Can Japanese management techniques be applied to American small business?

CAN JAPANESE MANAGEMENT TECHNIQUES BE APPLIED TO AMERICAN SMALL BUSINESS?

INTRODUCTION

In recent years Japanese management techniques have been very much in the limelight in the United States. Much has been written extolling the high productivity and efficiency of Japanese industry and the equally high quality of its products. The key to this success is said to be a unique Japanese form of management practice, involving methods very different from those used in the United States. Some authors argue that American managers would achieve similar success if they were to adopt these Japanese techniques in their own companies. Others contend that the Japanese corporate setting and its cultural environment are unique, and that techniques that work in Japan are not transferable to American companies. Furthemore, these discussions about tranferability virtually always focus on whether or not these Japanese practices can be applied in large American firms, with little thought being given to their applicability for small American businesses.

The various Japanese management techniques that have been so highly publicized in recent years are surveyed here, followed by an examination of the degree to which Japanese small businesses use these techniques, and an assessment of their possible value for American small businesses.

THE JAPANESE MODEL

The so-called "Japanese Management Style" is in fact a complex set of basic organizational properties common only to certain Japanese companies. Nevertheless, writers on the subject have attempted to break it down into a number of individual characteristics, so that it can be more easily studied and evaluated. Seven of these characteristics stand out as being in strong contrast with the typical "American Style" of management.

Lifetime Employment is perhaps the most publicized of Japanese business characteristics. Employees are hired directly upon graduation from high school or college, and are retained until a mandatory retirement age of fifty-five (this is waived for top-level managers). Employees are terminated before normal retirement age only under the most extreme of circumstances, such as criminal behavior. Upon retirement, an employee will receive a large severance payment, and may be placed (at a lower salary) in a position in a satellite firm of the company (a smaller supplier, for example). The effect of this policy is very high employee commitment to the company.