“The idea of a corporate global village where a common culture of management unifies the practice of business around the world is more dream than reality” (Kanter 1991: 152).
This quotation points out the importance of knowing other cultures before doing business worldwide. For mergers and acquisitions as well as for any kind of negotiation it is imperative to know the other party, especially if the environment is a different one and cultural roots differ from those at home. If two cultures, as different as the Japanese and the American cultures start doing business together, it is important to be aware of difficulties that may arise which is why the intention of this part of the paper is firstly to illustrate the differences between those two countries and secondly to highlight the example of the General Motor-Suzuki joint venture one way to a successful cross-cultural partnership.
Culture
Business Culture of Japan
The Japanese approach to business is determined by history and as such is a reflection of Japanese society as a whole. In order to work and interact successfully with your contacts in Japan, a basic understanding of some of the underlying concepts governing business life is essential.
Some of these underlying concepts are so fundamentally different from western models that adjustment can be difficult and complete comprehension almost impossible. The most important concept to grasp is that of the overwhelming importance of personal relationships within the business cycle. Of all the business cultures of the world, Japan is one of those most strongly rooted in the concept that relationships should come before business, rather than business being more important than personal considerations.
This means that in order to achieve success in Japan, it is important to put the maximum amount of time and resource into the early stages of relationship-building – even when eventual results may seem a long way off.
Business models in Japan are currently under enormous strain and there is massive pressure (both internal and external) for reform. Yet change comes slowly to Japan and old traditions and loyalties stay behind. Expect changes to happen, but do not expect an easy or quick transition.
Japanese Management Style
Japanese management emphasizes the need for information flow from the bottom of the company to the top. This results in senior management having a largely supervisory rather than ‘hands-on’ approach. As a result, it has been noted that policy is often originated at the middle-levels of a company before being passed upwards for ratification. The strength of this approach is obviously that those tasked with the implementation of decisions have been actively involved in the shaping of policy.
The higher a Japanese manager rises within an organization, the more important it is that he appears ordinary and unmotivated. Individual personality and forcefulness are not seen as the prerequisites for effective leadership.
The key task for a Japanese manager is to provide the environment in which the group can flourish. In order to achieve this he must be accessible at all times and willing to share knowledge within the group. In return for this open approach, he expects team members to keep him fully informed of developments. This reciprocity of relationship forms the basis of good management and teamwork.
Instructions from managers can seem extremely vague to western ears and this often causes confusion and frustration. This difficulty is
caused, in no short measure, by problems around styles of communication. As users of coded-speech (where what one says does not necessarily correspond to what one actually means), direct, clear instructions are not needed. The Japanese subordinate will second-guess the boss’ wishes and react accordingly. It is, therefore, often necessary to ask for clarification if tasks seem vague or unclear. It is better to seek clear understanding at the outset that to allow misunderstandings to produce poor results or tensions in the relationship.
Japanese Business Structures
Up until World War Two, Japan was dominated by a small number of very large companies, the zaibatsu, and these companies had massive influence on the economy. However, in recent years the Japanese economy has become much more varied in terms of the size and structure of its companies, producing a complex web of inter-locking relationships between large and small firms. Competition amongst these smaller firms is very strong which results in a great number of bankruptcies in this sector – therefore the concept of life-time employment enjoyed by the total workforce is, and has been for some time, a myth.
Get Help With Your Essay
If you need assistance with writing your essay, our professional essay writing service is here to help!
Japanese companies, like Japanese society, are hierarchically organized with individuals knowing their position within a group and with regard to each other. It is this sense of belonging to the group that gives Japanese companies their strength and purpose. Group orientation and team working are not merely concepts and phrases in Japan but a way of life which permeates all aspects of corporate life at all levels.
Japanese hierarchy is based on consensus and co-operation rather than the top-down decision making process which often typifies western models of hierarchy. This means that people feel actively involved and committed.
Business culture of America
More than any other industrialized country, the United States has adopted what could be labeled a ‘scientific’ approach to business. Every aspect of commercial life is studied and analyzed and this scientific approach is both respected and acted upon. Far more resource is available in the US for the study of the methodology of business than in any other country and most new management theory and doctrines have their origins in the States.
In the States everything is quantified and assessed. All processes, even down to such issues as HR and Training are analyzed in a detailed manner and the results of this analysis carry weight with decision makers.
This ‘scientific’ approach – the constant search for better, more effective methods – has led to a business environment typified by the presence of change as a constant factor. The most common response to a changing environment is realignment of the organization and this, in turn, has produced a work force in a state of constant flux. People leave, are fired or made redundant and then reappear in another organization. This sense of employee mobility should not, however, be equated with a lack of loyalty to the employer for whom you are currently working. Whilst working for the company you put everything into the job and are totally committed.
American Management Style
American management style can be described as individualistic in approach, in so far as managers are accountable for the decisions made within their areas of responsibility. Although important decisions might be discussed in open forum, the ultimate responsibility for the consequences of the decision lies with the boss – support or seeming consensus will evaporate when things go wrong. The up side of this accountability is, of course, the American dream that outstanding success will inevitably bring outstanding rewards.
Therefore, American managers are more likely to disregard the opinions of subordinates than managers in other, more consensus or compromise- oriented cultures. This can obviously lead to frustrations, which can sometimes seem to boil over in meeting situations. (See ‘Approach to meetings’ below.)
Titles can be very confusing within American organizations with a bewildering array of enormously important-sounding job descriptors on offer (Second Vice-President etc.). Titles, in any case, tend to be a poor reflection of the relative importance of an individual within a company. Importance is linked to power, which could be determined by a number of factors such as head-count responsibility, profitability of sector or strategic importance to the organisation at that point in time.
American Business Structures
Business structures in the USA are incredibly varied but tend to have several characteristics in common.
Firstly, the company is an entity in its own right and exists independently from its employees. Members come and go, perform necessary tasks at particular points in the life cycle of the company and then leave when no longer required for the wellbeing of the organization. The relationship between employer and employee is a transactional one – where relationship and sentimentare a luxury which cannot be justified.
Secondly, the CEO of an American organization holds great sway within the company. Senior management is more embedded in the personality at the top than in some other countries, such as Germany, where senior management is collegiate in approach. Although the company will have a Board of Directors, the Board is highly unlikely to have any input on the day-to-day running of the company which is left very much in the hands of the CEO who stands or falls on results.
Thirdly, accountability within the company tends to be vertical and easily observable. Americans like to know exactly where they stand, what are their responsibilities and to whom they report
JAPANESE CULTURE VS American CULTURE
Below table shows the comparison of American and Japanese cultures’ values for each variable.
Table 1
Cultural value differences between Americans and Japanese
Variables
American
Japanese
Nature
Control over nature
Harmony with nature
Time
Present and short-
Past and long-time
time future orienta-
future orientation
tion
Action
Doing for the sake of
Doing and Being part
success
of an organization
Communication
low context
high context
Space
private space
public space
Power
equality emphasis
hierarchy emphasis
Individualism
high individualism
low individualism
Competitiveness
competitive
cooperative
Structure
low structure
high structure
Formality
informal
formal
Differences in negotiation styles between Japan and the US
How Americans and Japanese come to the bargaining table with different perceptions and expectations of the negotiating process.
The very definition of negotiating can vary culture to culture. Before one even comes to the table, such differences in the meaning or purpose of the negotiation affect the negotiation. For example, while Americans generally view negotiation primarily as an opportunity to accomplish or resolve a substantive issue, many cultures view negotiation primarily as an opportunity to build a relationship; resolving a particular issue is simply not the first goal. Such cultures often view the initial meeting as the beginning of a larger negotiation encompassing many meetings.
Find Out How UKEssays.com Can Help You!
Our academic experts are ready and waiting to assist with any writing project you may have. From simple essay plans, through to full dissertations, you can guarantee we have a service perfectly matched to your needs.
View our academic writing services
Americans are sorely mistaken if they expect an agreement at the end of their first meeting with their Japanese associates. The Japanese view the negotiation as a collaborative process of “mind-meeting,” which can mandate several meetings before substantive issues are even discussed. Americans who have traveled halfway around the world to meet their Japanese counterparts for the first time in Tokyo on Monday and expect to be back in their office in Detroit on Friday with a signed deal will surely be disappointed.
Similarly, Americans tend to view negotiating as a competitive process of offers and counteroffers, while the Japanese tend to view the negotiation as an opportunity for information-sharing. Many Americans return from negotiations with the Japanese extremely frustrated: “They just kept pumping me for information,” “They wouldn’t give me any answers, but they sure could ask questions,” “I got nothing I wanted, although they expected me to divulge the most proprietary information,” etc. These responses indicate a culture clash between the United States and Japan over basic differences in the expectations
General Motor / Suzuki CAMI Project – Case Study
CAMI is a joint-venture automobile manufacturing company between Suzuki Motors and General Motors, based in Ingersoll, Canada, with two complete production lines manufacturing the Cultus/Swift car and Samurai/Vitara 4-wheel drive. The purpose of the joint venture was to allow Suzuki to expand into the American and European markets, and for GM to learn Japanese manufacturing methods (Technology Transfer).
Although GM had had a few joint- ventures with Japanese car manufacturers before, such as NUMMI in Kentucky, there were a number of features which make this venture different from previous ones: a) The plant was to be operated and managed purely by local (Canadian) people right from the very beginning yet apply a completely Japanese manufacturing and management style (assisted initially by 200 Japanese ‘advisors’), b) the work force was to be completely unionized under a new agreement with the CAU, and c) the plant was to be completely green field in terms of site and people. In order for the venture to succeed under these parameters it was crucial for the initial technology transfer and training (of 2,000 ‘associates’) to happen smoothly.
MACC-LR was awarded the contract to assist Suzuki in the initial consulting and preparatory training stages of this project, and F. Knuchel was the consulting project manager for the training. The consulting package comprised the preparation of training manuals for each plant shop including developing training videos, intensive 6-month training of selected 200 Suzuki managers and plant supervisors, as well as ongoing programme assessment of the actual technology transfer. Training involved language, intercultural, presentation and OJT training skills. As Suzuki had never done anything similar before, very little written material on the whole production system existed, even in Japanese, so a lot had to be researched through actual observation and interviews by the consultants, working closely with the 200 selected personnel in the training.
The two- year consulting project had divided the selected personnel in eight macro-groups, who were all given intensive 6- month training and joint counseling work staged in line with the subsequent Canadian plant schedules (transfer, plant section completion, trial production, recruitment, OJT training, start of production etc.). Apart from the video production and manuals research & writing crew, the MACC-LR project team consisted of eight consultants/trainers on-site for two years headed by F. Knuchel as project manager.
F. Knuchel’s task was initially acquiring a thorough understanding of all the sections of Kosai plant (the Canadian plant to be modelled after this) and of the total production system. Then he had to translate this into a training programme that would allow the 200 selected Suzuki personnel to transfer the technology to 400 counterpart Canadians. They in turn would train over 2,000 plant operators. The assignment involved assessing each manager’s specific job through interviews, establishing individual training needs, custom-designing the training, briefing, motivating and supervising MACC-LR’s own consultants and trainers (quality control and ongoing progress assessment) and advising the Suzuki team on approach and improvements.
To this end F. Knuchel was totally integrated within the Suzuki project team at Head Office and Kosai Plant and took part in all relevant meetings; he also assessed the actual transfer training when Canadian groups visited Suzuki (1- month training in Japan), including trouble-shooting, assisting the Canadians, and subsequently improving the preparatory training based on the experience gained. At the end of Japanese side of the project, he spent a month in Canada at start of production evaluating the progress and success of the technology transfer (lean production).
The ‘technology’ itself being transferred was the whole production line with its multi-skilled team-work approach for each work unit of the plant from the stamping shop to assembly. It also dealt with general principles of lean manufacturing like small lot production, production levelling, TQC, waste removal, Kaizen, 5S, Andon, TPM and the various factors that enable JIT and lean production. Each supervisor had to be able to relate these principles to their individual work cells.
Most of the plant supervisors were in their forties and fifties, and although highly skilled in their jobs at Suzuki, had no high school or higher education and hence suffered from a complete lack of confidence in their ability to train ‘foreigners’. Most of them had never been outside Japan and were extremely reticent about being transferred to Canada for two years, indeed about the whole project. Apart from basic language training, the programme needed to deal with the initially very negative attitude and develop confidence with the members, creating positive motivation through counseling.
The first three months of the full intensive 6- month training concentrated on this motivation and counseling together with basic language training. The second half consisted of a number of modules focusing on situational survival skills (for living in Canada), intercultural training, and training in actual presentation and training skills (Western style). Outside formal training work in this stage the participants spent the remaining time preparing their actual training, especially training materials, with the assistance of our consultants, and a lot of this work was done on-site in the plant. The results of this in turn fed back to the manual and video production teams, who needed the specific knowledge of each work section to develop their relevant parts in detail.
Overall, the whole project was highly successful, and was a major organizational learning experience for all involved. The 200 Suzuki advisors (all of whom had to be replaced temporarily back in their home plant during the project) were originally scheduled to return to Japan after two years at the Canadian plant. The transfer and actual production went so smoothly, however, that most were able to return within one year. Given the cost of relocation, expatriation and substitution in Japan, this meant a massive cost saving far greater than the cost of the initial MACC-LR preparatory stage consultancy and training. Indeed MACC-LR has a letter of thanks from Mr Suzuki saying that despite initial reservations about the high cost of the preparatory 2-year consultancy, the project had been successful beyond expectations, with a ten fold saving.
The core Canadian managers at CAMI (who themselves had been carefully selected and seconded to CAMI for their competence, youth and being open- minded to new manufacturing approaches) were sent after two years to GM’s newly acquired Eastern European operations to transfer the whole Japanese manufacturing approach to the plants there. After having applied Japanese manufacturing techniques successfully to GM’s peripheral plants, the team was later recalled home and became instrumental in implementing the learned approach to GM’s core plants. Indeed it formed one of the basis of the overall change that has cascaded throughout GM in the last ten years.
Factors of success
Preparing for a Successful JV: HR Action Steps
As Konosuke Matsushita, the legendary founder of Panasonic, put it, “Business is people. Business success is achieved by getting each and every person in the organization to be more successful in the job they do.
Hewitt suggests to take the following human resources (HR) action steps to prepare for a successful joint venture.
Business Strategy. Begin with a sound, well-articulated strategy.
Before moving forward, determine and explain why you wish to enter into a joint venture, why you have chosen your partner(s), and what you hope to achieve. Define involvement (managerial, capital, etc) of the parent companies and how long the JV will last.
Put in place strategies to define governance, accountability, decision-making process, and conflict- and issue-resolution procedures. Ensure buy-in and participation at the highest level. Consider outcomes: what could cause you to terminate the joint venture, and what is the preferred exit strategy.
Human Resources (HR) Strategy. Develop HR strategies that align and support the goals of the JV: develop a distinct identity and culture for the new organization; communicate aggressively to employees; and establish distinct career paths, management, and a means of return for employees transferred to the JV. Create compensation, incentive, and retention programs tied to the success of the JV. Maintain open communication between the HR departments of the parents and the JV.
Leadership. Define a process for leadership selection that’s seen as fair and credible, and name top-tier leadership as soon as possible. Look for key indicators of leadership potentials such as behavior, past experience, and measurable outputs.
Communication. To engage and motivate your employees, communication should be frequent and used to create a common vision, establish a connection with leadership, explain the new rules, support the individual transition process, aid in retention, and ultimately, define the new organization in terms of “We” instead of an “It” or “They”. Share as much information as you can, and never sugar-coat or make false promises.
Talent. Make the identification, retention, and motivation of the key talent a top priority. As times of uncertainty can lead to defections, take strong counter-measures to prevent them. Paying close attention to the specific skills, knowledge, and behavior that will be required to achieve the new organization’s business objectives, identify the key players in both the parent companies who will be needed during the transition to a joint venture organization and beyond. Be aware of which employees are most at risk for recruitment by other organizations and collect data on the causes and costs or turnover that might influence which employees to target and which retention practices to implement. Conduct employee research to help the new organization determine what matters to employees and can serve as the foundation for all programs and incentives.
Conclusion:
In short we can say that culture is more fluid than we might have expected. Whereas some elements remain solid, we can be thankful that culture is fluid, as its fluidity is what enables a society to grow and develop. It is a pity that academic disciplines like history do not focus more on a historical cultural studies, and that cross-cultural studies do not take a more group dynamic point of view rather than a individualistic perspective. The new leaders of tomorrow will not be those who can command well (after all culture cannot be ordered around) but those who can embrace, work with and form culture to its members’ advantage.
Moreover, Suzuki had gained the confidence, knowledge and know-how in such technology transfers; indeed many of the supervisors did not return to their previous jobs, but instead became part of a new technology transfer team who were subsequently involved in Suzuki’s Hungary plant project and later their China and North Korea plant projects. Some were even seconded to other Japanese automotive companies involved in similar international technology transfers.
General Motors also gained a lot from the project in terms of key Japanese manufacturing techniques. Contrary to the NUMNI experience with Toyota, since the CAMI project was a total technology transfer to Canadian managers and operators involving the whole plant system, the depth of knowledge gained by GM was quite profound. Indeed it later gradually formed the basis of a change in approach at GM in general.
Cite This Work
To export a reference to this article please select a referencing style below:
