MANAGERIAL CONCEPTS &

PRACTICES OF JAPANESE
MANAGEMENT
SUBMITTED BY- SRIJON MOITRA,
ROLL NO-17023
BATCH-(2017-2019)

COURSE NAME- INTERNATIONAL MANAGEMENT

SUBMITTED TO
Professor Shekhar Chaudhuri,
Professor Samir Ranjan Chatterjee &
Professor. Dr. kankana Mukhopadhyay
CONTENTS PAGE NUMBER
INTRODUCTION 02
WHAT CONSTITUTED JAPANESE MANAGEMENT 02
HISTORY OF JAPANESE MANAGEMENT 02-03
STORY OF JAPANESE MANAGEMENT 03-04
JAPANESE MANAGEMENT CONCEPTS 04
 CONTINOUS IMPROVEMENT (KAIZEN) 05-06
 LEAN PRODUCTION/MANUFACTURING 06-07
 TOTAL QUALITY MANAGEMENT 08-09
 SMED (SINGLE MINUTE EXCHANGE OF DIE) 09
 5’S FRAMEWORK &
3M’S OF JAPANESE TECHNIQUE 09-11
 JUST IN TIME (JIT) 11-12
OTHER MANAGEMENT TECHNIQUES 12-13
CONCLUSION 14
REFERENCES 15

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INTRODUCTION

Japan... Nippon... The Land of the Rising Sun....

Japan has consistently maintained its position as one of the world's top economies and
technological innovators, and in recent decades has built up an extensive network of
interconnections with other economic regions and business interests, including Asia, Europe
and the Americas. This experience has helped to build a mature democratic society enjoying
widespread affluence.

Japan's leading companies in fields such as automobiles and electronics originally introduced
management methodology and technology from western sources. Here these elements were
re-combined, molded and refined into locally appropriate models that then provided
inspirational perspectives for business models around the world.

WHAT CONSTITUTED JAPANESE MANAGEMENT?

How this Japanese Management has evolved? What is its relationship with societal
values?
Numerous books and articles have been written on the Japanese management systems.
Abegglen (1958) was one of the first to bring Japanese management to the attention of a
large Western audience, and was followed by Yoshino (1968), Cole (1971) and Dore (1973)
who, through in-depth case descriptions, laid the groundwork for the avalanche of writings
to follow. These classic studies identified and described those crucial differences in
management style and practice that were identified in later studies as critical to Japanese
success.

HISTORY OF JAPANESE MANAGEMENT

 Japan’s culture developed late in Asian terms and was much influenced by China and
later the west.
 Early in Japan’s history, society was controlled by ruling elite of powerful clans.
 The most powerful emerged as a kingly line and later as the imperial family in Yamato
modern Nara Prefecture or possibly in Kyushu in the third century A.D.

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 Japan rebuilt itself based on a new and earnest desire for peaceful development,
becoming an economic superpower in 2nd half of the 20th century.

STORY OF JAPANESE MANAGEMENT

 The culture of Japanese Management is very famous in the west.

 Flagships of the Japanese economy provide their workers with excellent salaries and
working conditions and secure employment.
 One of the prominent features of Japanese Management is the practice of permanent
employment (Shushin Koyo).
 Permanent employment covers the minority of the workforce that work for the major
companies.
 Management Trainees, traditionally nearly all of whom were men, are recruited
directly from colleges when they graduate in the late winter.
 If they survive a six-month probationary period with the company, are expected to
stay with the companies for their working careers.
 Employees are not dismissed thereafter on any grounds, except for specific breaches
of ethics.
 Permanent employees are hired as generalists, not as specialists for specific positions.
 A new worker is not hired because of any special skill or experience, rather the
individual’s intelligence, educational background, and personal attitudes and
attributes are closely examined.
 On entering a Japanese corporation, the new employee will train from six to twelve
months in each of the firm’s major offices or divisions.
 Thus, within a few years a young employee will know every facet of company
operations, knowledge which allows companies to be more productive.
 Another unique aspect of Japanese Management is the system of promotion and
reward.
 An important criterion is Seniority.
 Seniority is determined by the year an employee’s class enters the company.
 Regular pay is often augmented by generous semiannual bonuses.
 Members of the same graduating class usually start with similar salaries, and salary
increases and promotions each year are generally uniform.

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 The purpose is to maintain harmony and avoid stress & jealousy within the group.
 During the latter part of the worker’s careers, another weeding takes place, as only
the best workers are selected for accelerated advancement into upper management.
 The ranking officer of a company has the responsibility of maintaining harmony so
that employee can work together.

Effective superordinate goals such as significant, durable, achievable.

JAPANESE MANAGEMENT CONCEPTS

The Japanese economy was totally devastated after the World War II. The country's
turnaround strategy to revive its economy was largely influenced by the Management
Philosophy that emerged in Japan. The strong pillars of Japanese Management are Concern
for Customers to the extent of putting him on the pedestal of God, Control of the Access of
Cost, Quality and Time (Wastage elimination, JIT, TQM, TPM, DOE, Poka Yoke, Kamban, SMED
etc.), Excellence in all areas (5-S, Kaizen, Poka Yoke) and Total Employee Involvement.
Underlying principle embedded in all these is recognition of the need to satisfy all
stakeholders. These Management Principles developed in Japan are gaining wide currency all
over the world, and practiced by industry, business and governments because of the
enormous power of these concepts that can make any organization highly successful.

KEY TERMS IN JAPANESE MANAGEMENT

Kaizen
(Continuous Improvement)

Lean
Production
Just-In-Time (JIT)

Techniques/ Key terms

In Japanese
Management

Total Quality
Management
5S (TQM)

SMED
3M (Single Minute Exchange Of
Die)

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A. CONTINUOUS IMPROVEMENT (KAIZEN)
The Japanese refer to continuous improvement as kaizen (pronounced ky'zen). To the
Japanese, kaizen means to strive relentlessly to increase quality, efficiency and effectiveness
in all areas of life including personal, family, social, and work. The kaizen method of
continuous incremental improvements is an originally Japanese management concept for
incremental (gradual, continuous) change (improvement). K. is actually a way of life
philosophy, assuming that every aspect of our life deserves to be constantly improved. The
Kaizen philosophy lies behind many Japanese management concepts such as Total Quality
Control, Quality Control Circles, small group activities, labor relations. Key elements of Kaizen
are quality, effort, involvement of all employees, willingness to change, and communication.
Japanese companies distinguish between innovation (radical) and Kaizen (continuous). K.
means literally: change (Kai) to become good (zen).

The foundation of the Kaizen method consists of 5 founding elements:

1. teamwork,
2. personal discipline,
3. improved morale,
4. quality circles, and
5. Suggestions for improvement.

Out of this foundation three key factors in K. arise:

- Elimination of waste (Muda) and inefficiency
- the Kaizen 5S framework for good housekeeping
1. Seiri – tidiness
2. Seiton – orderliness
3. Seiso – cleanliness
4. Seikestsu – standardized clean-up
5. Shitsuke – discipline
- Standardization.

The continuous improvement approach is illustrated by the Shewhart-Deming plan-do-check

or study-action (PDCA or PDSA) cycle.

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Some of the statistical tools used in the continuous
improvement cycle include: 1. Pareto diagrams, 2.
Fishbone, or cause and effect diagrams, 3.
Histograms, 4. Other graphs and charts, e.g., pie
charts, 5. Control charts and 6. Scatter diagrams and
related techniques. For e.g. Regression and
Correlation Analysis.

Companies that implement Kaizen strategy:

 Reliance Industries Limited, Patalganga. (Textile, Petroleum)

 Tata Power, All Plants (Electricity Generation and Distribution)
 Mahindra and Mahindra Ltd, Igatpuri, Nashik, Nagpur. (Farm Equipment)
 Cummins India Ltd, Pune. (Heavy Engineering, Diesel Engines, Generators)
 Electronica Machine Tools Ltd, Pune. (Electronic Machine Tools)
 ABC NISSAN Motor Co. Ltd (Automotive Industry)
 MEPZA, Mauritius (Service Industry, Special Economic Zone)

B. LEAN PRODUCTION/ MANUFACTURING

Lean is about doing more with less: less time, inventory, space, labor, and money. "Lean
manufacturing", shorthand for a commitment to eliminating waste, simplifying procedures
and speeding up production. The idea is to pull inventory through based on customer
demand.

Lean Manufacturing (also known as the Toyota Production System) is, in its most basic form,
the systematic elimination of waste – overproduction, waiting, transportation, inventory,
motion, over-processing, defective units – and the implementation of the concepts of
continuous flow and customer pull. Five areas drive lean manufacturing/production:

 Cost
 Quality
 Delivery
 Safety, and

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 Morale

LEAN PRODUCTION OVERVIEW

 Non-value added activities or waste are eliminated through continuous improvement

efforts
 Focus on continuous improvement of processes - rather than results - of the entire value
chain
 The lean manufacturing mindset: concept, way of thinking - not techniques; culture -
not the latest management tool
 Continuous product flow is achieved through physical rearrangement and system
structure & control mechanisms
 Single-piece flow / small lot production: achieved through equipment set up time
reduction; attention to machine maintenance; and orderly, clean work place
 Pull reduction / Just-in-time inventory control

STRATEGY OF LEAN PRODUCTION

 Lean customer relationships

 Lean product development
 Lean manufacturing/order fulfillment
 Lean supply chain

Companies using Lean Production/

Manufacturing:

 Toyota Production System

 Canon Production System
 IBM
 Epson
 Pentel

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C. TOTAL QUALITY MANAGEMENT (TQM)

TQM, also known as Total Quality Control (TQC), is a management tool for improving total
performance. TQC means organized Kaizen activities involving everyone in a company –
managers and workers – in a totally systemic and integrated effort toward improving
performance at every level. It is to lead to increased customer satisfaction through satisfying
such corporate cross-functional goals as quality, cost, scheduling, manpower development,
and new product development.

According to the Japan Industrial Standards, "implementing quality control effectively

necessitates the cooperation of all people in the company, including top management,
managers, supervisors, and workers in all areas of corporate activities such as market
research and development, product planning, design, preparation for production, purchasing,
vendor management, manufacturing, inspection, sales and after-sale services, as well as
financial control, personnel administration, and training & education. Quality control carried
out in this manner is called company-wide quality control or total quality control (TQC)."

Quality control in Japan deals with quality of people. It is the fundamental concept of the
Kaizen-style TQC. Building quality into its people brings a company a half-way towards
producing quality products.

SEVEN MAIN FEATURES OF THE TQC MOVEMENT IN JAPAN

1. Company-wide TQC, involving all employees, organization, hardware, and software.

2. Education and Training, emphasis for top management, middle management and
workers.
3. Quality control (QC) circle activities by small groups of volunteers
4. TQC audits
5. Application of statistical methods
6. Constant revision and upgrading of standards
7. Nation-wide TQC promotion

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AREAS TARGETED BY TQM IN JAPAN

 Quality assurance
 New product development
 Education and training
 Organizational/ systems development
 Cross-functional management
 Policy deployment
 Quality deployment
 Supply management
 Meeting production quotas
 Meeting delivery schedules
 Marketing
 Sales

D. SMED (SINGLE MINUTE EXCHANGE OF DIE)

literally, changing a die on a forming or stamping machine in a minute or less; broadly, the
ability to perform any setup activity in a minute or less of machine or process downtime; the
key to doing this is frequently the capability to convert internal setup time to external setup
time; variations on SMED include:

 Single-digit setup – performing a setup activity in a single-digit number of minutes,

i.e. fewer than ten.

 One touch exchange of die (OTED) – literally, changing a die with one physical motion
such as pushing a button; broadly, an extremely simple procedure for performing a setup
activity.

E. 5S FRAMEWORK, 3M’S OF JAPANESE TECHNIQUE

Japanese 5s framework

5 S is a very popular concept in Japanese companies. 5S'' is a tool with Japanese roots, focused
on fostering and sustaining high quality house keeping. ''5S'' is the beginning of a productive

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life for everyone, and is fundamental to productivity improvement. '5S' is a time tested and
proven approach (in fact a stepping stone) to achieving World Class status. The 1st S stands
for Seiri (sorting), 2nd S Seiton (arranging), 3rd S Seiso (cleaning), 4th S Seiketsu
(maintaining) and the 5th S Shitsuke (self discipline).

 Seiri: tidiness, organization. Refers to the practice of sorting through all the tools,
materials, etc., in the work area and keeping only essential items. Everything else is stored or
discarded. This leads to fewer hazards and less clutter to interfere with productive work.
 Seiton: orderliness. Focuses on the need for an orderly workplace. Tools, equipment,
and materials must be systematically arranged for the easiest and most efficient access. There
must be a place for everything, and everything must be in its place.
 Seiso: cleanliness. Indicate the need to keep the workplace clean as well as neat.
Cleaning in Japanese companies is a daily activity. At the end of each shift, the work area is
cleaned up and everything is restored to its place.
 Seiketsu: standards. Allows for control and consistency. Basic housekeeping standards
apply everywhere in the facility. Everyone knows exactly what his or her responsibilities are.
House keeping duties are part of regular work routines.
 Shitsuke: sustaining discipline. Refers to maintaining standards and keeping the
facility in safe and efficient order day after day, year after year.

3M’S OF JAPANESE

In Japanese Language 3M is associated with reducing

wastage and lowering of load due to inconsistency. The
terminology commonly used by the Japanese has the
following meaning:

 Muda (waste) – activities and results to be

eliminated; within manufacturing, categories of waste,
according to Shigeo Shingo, include:
 Overproduction – excess production and early
production
 Waiting – waste time spent at the machine; delays

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 Transportation – waste involved in the movement and transportation of units
 Processing – waste in processing; poor process design
 Inventory – waste in taking inventory
 Motion – actions of people or machinery that do not add value to the product
 Defective units – production of an item that is scrapped or required to rework
 Mura – inconsistency
 Muri – unreasonableness

F. JUST-IN-TIME (JIT)

Just-In-Time is a process broadly aimed at increasing value-added and eliminating waste; a

production scheduling and inventory control technique that calls for any item needed at a
production operation - whether raw material, finished item, or anything in between, to be
produced and available precisely when needed, neither a moment earlier nor a moment later.
JIT was designed at Toyota specifically to cut waste in production.

JIT can be developed by considering the main elements that are attributed to successful JIT
systems. These elements can be separated into two broad categories including attitude and
practice. While the elements of attitude can be adopted by any organization, the elements of
practice are mainly applicable to companies involved in repetitive manufacturing. From an
accounting viewpoint, these are companies that would normally use the process cost
accumulation method.

A JIT system requires an attitude that places emphasis on the following:

 Cooperation with a value chain perspective

 Respect for people at all levels
 Quality at the source
 Simplification or just enough resources
 Continuous Improvement and a Long Term Perspective

A JIT system also incorporates the following practices:

 Just-in-time purchasing

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 Focused factories
 Cellular manufacturing
 Just-In-Time production
 Just-In-Time Distribution

 Simplified accounting and process oriented performance measurements

Components of JIT

 Production Leveling
 Pull System
 Kamban (label or signboard) system
 Good Housekeeping
 Small Lot Production
 Setup Time Reduction
 Total Preventive Maintenance (TPM)
 Total Quality Control (TQC)
 JIT Purchasing
 Line Balancing
 Flexible Manufacturing
 Small-group Activities (SGA)

These above mentioned techniques of Japanese management are the strong pillars of one or
many Japanese companies in Japan and worldwide. There are some other terminologies of
Japanese management which is to be taken into account.

G. OTHER MANAGEMENT TECHNIQUE

JIDOKA

Jidoka (automation) is a framework of quality assurance. It recognizes the disruption and

costs caused by defective units flowing on to subsequent processes and thus provides for an
autonomous status to defect control. This means that every worker is vigilant about quality
and has an autonomous power to stop the whole assembly line if necessary to prevent a

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defective unit flowing into good production. It supports JIT by never allowing a defective unit
to go on to a subsequent process.

SHOJINKA

Continually optimizing the number of workers in a work center to meet the type and volume
of demand imposed on the work center; shojinka requires workers trained in multiple
disciplines; work center layout, such as U-shaped or circular, that supports a variable number
of workers performing the tasks in the layout; the capability to vary the manufacturing
process as appropriate to fit the demand profile.

SOIKUFU

Soikufu (creative thinking) is a framework for harnessing the creative abilities of employees
and recognition of the fact that no one appreciates a task better than the person who
performs it day in day out. Through implementations such as Quality Circles and Suggestion
Schemes, employees are encouraged to continuously think about improvement. Soikufu,
thus, is an integral part of the overall Kaizen framework.

SEIBAN

The name of a Japanese management practice taken from the Japanese words "sei", which
means manufacturing, and "ban", which means number. A Seiban number is assigned to all
parts, materials, and purchase orders associated with a particular customer job, or with a
project, or anything else. This enables a manufacturer to track everything related with a
particular product, project, or customer. It also facilitates setting aside inventory for specific
projects or priorities.

POKA-YOKE

This is a defect warning system.

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CONCLUSION
Japan is now at a crossroads between holding fast to the benefits of long-established
structures without changing and be left behind by the rest of the world, or building a society
based on sustainable market principles to achieve growth and development. Since the end of
the Second World War, Japan has experienced the reconstruction era, the period of high
economic growth, and the bubble economy and its collapse, and it is now facing the issue of
structural reform toward a new socioeconomic system. It is the role of corporate executives
to identify new value and provide customers with better products and better services through
their management techniques, as well as to aim at highly efficient management.

From the 1990s, however, Japanese corporate management has bounced back and forth
between the Japanese style and the global standard, which might more appropriately be
called the American way. Amid the ongoing globalization, response to global environmental
problems, the declining birthrate and the aging of society, and diverse other changes in the
times and our surroundings, the time has come to pursue a new way of Japanese
management as the ideal form for Japanese corporations, which constitute the core of our
market-oriented economy and society.

The major strength of the Japanese approach is the recognition of human creativity. As Taiichi
Ohno, who pioneered the Toyota Production System said:

"Manpower is something that is beyond measurement. Capabilities can be extended

indefinitely when everybody begins to think".

Cost aware and creative employees, just-in-time production, autonomous quality assurance
and an in-built flexibility in the process layout and employee skills, are dominant features of
the Japanese management approach which creates a cost aware and quality conscious culture
across the organization. It has a flexible outlook, encourages improvement and invests in
training multi-skilled employees. Japanese management practitioners are arguably better
equipped and well suited to face the open-ended challenges of rapidly changing technology
and increasing global competition.

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REFERENCES
WEBSITES

 Jagolino. V () Techniques of Japanese Management, Available at:

https://www.slideshare.net/francispauljagolino/techniques-of-japanese-management
(Accessed: 7th December 2018).

BOOKS

 Chand. S (2013) '11 Most Important Features of Japanese Management', , 6th March, p. 11-12.

 Drucker. P.F (1971) 'Decision Making', What We Can Learn From Japanese
Management, 2(10), pp. 3-6.
 Xiang. Z (1997) The Japanese Management system, 1st edn., U.K: Penguin.

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