Saturday, June 14, 2008
Sunday, June 8, 2008
Japanese Management Theory
Theory Z: (Emerging Approach in Management Thought):
William Ouchi, a management expert, conducted research on both American (Theory X) and Japanese (Theory Y) and outlined a new theory called Theory Z. This theory combines the positive aspects of both the theories. The theory Z approach involves providing job security to employees to ensure their loyalty and long-term association with the company. It also involves job rotation of employees to develop their cross-functional skills. It also advocates the decision-making participation of the employees and emphasizes the use of formal control in the organization along with explicit performance measures. The organization shows concern to their employees’ well-being and lays emphasis on their training and development. The quality management is also the type of thought involves in this.
In other words, Theory Z companies were American in origin, but Japanese in conduct and experience. They used some Japanese managerial practices, but made adjustments according to the environment prevailing in the United States. Ouchi’s work showed that American organizations could benefit from thoughtful incorporation of the Japanese management practices.
Japanese Management Theory
Some of the specific Japanese management practices are appended below:
1. Lifetime Employment: Lifetime employment (Shushin Koyo) refers to recruitment of employees immediately upon graduation, generation of employment until retirement, and mandatory retirement. Under this, an employee spends his entire working life with a single enterprise. This helps generate a feeling of job security in the employee and a feeling of belongingness towards the enterprise. This concept brings “harmony”, which results employee loyalty.
2. Seniority System: This concept is closely related to the concept of lifetime employment. Companies following this concept, provide privileges to older employees who have been with it for a long time. Promotion and wages increases are based on the employee’s length of service (henko) in the company, not job performance.
3. Continuous Training: The secret of the success of Japanese managers may lie in “continuous training.” In Japanese firms however, every young manager has a “godfather,” who is never his boss or anyone in the direct line of authority. The “godfather” is not part of the top management, but is highly respected by others and is over 45 years of age. He is expected to advise, counsels and looks after his “godchild.”
4. Emphasis on Group Work: In Japanese organizations, a task is not assigned to an individual; instead several tasks are assigned to a group, which consists of a small number of people.
5. Decision-Making: In Japan, concept that change and new ideas should come primarily from personnel belonging to lower levels in the hierarchy. Thus, lower level prepares proposals for higher-level personnel. The “ringi system” refers to decision-making by consensus.
6. Complicated Performance Evaluation: When job descriptions are not well defined, and when tasks are performed by groups, it become difficult to evaluate individual job performance objectively and takes very long time. It also requires use of qualitative and quantitative information about performance. Since jobs are done on a group basis, individual merit rating systems cannot be used to demonstrate individual brilliance or dynamic leadership and job responsibility can’t be allocated.
7. Good benefits for Employees: Japanese companies provide substantial benefits to their employees. Such as housing and transportation allowances, bachelor accommodations, scholarships to their children, and low interest housing loans. Also includes rapid salary enhancements, premium pay for overtime etc. In Japanese companies, an employee moves up to the top of the corporate ladder and gets Car and a chauffeur, and memberships in social clubs and golf club. They also have post retirement schemes for all.
8. Simple and Flexible organization: In Japanese firms, very often, people are trained to be generalists. For this reason, the organization structure in Japan is relatively simple and flexible, and it is possible for people to take up a new challenge or a new task by forming a new formal or informal group.
To sum up, Japanese managerial practices emphasize lifetime employment, concern for the individual, seniority, and a sense of loyalty to the firm. Furthermore, decision-making is based on principles of full information sharing and consensus. They also carry out a complicated performance evaluation process, emphasize “father-like” leadership and offer employees good benefits.
William Ouchi, a management expert, conducted research on both American (Theory X) and Japanese (Theory Y) and outlined a new theory called Theory Z. This theory combines the positive aspects of both the theories. The theory Z approach involves providing job security to employees to ensure their loyalty and long-term association with the company. It also involves job rotation of employees to develop their cross-functional skills. It also advocates the decision-making participation of the employees and emphasizes the use of formal control in the organization along with explicit performance measures. The organization shows concern to their employees’ well-being and lays emphasis on their training and development. The quality management is also the type of thought involves in this.
In other words, Theory Z companies were American in origin, but Japanese in conduct and experience. They used some Japanese managerial practices, but made adjustments according to the environment prevailing in the United States. Ouchi’s work showed that American organizations could benefit from thoughtful incorporation of the Japanese management practices.
Japanese Management Theory
Some of the specific Japanese management practices are appended below:
1. Lifetime Employment: Lifetime employment (Shushin Koyo) refers to recruitment of employees immediately upon graduation, generation of employment until retirement, and mandatory retirement. Under this, an employee spends his entire working life with a single enterprise. This helps generate a feeling of job security in the employee and a feeling of belongingness towards the enterprise. This concept brings “harmony”, which results employee loyalty.
2. Seniority System: This concept is closely related to the concept of lifetime employment. Companies following this concept, provide privileges to older employees who have been with it for a long time. Promotion and wages increases are based on the employee’s length of service (henko) in the company, not job performance.
3. Continuous Training: The secret of the success of Japanese managers may lie in “continuous training.” In Japanese firms however, every young manager has a “godfather,” who is never his boss or anyone in the direct line of authority. The “godfather” is not part of the top management, but is highly respected by others and is over 45 years of age. He is expected to advise, counsels and looks after his “godchild.”
4. Emphasis on Group Work: In Japanese organizations, a task is not assigned to an individual; instead several tasks are assigned to a group, which consists of a small number of people.
5. Decision-Making: In Japan, concept that change and new ideas should come primarily from personnel belonging to lower levels in the hierarchy. Thus, lower level prepares proposals for higher-level personnel. The “ringi system” refers to decision-making by consensus.
6. Complicated Performance Evaluation: When job descriptions are not well defined, and when tasks are performed by groups, it become difficult to evaluate individual job performance objectively and takes very long time. It also requires use of qualitative and quantitative information about performance. Since jobs are done on a group basis, individual merit rating systems cannot be used to demonstrate individual brilliance or dynamic leadership and job responsibility can’t be allocated.
7. Good benefits for Employees: Japanese companies provide substantial benefits to their employees. Such as housing and transportation allowances, bachelor accommodations, scholarships to their children, and low interest housing loans. Also includes rapid salary enhancements, premium pay for overtime etc. In Japanese companies, an employee moves up to the top of the corporate ladder and gets Car and a chauffeur, and memberships in social clubs and golf club. They also have post retirement schemes for all.
8. Simple and Flexible organization: In Japanese firms, very often, people are trained to be generalists. For this reason, the organization structure in Japan is relatively simple and flexible, and it is possible for people to take up a new challenge or a new task by forming a new formal or informal group.
To sum up, Japanese managerial practices emphasize lifetime employment, concern for the individual, seniority, and a sense of loyalty to the firm. Furthermore, decision-making is based on principles of full information sharing and consensus. They also carry out a complicated performance evaluation process, emphasize “father-like” leadership and offer employees good benefits.
Theory Z: (Emerging Approach in Management Thought): William Ouchi
Japanese Management Theory
Theory Z: (Emerging Approach in Management Thought):
William Ouchi, a management expert, conducted research on both American (Theory X) and Japanese (Theory Y) and outlined a new theory called Theory Z. This theory combines the positive aspects of both the theories. The theory Z approach involves providing job security to employees to ensure their loyalty and long-term association with the company. It also involves job rotation of employees to develop their cross-functional skills. It also advocates the decision-making participation of the employees and emphasizes the use of formal control in the organization along with explicit performance measures. The organization shows concern to their employees’ well-being and lays emphasis on their training and development. The quality management is also the type of thought involves in this.
In other words, Theory Z companies were American in origin, but Japanese in conduct and experience. They used some Japanese managerial practices, but made adjustments according to the environment prevailing in the United States. Ouchi’s work showed that American organizations could benefit from thoughtful incorporation of the Japanese management practices.
Japanese Management Theory
Some of the specific Japanese management practices are appended below:
1. Lifetime Employment: Lifetime employment (Shushin Koyo) refers to recruitment of employees immediately upon graduation, generation of employment until retirement, and mandatory retirement. Under this, an employee spends his entire working life with a single enterprise. This helps generate a feeling of job security in the employee and a feeling of belongingness towards the enterprise. This concept brings “harmony”, which results employee loyalty.
2. Seniority System: This concept is closely related to the concept of lifetime employment. Companies following this concept, provide privileges to older employees who have been with it for a long time. Promotion and wages increases are based on the employee’s length of service (henko) in the company, not job performance.
3. Continuous Training: The secret of the success of Japanese managers may lie in “continuous training.” In Japanese firms however, every young manager has a “godfather,” who is never his boss or anyone in the direct line of authority. The “godfather” is not part of the top management, but is highly respected by others and is over 45 years of age. He is expected to advise, counsels and looks after his “godchild.”
4. Emphasis on Group Work: In Japanese organizations, a task is not assigned to an individual; instead several tasks are assigned to a group, which consists of a small number of people.
5. Decision-Making: In Japan, concept that change and new ideas should come primarily from personnel belonging to lower levels in the hierarchy. Thus, lower level prepares proposals for higher-level personnel. The “ringi system” refers to decision-making by consensus.
6. Complicated Performance Evaluation: When job descriptions are not well defined, and when tasks are performed by groups, it become difficult to evaluate individual job performance objectively and takes very long time. It also requires use of qualitative and quantitative information about performance. Since jobs are done on a group basis, individual merit rating systems cannot be used to demonstrate individual brilliance or dynamic leadership and job responsibility can’t be allocated.
7. Good benefits for Employees: Japanese companies provide substantial benefits to their employees. Such as housing and transportation allowances, bachelor accommodations, scholarships to their children, and low interest housing loans. Also includes rapid salary enhancements, premium pay for overtime etc. In Japanese companies, an employee moves up to the top of the corporate ladder and gets Car and a chauffeur, and memberships in social clubs and golf club. They also have post retirement schemes for all.
8. Simple and Flexible organization: In Japanese firms, very often, people are trained to be generalists. For this reason, the organization structure in Japan is relatively simple and flexible, and it is possible for people to take up a new challenge or a new task by forming a new formal or informal group.
To sum up, Japanese managerial practices emphasize lifetime employment, concern for the individual, seniority, and a sense of loyalty to the firm. Furthermore, decision-making is based on principles of full information sharing and consensus. They also carry out a complicated performance evaluation process, emphasize “father-like” leadership and offer employees good benefits.
Theory Z: (Emerging Approach in Management Thought):
William Ouchi, a management expert, conducted research on both American (Theory X) and Japanese (Theory Y) and outlined a new theory called Theory Z. This theory combines the positive aspects of both the theories. The theory Z approach involves providing job security to employees to ensure their loyalty and long-term association with the company. It also involves job rotation of employees to develop their cross-functional skills. It also advocates the decision-making participation of the employees and emphasizes the use of formal control in the organization along with explicit performance measures. The organization shows concern to their employees’ well-being and lays emphasis on their training and development. The quality management is also the type of thought involves in this.
In other words, Theory Z companies were American in origin, but Japanese in conduct and experience. They used some Japanese managerial practices, but made adjustments according to the environment prevailing in the United States. Ouchi’s work showed that American organizations could benefit from thoughtful incorporation of the Japanese management practices.
Japanese Management Theory
Some of the specific Japanese management practices are appended below:
1. Lifetime Employment: Lifetime employment (Shushin Koyo) refers to recruitment of employees immediately upon graduation, generation of employment until retirement, and mandatory retirement. Under this, an employee spends his entire working life with a single enterprise. This helps generate a feeling of job security in the employee and a feeling of belongingness towards the enterprise. This concept brings “harmony”, which results employee loyalty.
2. Seniority System: This concept is closely related to the concept of lifetime employment. Companies following this concept, provide privileges to older employees who have been with it for a long time. Promotion and wages increases are based on the employee’s length of service (henko) in the company, not job performance.
3. Continuous Training: The secret of the success of Japanese managers may lie in “continuous training.” In Japanese firms however, every young manager has a “godfather,” who is never his boss or anyone in the direct line of authority. The “godfather” is not part of the top management, but is highly respected by others and is over 45 years of age. He is expected to advise, counsels and looks after his “godchild.”
4. Emphasis on Group Work: In Japanese organizations, a task is not assigned to an individual; instead several tasks are assigned to a group, which consists of a small number of people.
5. Decision-Making: In Japan, concept that change and new ideas should come primarily from personnel belonging to lower levels in the hierarchy. Thus, lower level prepares proposals for higher-level personnel. The “ringi system” refers to decision-making by consensus.
6. Complicated Performance Evaluation: When job descriptions are not well defined, and when tasks are performed by groups, it become difficult to evaluate individual job performance objectively and takes very long time. It also requires use of qualitative and quantitative information about performance. Since jobs are done on a group basis, individual merit rating systems cannot be used to demonstrate individual brilliance or dynamic leadership and job responsibility can’t be allocated.
7. Good benefits for Employees: Japanese companies provide substantial benefits to their employees. Such as housing and transportation allowances, bachelor accommodations, scholarships to their children, and low interest housing loans. Also includes rapid salary enhancements, premium pay for overtime etc. In Japanese companies, an employee moves up to the top of the corporate ladder and gets Car and a chauffeur, and memberships in social clubs and golf club. They also have post retirement schemes for all.
8. Simple and Flexible organization: In Japanese firms, very often, people are trained to be generalists. For this reason, the organization structure in Japan is relatively simple and flexible, and it is possible for people to take up a new challenge or a new task by forming a new formal or informal group.
To sum up, Japanese managerial practices emphasize lifetime employment, concern for the individual, seniority, and a sense of loyalty to the firm. Furthermore, decision-making is based on principles of full information sharing and consensus. They also carry out a complicated performance evaluation process, emphasize “father-like” leadership and offer employees good benefits.
JAPANESE AND US MANAGEMENT APPROACHES
JAPANESE AND US MANAGEMENT APPROACHES
Japanese Management US Management
Planning
1. Long-term orientation 1. Primarily short-term orientation
2. Collective decision-making with consensus Individual decision-making
3. Involvement of many people while preparing and making the decision 3. Involvement of few people in making and “selling” the decisions to persons with divergent values.
4. Decisions flow bottom to Top and back 4. Decisions initiated at the Top, following down
5. Slow decision making; fast implementation of decisions 5. Fast decision-making; slow implementation requiring compromise, often resulting on sub-optimal decisions.
Organizing
1. Collective responsibility and accountability 1. Individual responsibility and accountability
2. Ambiguity of decision responsibility 2. Clear and specific decision responsibility
3. Informal Organization structure 3. Formal bureaucratic organizational structure
4. Well known common organization culture and philosophy; competitive spirit towards the enterprises 4. Lack of common organization culture, identification with profession rather than with company
Staffing
1. Young people hired out of school; hardly any mobility of people among companies 1. Young people hired out of school
2. Slow promotion through the ranks 2. Rapid advancement desired and demanded
3. Loyalties to the company 3. Loyalty to the profession
4. Very infrequent performance evaluation for new (young) employees 4. Frequent performance evaluation for new employees
5. Appraisal of long-term performance 5. Appraisal of short-term results
6. Promotions based on multiple criteria 6. Promotions based primarily on individuals performance
7. Training and development considered a long-term investment 7. Training and development undertaken with hesitance (for fear of turnover)
8. Life time employment common in large companies 8. Job insecurity prevailing
Leading
1. Leader acting as a social facilitator and group member 1. Leader acting as a decision-maker and head of the group
2. Paternalistic style 2. Directive style (strong firm, determined)
3. Common values facilitating co-operation 3. Often divergent values, individualism sometimes hindering co-operation
4. Avoidance of confrontation, sometimes leading to ambiguities; emphasis on harmony 4. Face-to-face confrontation common; emphasis on clarity
5. Bottom –up communication 5. Communication primarily Top to Bottom
Controlling
1. Control by peers 1. Control by superior
2. Control focus on group performance 2. Control focus on individual performance
3. Saving face 3. Fixing blame
4. Extensive use of quality control circles 4. Limited use of quality control circles
Japanese Management US Management
Planning
1. Long-term orientation 1. Primarily short-term orientation
2. Collective decision-making with consensus Individual decision-making
3. Involvement of many people while preparing and making the decision 3. Involvement of few people in making and “selling” the decisions to persons with divergent values.
4. Decisions flow bottom to Top and back 4. Decisions initiated at the Top, following down
5. Slow decision making; fast implementation of decisions 5. Fast decision-making; slow implementation requiring compromise, often resulting on sub-optimal decisions.
Organizing
1. Collective responsibility and accountability 1. Individual responsibility and accountability
2. Ambiguity of decision responsibility 2. Clear and specific decision responsibility
3. Informal Organization structure 3. Formal bureaucratic organizational structure
4. Well known common organization culture and philosophy; competitive spirit towards the enterprises 4. Lack of common organization culture, identification with profession rather than with company
Staffing
1. Young people hired out of school; hardly any mobility of people among companies 1. Young people hired out of school
2. Slow promotion through the ranks 2. Rapid advancement desired and demanded
3. Loyalties to the company 3. Loyalty to the profession
4. Very infrequent performance evaluation for new (young) employees 4. Frequent performance evaluation for new employees
5. Appraisal of long-term performance 5. Appraisal of short-term results
6. Promotions based on multiple criteria 6. Promotions based primarily on individuals performance
7. Training and development considered a long-term investment 7. Training and development undertaken with hesitance (for fear of turnover)
8. Life time employment common in large companies 8. Job insecurity prevailing
Leading
1. Leader acting as a social facilitator and group member 1. Leader acting as a decision-maker and head of the group
2. Paternalistic style 2. Directive style (strong firm, determined)
3. Common values facilitating co-operation 3. Often divergent values, individualism sometimes hindering co-operation
4. Avoidance of confrontation, sometimes leading to ambiguities; emphasis on harmony 4. Face-to-face confrontation common; emphasis on clarity
5. Bottom –up communication 5. Communication primarily Top to Bottom
Controlling
1. Control by peers 1. Control by superior
2. Control focus on group performance 2. Control focus on individual performance
3. Saving face 3. Fixing blame
4. Extensive use of quality control circles 4. Limited use of quality control circles
RELATIONSHIP BETWEEN PLANNING AND CONTROLLING
RELATIONSHIP BETWEEN PLANNING AND CONTROLLING
Planning and Controlling are inter-related within any organization. Planning sets the goals for the organization and controlling ensures its accomplishment. Planning decides the control process and controlling provides sound basis for planning. In simple words, planning and controlling are basically dependent on each other. The relationship between them is explained as under:
1. Planning Originates Controlling: In planning process, the objectives or targets are to be set, and to achieve those goals, control process is required. So we can say that Planning precedes control.
2. Control sustains planning: Controlling directs the course of planning. Controlling spots the areas where planning is required.
3. Controlling provides information for planning: In controlling, the performance is compared with standards and deviations, if any, are to be recorded. The information collected during any type of control, is used for planning also.
4. Planning and control are inter-related: Planning is the initial step and controlling is in the process and required at every step. For the same both are dependent upon each other and inter-related.
5. Both are forward looking: Planning is always for the future and control is forward looking. No one has the control on past, it is only the future, which can be controlled.
Planning and Controlling are concerned with the achievement of business goals. Their combined efforts are to achieve maximum output with minimum cost effect. Both, systematic planning and organized controlling are essential to achieve the organizational goals.
Planning and Controlling are inter-related within any organization. Planning sets the goals for the organization and controlling ensures its accomplishment. Planning decides the control process and controlling provides sound basis for planning. In simple words, planning and controlling are basically dependent on each other. The relationship between them is explained as under:
1. Planning Originates Controlling: In planning process, the objectives or targets are to be set, and to achieve those goals, control process is required. So we can say that Planning precedes control.
2. Control sustains planning: Controlling directs the course of planning. Controlling spots the areas where planning is required.
3. Controlling provides information for planning: In controlling, the performance is compared with standards and deviations, if any, are to be recorded. The information collected during any type of control, is used for planning also.
4. Planning and control are inter-related: Planning is the initial step and controlling is in the process and required at every step. For the same both are dependent upon each other and inter-related.
5. Both are forward looking: Planning is always for the future and control is forward looking. No one has the control on past, it is only the future, which can be controlled.
Planning and Controlling are concerned with the achievement of business goals. Their combined efforts are to achieve maximum output with minimum cost effect. Both, systematic planning and organized controlling are essential to achieve the organizational goals.
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