Japan’s Top Management from the Inside

328 Pages·1998·31.375 MB·English

by  Makiko Yamada (auth.)

JAPAN'S TOP MANAGEMENT FROM THE INSIDE
STUDIES IN THE MODERN JAPANESE ECONOMY
General Editors: Malcolm Falkus, University of New England, Armidale,
New South Wales, Australia; and Kojiro Niino, Kobe University, Japan
An understanding of the modern Japanese economy remains both
important and elusive. Its importance needs little stressing. From the
1950s Japan's economy grew at a rate unparalleled elsewhere and,
despite recent setbacks, the economy remains strong and dynamic with
increasing investment overseas. Indeed, Japanese-owned companies now
produce more overseas than they do at home. Yet an understanding of
this economic performance is made difficult by the wide cultural divide
between Japanese and Western societies. On the one hand an
understanding of the many unique features of Japan's economic and
social life is essential if we are to appreciate the Japanese achievement,
but on the other hand this very uniqueness makes communication
difficult. Straightforward translations of Japanese works frequently mean
little to Western readers because the underlying attitudes and
assumptions are so unfamiliar.
This series has been planned in the belief that there is a need for
scholarly studies on the modern Japanese economy which are written by
experts (both Japanese and Western) and aimed at Western readers.
Accordingly, we have planned a series of books which will explore all
the major areas of Japanese economic life. The books will present up-to-
date material, and, where necessary, they will place Japan in its wider
international context.
Published titles include
Yujiro Hayami: JAPANESE AGRICULTURE UNDER SIEGE
Toru Iwami: JAPAN IN THE INTERNATIONAL FINANCIAL SYSTEM
Kazuo Koike: UNDERSTANDING INDUSTRIAL RELATIONS IN MODERN JAPAN
Ryoshin Minami: THE ECONOMIC DEVELOPMENT OF JAPAN (2nd edn)
Carl Mosk: COMPETITION AND COOPERATION IN JAPANESE LABOUR MARKETS
Mitsuaki Okabe (editor): THE STRUCTURE OF THE JAPANESE ECONOMY
Yoshitaka Suzuki: JAPANESE MANAGEMENT STRUCTURES, 1920-80
Toshiaki Tachibanaki: PUBLIC POLICIES AND THE JAPANESE ECONOMY:
SAVINGS, INVESTMENTS, UNEMPLOYMENT, INEQUALITY
Japan's Top
Management
from the Inside
Makiko Yamada
Director
YMI International
tt
First published in Great Britain 1998 by
MACMILLAN PRESS LTD
Houndmills. Basingstoke. Hampshire RG21 6XS and London
Companies and representatives throughout the world
A catalogue record for this book is available from the British Library.
ISBN 978-1-349-39794-5 978-0-230-37369-3 (eBook)
DOl 10.1057/9780230373693
First published in the United States of America 1998 by
ST. MARTIN'S PRESS, INC.,
Scholarly and Reference Division,
175 Fifth Avenue, New York, N.Y. 10010
Library of Congress Cataloging-in-Publication Data
Yamada, Makiko, 1938-
Japan.os top management from the inside I Makiko Yamada.
p. em.
Includes bibliographical references and index.
I. Industrial management- Japan. 2. Executives-Japan.
I. Title.
HD70.U5Y358 1998
658.4'2'0952-dc21 97-38371
CIP
© Makiko Yamada 1998
Softcover reprint of the hardcover 1st edition 1998 978-0-333-66044-7
All rights reserved. No reproduction, copy or transmission of this publication may be made
without written permission.
No paragraph of this publication may be reproduced. copied or transmitted save with
written permission or in accordance with the provisions of the Copyright, Designs and
Patents Act 1988, or under the terms of any licence permitting limited copying issued by
the Copyright Licensing Agency. 90 Totten ham Coun Road. London WI P 9HE.
Any person who does any unauthorised act in relation to this publication may be liable to
criminal prosecution and civil claims for damages.
The author has assened his right to be identified as the author of this work in accordance
with the Copyright, Designs and Patents Act 1988.
This book is printed on paper suitable for recycling and made from fully managed and
sustained forest sources.
10 9 8 7 6 5 4 3 2 I
07 06 05 04 03 02 01 00 99 98
To Sohei Nakayama

Contents
List of Figures and Tables ix
Acknowledgements xii
1 Introduction 1
2 The Structure of Management 17
2.1 Japan's top management 17
2.2 The myth of bottom-up decision-making 42
3 Human Resources 69
3.1 A brief history of postwar industrial
relations 69
3.2 How lifetime employment works 78
3.3 The dynamics of Japanese organisations 97
3.4 Why Japanese managements fail to invest
in female human capital 109
4 Japan's Capital Market: Carte Blanche from
the Shareholders 127
4.1 The lack of industrial finance after 1945 127
4.2 The immature securities market 143
4.3 The climate for financial scandals 159
5 Management Benchmarks 189
5.1 Cartelism and market leadership 189
5.2 The advance of new applied technologies 207
5.3 Globalisation and the world market 229
vu
viii Contents
6 Scenarios 249
6.1 High unemployment versus low
unemployment 249
6.2 Reorganisation of Japanese industry 262
6.3 Back to the future 284
Appendix: Interviewees, by Industry 291
Notes and References 299
Bibliography 305
Index 311
List of Figures and Tables
Figures
2.1 Age distribution of interviewees 23
2.2 Age on appointment to presidency 25
2.3 Age on appointment to chairmanship 25
2.4 Academic background of interviewees 27
2.5 Hierarchy of executives and directors
of the board 45
2.6 Delegation of board powers 48
2.7 Shitofumeikin (self-denial expenses) 60
3.1 Nikkeiren's organisational structure 76
3.2 Nikkeiren's secretariat structure 77
3.3 Working age population, 1965-2045 88
3.4 International comparison of labour
productivity 90
3.5 TEPCO's wage structure, 1990 94
3.6 TEPCO's wage system, 1978 95
3.7 An example of an informal group in a
Japanese organisation 104
3.8 Usual career path for male college
graduates 111
3.9 Majors taken at college, by sex, 1979 112
3.10 Changes in majors taken by female
four-year college students, 1980 113
3.11 Different career paths in Japanese
corporations, 1996 115
3.12 Usual career path for female college
graduates, 1982 116
3.13 Women's wages as a percentage of men's
wages, 1985-94 117
ix