to immigration to outside countries. However, this feeling of superiority

does not stop them from being careful. "This is probably because the Japanese know their

economic house is on shaky ground, literally. Japan is eternally at nature's mercy,

vulnerable to the sea that surrounds it, to earthquakes of the soil beneath it and a real

shortage of raw materials, particularly food and fuel."3 A period of extended isolation

could be disastrous to the country. Japan's trade surplus is its only generator of wealth.

This is a fact of life that is preached through the media and taught constantly to Japanese

throughout their lives in school, from parents, and when they enter the working world. The

message is clear: Japan is always vulnerable, we must protect her. "Obsessed with national

character, the Japanese are proud and ambitious, constantly measuring themselves against

the world's best and biggest. Accordingly, one of the main sources of Japan's strength is its

people's willingness to sacrifice, to be regimented and homogenized, and to subordinate

personal desires to the harmony of the working group."4 The Japanese people have had to

become a group-oriented society. While in the western world, individuality and

independence are highly valued, Japanese society emphasizes group activity and

organization. The people accept that they will belong to one social group and work for one

company for life. The crowded island conditions have driven society to value conformity.

"The highest priority is placed on WA, or harmony."5 The Japanese have learned to share

their limited space and value the precious distance between themselves and others. The

culture that Japanese people are brought up in causes them to recognize that they have to

work together to succeed. Only harmony will provide improvement. This development of

the human nature and attitude relates directly to Japan's business practice and provides a

basis for good business relations.

Japan's education system has grabbed the world's attention as it is specifically

designed to teach the children skills and aptitudes to give them an edge in the business

world. "The educational system, based on the principle of full equality of educational

opportunity, is widely recognized as having greatly contributed to the prosperity of Japan

by providing a highly qualified work force supplemented by extensive intraining programs

by many of the major employers."6 "The primary and secondary educational system is

probably the most comprehensive and most disciplined in the world."7 Where North

American students attend school 175 days a year, Japanese students attend 240 days. .

Japanese students attend elementary and secondary school six days a week and for two

months longer each year than North American students. In addition, they have long hours

of homework. A large majority of Japanese students attend juku, or preparatory schools, in

the evenings and on Sundays. In higher education, while lacking the strong University

system which exists in North America, the curriculum is equally rigorous, and "Japan is

graduating 75 000 engineers per year, 3 000 more than the U.S., from a University

population one fifth the size."8 "The education system itself is a unifying force. It molds

children into group oriented beings by demanding uniformity and conformity form the

earliest ages. The attainment of excellence within this complex environment, and the

importance it holds for one's future is stressed early."9 This emphasis places a great burden

on the young to perform well in school an to earn admittance to high status universities.

The public school system not only produces good, obedient citizens, it produces good

workers. A willingness to give oneself to the corporation's best interest, to arrive early and

stay late, and to produce good work are attributes learned in the Japanese schools. Those

who cannot learn these skills do not do well in school or do not rise in the ranks of the

corporate world. The education system is an excellent example of how the Japanese

recognize and develop the necessary human skills that are needed in society and stressed in

the business world..

One of the most important aspects of Japan's successful economics is the countries

employment system. The system is very complex and has many hidden but powerful

aspects that help Japan maximize its output. The system's three main principles of lifetime

employment, company unions, and seniority pay, work together to form a system worthy

of notice. "The system is based on comprehensive labour regulation, and it has been

consciously invented as Japan's answer to a Western labour system that Japanese leaders

have long believed is inappropriate for an advanced economy."10 "The whole system is

based around a people-centered management. Japanese companies undertake their annual

hiring of recent graduates expecting all the people they hire to work with them until

retirement."11 Lifetime employment is often regarded as a key factor behind Japan's

industrial success. Yet, "lifetime employment as practiced in Japan is no more than a

general guiding principle. It is by no means a guarantee and only the large companies can

afford to assure employment."12 The obvious value of such a system is the sense of

stability it presents. But there are many advantages to such a system. "Consider how

valuable the lifetime employment system is in winning worker cooperation for the

introduction of productivity enhancing new technologies. Japanese workers see no

downside risk in helping their employers improve productivity, they embrace new

technology knowing it will enhance their company's future and their own jobs. Workers

can then be reassigned to different work, typically making improved products."13 "The

American hire-and-fire system sets works and managers against each other over new

technology. American workers are suspicious of new technology because employers often

use such technology to cut jobs. If a company is to innovate, it must train its workers to

handle ever more sophisticated tasks."14 "Here again the Japanese labour system provides

Japanese employers with a vital advantage in that they can undertake expensive training

programs knowing they will enjoy a good return on the investment."15 By contrast,

American employers see such training as a risk because the workers are free to take their

skills to rival employers. Japanese management is also a major source of Japan's success.

"A Japanese manager knows that the decisions he makes today remain permanently on his

record and he may be asked to account for them many years down the road. He cannot

simply sweep problems away. The company's long term success always has to be on the

mind of the manager."16 "The lifetime employment system also enables Japanese

corporations to groom prospective executives for many years." The managers know that

the path to success is to dedicate themselves single- mindedly to the success of their

companies. The lifetime employment system contributes greatly to raising employees'

desire to work and to fostering loyalty and commitment to the company."17 The merits of

the Japanese employment system are endless. The healthy relations provide a basis for

growth. All the aspects of the employment system develop skills necessary for a stable


Ever since the Tokyo stock market entered a period of decline in 1990, the Western

press has attacked aspects of Japan's economics and portrayed Japan as in an economic

slump. Westerners endlessly attack the Japanese employment system. It is true that the

system was supposed to make workers fiercely dedicated to their employers, but it

prevented Japanese companies from cutting the size of the work force in hard times.

"While Canadian companies emerged from the recession leaner and more competitive,

Japanese firms stagnated."18 The argument is always the same: as the world economy

"globalizes", Japanese corporations are being drawn into increasingly head-to-head

competition with Western counterparts and face extinction if they do not adopt the "more

efficient" Western system of employment. This argument was "never more insistent than

in the recession of the early 1990's"19, but, as on previous occasions, the Japan

Employment system triumphantly silenced its critics by emerging from the recession as

strong as ever. Westerners cut jobs to increase profits, the Japanese cut profits to increase

jobs. Western critics also attack the Japanese education system. "Although often noted for

their rigor and high test results, the school system is seen as presenting a dark side with

conservatism and conformity."20 A modern economy is argued to "need creative thinkers

willing to take risks, which Japan's schools are not producing."21 This may be true as Japan

has a history of copying Western products detail by detail. The lack of creativity is

dismissed by the Japanese. They feel that "copying is common sense. Relieved of the

burden of having to come up with original designs, Japanese manufacturers can

concentrate all their creative talents on the far more economically effective task of beating

Western rivals in productivity."22 The school systems are producing thinkers and problem

solvers. All of these attacks are underestimating the power of the Japanese. Is it an

economic slump when "in the first four years of this decade, Japanese exports soared by 32

percent, the yen rose 27 percent, and Japanese employers created 3.2 million new jobs.

Japan is not crumbling, it has now surpassed the U.S. to become the world's largest

manufacturing economy and is ready to claim the lion's share of the world's growth."23

Attacks on Japan's ways are countless. Obviously there are many problems with the

way they run their country. Yet, no one can ignore the economic success that Japan has

had. The roots of the success can be traced back to the skills developed through culture

and education, and the healthy attitudes developed by the Japanese employment system.

The Western world could learn much from what makes the Japanese successful in

business. It is not just a case of adopting Japanese techniques and technology but of

recognizing and developing the necessary human skills. The East has borrowed heavily

from the West in improving its business performance; the West could also take note of the

lessons of Japanese history and culture and consider applying them in its own


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