| Yasutsugu Takeda Chairperson of the RWCP Management Board Senior Executive Managing Director, Hitachi, Ltd. |
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| Yasutsugu Takeda Chairperson of the RWCP Management Board Senior Executive Managing Director, Hitachi, Ltd. |
It began with the tearing-down of the Berlin Wall and ended with the collapse of the Soviet Union. Capitalism had finally triumphed in one of the biggest conflicts of the 20th century - the ideological battle against socialism. But as a capitalist country, Japan was scarcely directly affected.
In another battle or competition between the "peoplism" management system (a management system primarily focused on people) of Japan and the American capitalistic management system during the 1990s, the United States looks set to be the winner. Japan will be the loser this time and the influence of the loss will be tremendous. The situation was well described in a serial article entitled "Yuragu `Jinhon Shugi' (`Peoplism' at Risk)" which appeared in the Nihon Keizai Shimbun from May 1 through 5, 1991.
Many Japanese business leaders believe that "peoplism" should be the principle of Japanese management style as it can maximize the vitality and capability of employees more than America's rational style of management, and because Japan has few natural resources and people are its only resource. However, many corporate scandals and crimes have recently hit Japan, and in most cases, management systems dependent on long-term particular personal relations caused business failure, perhaps suggesting that traditional Japanese management practices have limitations.
The disclosure of information is always important. And the decisions, activities and performance of top management must be constantly examined by shareholders. The collapse of the lifetime employment system is another evidence of the limitations of the Japanese management system. Most Japanese companies are now weighed down by excessive capacity purchased or invested during the bubble years of the late 1980s, and are now working hard to restructure their organizations and personnel resources and to streamline their businesses.
But stop and think what's happening. In my opinion, restructuring, which is the most popular remedy for the ailing Japanese economy, is an over-simplistic solution. I cannot entirely agree with the American way of thinking, which is that some people will have to live in poverty provided a few shrewd people (often called the "brightest") are richly rewarded. A careful reading of recent newspapers shows that opinions are changing slightly. An article in the Nihon Keizai Shimbun dated November 1, 1998, reported "Japanese companies are being forced to drastically restructure themselves. Company A, for example, will cut 4,000 employees by March, 1999, while Company B will slash 6,000 employees by March, 2000. `Peoplism', which takes good care of employees, has been a strength of the Japanese management system, but this benign approach may be incompatible with the `capitalism' to which Japanese companies are gradually being exposed."
Since the 1980s, Professor Hiroyuki Itami of Hitotsubashi University has been advocating that the origin of Japanese companies' strength is "peoplism" which efficiently motivates people and encourages them to willingly display their real ability. When he was asked if "peoplism" had already come to end as more Japanese companies strictly screen their employees, Prof. Itami commented: "The personnel performance evaluation system of Japanese companies has come to an extreme of perverted equality from the point of view of a person who has advocated `peoplism' like me. The morale of an organization may be lowered if every member is treated with absolute equality regardless of individual effort or performance. Japan is now in a transition phase and moving toward the American style of management. However, the movement will settle itself at a position closer to `peoplism' than to the American counterpart." (Nihon Keizai Shimbun, June 10, 1998)
As an executive of a Japanese company, I have had many opportunities to meet and discuss with more than 1,000 international business leaders. Among the directors and executives of US, European and Asian firms that are famous for their corporate reliability, I met some respectable people who think positively and are determined to make progress every day. They know the importance of personal relations, take great delight in meeting friends again and are much concerned over their friends' health. In this sense, "peoplism" is not a corporate culture exclusively found in Japanese firms.
What are the drawbacks of "peoplism" or the traditional Japanese management system? Before answering this question, let's take a look at other countries which are behind Japan in terms of the development of modern society. Such developing countries are often controlled by a prolonged regime, or by a single or very limited number of families, and their government officials and private companies have corrupt and collusive relations. Similar problems afflicted most of the Japanese companies that have failed during the last decade. "Peoplism" can provide fertile ground for these backward parasites who have surely existed as far back as the feudal ages. They must be eliminated first.
In this sense, information must be fully disclosed and those in power must be closely watched by the general public. The Council for Science and Technology recently issued a proposal concerning "Plans to Strategically Promote Information Science and Technology in the Future." Regarding the various possibilities for science and technology, the proposal comments, "Information technology holds tremendous potential to change for better direction of our economy and society." The proposal goes on to state, "Along with the possibility to create new industries by new techniques, improving the productivity of existing industries and by integrating different industrial areas, information technology will dramatically change research and development methodologies." Following this sentence, I would like to add the phrase "And it (information technology) will reform the mechanism and methods of business management as well."
After I read the proposal and considered the additional phrase, I met a skilled businessman, who was the president of a small Japanese firm in California. He had been quite young to head up a company when he was appointed to the post five years ago. At that time, the company was in total disarray, and arguments, theft and graffiti were everyday occurrences. The company's business was in a terrible state, too, with total debts far exceeding its capital. No employee said "good morning" or "hi" when they met their president in the morning, and the president was at a loss as to what to do. So, he decided to start with those actually doing their work to improve the situation in the workplace, and kindly guided employees one by one. As a result of his hard efforts, staff morale improved. Although people had thought it would take more than 10 years to reconstruct the company, he achieved it in just two years and business started to pick up. The young president still tours the workshop everyday, and knows all employees by name and greets them one by one. He told me he could feel that his staff keenly waited for their CEO to arrive each day. "I've found that running a company involves captivating the people." His comment was refreshingly impressive and exactly what I'd expected of him.
As Professor Itami pointed out, "peoplism" should not go to extremes. We should not allow "backward parasites" to find their breeding ground. We should fully utilize the best of modern information technologies and skills. I still believe in the principle of "peoplism" which is that the basis of business is to take good care of "people." With new "peoplism" in mind, I'm determined to take a fresh approach this summer.