M. O. DEMINA

Graduate student

Far East Institute of the Russian Academy of Sciences

Keywords: Japan, specifics of Japanese management, "lifelong hiring", company missions, the role of traditions in Japanese entrepreneurship

The Japanese experience of personnel management attracted close attention of Western researchers from approximately the late 1970s to the mid-1990s, which coincided with the period of large-scale foreign expansion of Japanese capital. Japanese companies managed to gain a strong position in the US and UES markets in a short time. In this regard, the Western scientific literature has repeatedly raised questions about the reasons for the effectiveness of the Japanese management model, its sustainability, and the possibilities of transferring it abroad. And if the first works were mostly apologetic in nature, then in the late 1990s, after the "lost decade" for the Japanese economy, the scales swung in the other direction, and a series of monographs criticizing the Japanese approach to management was published.¹

Interest in this topic gradually began to fade. Nevertheless, it seems that regardless of the success of the development of the Japanese economy as a whole, the phenomenon of Japanese management still deserves attention and detailed consideration.

The main elements of Japanese management were identified as early as the 1970s: so-called lifetime hiring, superannuation pay increases, and branded (rather than industry-specific, as in the rest of the world) trade unions2. The lifetime hiring system assumes that new employees come to the company immediately after graduation from educational institutions and work there until their retirement.

It is not difficult to see that the first and second elements of Japanese management are complementary: "novices" are ready to work in one place even at a relatively low salary, expecting its planned increase in the future. Thus, the company has the opportunity to invest in improving the skills of its employees, and employees, in turn, invest in the development and prosperity of the organization. This is perhaps the main reason for the economic rationality of the Japanese HR management model.

IN KEEPING WITH THE Japanese MENTALITY

As a rule, foreign scientists explain the rather high stability of this model by its proximity to the Japanese mentality. The sociocultural prerequisites for the long-term success of Japanese management are the tendency of Japanese people to self-awareness through belonging to a group ³; historically determined paternalism ⁴; the high importance of Confucian values in Japanese society ⁵; and the specifics of the Buddhist worldview ⁶. All this is partially confirmed when considering the reasons why borrowed elements of Japanese management do not take root in foreign countries. ⁷

The current state of the Japanese economy and society has called into question the economic efficiency and sustainability of the traditional HR management model.

First, as a result of demographic changes, as well as restrictions on hiring during the economic depression, the share of older workers in labor collectives increased and the share of "newcomers" decreased, which increased the current cost of maintaining the labor force.

Second, the slowdown in productivity growth in both the manufacturing and non-manufacturing sectors of the Japanese economy since the early 1990s8 has meant that companies can no longer expect to significantly increase their profits in the future; consequently, increasing compensation for older workers is becoming increasingly difficult.

The research was carried out as part of the Individual Research Program of the HSE Faculty of World Economy and World Politics in 2015.

Third, with the development of information technologies, the qualifications acquired by an employee while working at the company quickly become outdated, and when mastering technological innovations, such an employee does not have a special advantage over the "newcomers"who have just been hired. Thus, companies ' investments in professional development of employees lose their long-term character, and another reason for the economic efficiency of the lifetime hiring system disappears.

Fourth, many Japanese corporations with long-term experience working abroad have begun to experiment with the use of Western approaches to personnel management, not only in foreign branches, but also in Japanese divisions.

Today, researchers of the Japanese management model have not come to a consensus about its future in the new environment: will it remain unchanged, will it be applied only to a limited number of employees, will it acquire new features or lose its significance as a result of gradual erosion?⁹

CHANGES TO THE TRADITIONAL HIRING SYSTEM

Observations show that certain changes are already taking place. First of all, they touched upon the remuneration system. Since the second half of the 1990s, many Japanese companies have begun to apply compensation to their employees not only for years of service, but also based on the results of ¹⁰ years of work (this component of wages is called seisekikyu).

At the first stage, employers faced difficulties in evaluating these results: in a Japanese enterprise, tasks are usually assigned to a specific team, rather than to an individual, and it was difficult to assess the contribution of each team member without first developing appropriate criteria. However, as they have gained experience in this area, some firms have managed to significantly change the ratio of the traditional salary components (age and qualifications) and the seisekikyu component in the direction of increasing the latter. For example, at Toyota, 70% of an employee's earnings depend on their performance ¹¹.

The number of components of a Japanese employee's salary now tends to decrease; the share of the age component (nanreikyu) decreases, or it is completely excluded from the calculation formula ¹²; more and more companies use various systems for evaluating employee performance (according to some estimates, their share in the total number of enterprises is about a third ¹³).

To reduce the cost of older labor, some companies offer their employees different career options after the age of 50. For example, Tokyo Gas gives you the opportunity to choose one of 6 tracks: early retirement and finding a new job; shortened working hours; standard retirement at age 60; a new contract with your company on more flexible terms upon reaching the age of 60; part-time work after 60; transfer to permanent work in subsidiaries divisions ¹⁴.

The gradual departure from the traditional principles of remuneration in Japanese enterprises is also confirmed by statistical data: it was expressed in a change in the ratio of monthly compensation to young and elderly employees.

This change is most significant for the traditional" core " of the lifetime employment system-employees with higher education. If in 1989-1990 university graduates who worked in large organizations of the production sector, by the age of 54, on average, received 5 times more than only employed employees of the same category, then in 2007-2008 this difference was already 3.8 times. In the non-manufacturing sector, the growth of salaries for employees with higher education turned out to be even more moderate as the length of service increased: according to data from 2007 to 2008, their average incomes, starting from the age of 40 and up to retirement age, fluctuated in approximately the same range with no significant upward trends ¹⁵.

Despite the obvious changes in remuneration practices, most Japanese companies declare their commitment to the system of lifelong employment: in a series of surveys conducted among representatives of Japanese companies in the early 2000s, more than 80% (!) of respondents said that they maintain the system of long-term employment ¹⁶.

Indeed, in the period from 1989 to 2008, the proportion of "lifelong hires" (meaning those who joined the company immediately after graduation and never changed their place of work) among former university graduates aged 45 to 54 years in large companies decreased slightly - from 54% to 48%. And in small and medium-sized enterprises, their share even slightly increased: 29% against 27%¹⁷. The figures confirm that Japanese companies prefer not to fire older employees and in this sense maintain the system of lifelong hiring.

Statistics for other age categories, however, show different trends. For example, the proportion of "lifetime employed" employees with higher education aged 25-34 years decreased from 61% to ⁴³% between the mid-1990s and 200818. This means that today's young Japanese people are more likely to change jobs than 10 years ago, leaving the same job.-

thus, beyond the lifetime employment system.

Professor at Hitotsubashi Dz University.Hamaaki and his colleagues provide several explanations for this fact. First, university graduates who got a job in the 2000s could not be completely loyal to their employers: on the one hand, they received relatively low salaries and could not expect their rapid increase, on the other-the prospect of compensating for their efforts in the future, as they move up the career ladder However , they seemed vague, since the older generation of employees will no longer receive super-high payments. Second, the decline in labor demand since the late 1990s has meant that a few vacancies do not meet the needs of graduates, so they have more incentive to change jobs when a good opportunity arises.¹⁹

The implementation of this scenario was made possible by changes in Japanese labor legislation: in 2004, it was officially allowed to use fixed-term employment contracts (for 3 years or less)for all specialties. ²⁰

COMPANY MISSIONS ARE PART OF THE CORPORATE CULTURE

For a long time, the key to the sustainability of the Japanese management model was considered to be a developed corporate culture based on traditional values. ²¹ Within the framework of the lifelong employment system, it is important for an employer, firstly, to maintain the loyalty of its employees for a long time; secondly, to create a favorable atmosphere in the team that prevents conflicts.

One of the tools used for this purpose is the so-called company missions. This document, which is not very widespread in Russia yet (but has long been widely used in business and not only in it in the West), contains a brief description of the company's activities, the principles of its corporate culture, the company's position in the competitive environment, the general goals of the company's development and the value orientations that employees should follow when making decisions. In fact, the mission acts as a kind of "reference point" when making managerial decisions. ²²

In Japan, most companies have carefully designed missions, and many are proud of the almost century-old history of their mottos. In Japanese, instead of the word "mission", the expressions "management philosophy" (keierinen), "management principles" (shase), or even "founder's spirit" (sogyoseishin) are often used, which emphasize not only the pragmatic, but also the ideological and philosophical orientation of such texts.

Do Japanese companies use traditional ideas to motivate their employees? Let's analyze the mission texts published on the Internet sites of the 100 largest companies according to Forbes magazine, which were included in the Global 2000 rating in 2013.23this sample is quite representative, since it includes companies of different profiles that focus on different target audiences.

10 best missions of Western companies (according to the magazine "Asia and Africa today").

IKEA - Change the everyday life of ordinary people for the better.

XEROX-Spreading knowledge through documents.

Kodak - We help the world create memories and make money.

Google - Organize information and make it universally accessible and useful.

Valio - To feel good.

Sony Corporation - We are a group of young people who are endowed with enough energy for an endless creative search.

The Ritz Carlton hotel chain is dedicated to providing maximum comfort to each client.

The Bank of New York - We strive to be recognized as a global leader and preferred partner, helping our clients succeed in a world of rapidly developing markets.

Harley Davidson - We make people's dreams come true, using our experience in creating the very best motorcycles.

Yandex - Help people solve problems and achieve goals in life.

The word "society" is most often used in missions: it appears in 66% of cases and, as a rule, is accompanied by the words: "respect", "service", "responsibility", "value".

The idea of the priority of society over the individual is embedded in the Japanese mentality: in all religious and philosophical systems of Japan - from Shinto to Confucianism-the value of society is emphasized and the need to maintain its integrity is justified, even to the detriment of personal interests. The repeated use of the word "society" in mission texts is a characteristic feature of modern Japanese companies. In some cases, this word takes on an almost philosophical sound. For example, the Fujifilm Group website contains the following wording: "... our mission... make a significant contribution to the realization of a society in which all people of the world can lead a life full of spiritual and material wealth, with a sense of self-fulfillment and satisfaction."²⁴

On the 2nd place in terms of frequency of references in the texts of missions of Japanese companies is "environment": this phrase occurs in 48% of cases. It is not surprising that the need to protect and preserve the environment is stated by firms that, in one way or another, are associated with damage to the environment: manufacturers of cars and automotive components, electronics and electrical engineering, etc.

In their missions, companies that are not directly related to environmental problems also mention the tasks of preserving the environment: insurance companies, wholesale and retail trade enterprises, organizations specializing in the sale of real estate. In these cases, such references probably reflect, on the one hand, the growing global concern about environmental issues*, and, on the other, appeal to traditional Japanese ideas about the indissoluble connection between man and nature.

The term "environment "is often mentioned together with the word" harmony " when it comes to the need for harmonious coexistence of nature and society. For example, in the corporate philosophy of the construction company Sekisui House, one can find the following wording: "We aim to create greater harmony between individuals, communities and the environment"²⁵. The word "harmony" is present in the mission texts of 27% of the Japanese companies surveyed.

15% of the missions contain references to the long history of the company, with an emphasis on traditions that are passed down from generation to generation. Indeed, many companies with a history of more than 100 years are still successfully operating in Japan. The extent to which modern firms are direct heirs of the large industrial concerns of the past is quite controversial; however, such continuity (even if formal) is considered a cause for pride.

Mission texts often include the name of the company's founder; sometimes even his biography is given, and some managers emphasize that the basic corporate principles have not changed throughout the entire existence of the enterprise. In particular, Itochu universal trading company reports on its website: "The values of Itochu-vision, honesty, diversity, passion, challenge-have not changed since our company was founded more than 150 years ago" ²⁶.

Assurances of commitment to tradition can perhaps be considered another distinctive feature of the missions of Japanese companies. While Western management theorists and practitioners adhere to the thesis that it is necessary to constantly review and transform the texts of business principles, taking into account the changing competitive environment, ²⁷ Japanese managers strive to emphasize the unchanging nature of corporate philosophy.

Other ways of referring to tradition can be found in mission texts. For example, 11 of the companies we surveyed use the word "way", which refers to the metaphysical "way of the warrior" or even to the even more ancient "way of the gods"**: JT Group Way, Komatsu Way, etc. In addition, 5 firms use the word "heart" as an abstract category, recalling the teaching of understanding the heart (sekimon shingaku) by the famous Japanese philosopher of the Tokugawa era Ishida Baigan (1684-1744).

A distinctive feature of this teaching is the elevation of thrift to the rank of a basic virtue, especially in commercial activities.²⁸ An example of such usage can be found in the business philosophy of the construction company Daiwa House Industry, which deals with the values of the "endless heart²⁹. Finally, 3 companies inform interested parties about their Japanese origin, putting Japanese words in the text of their missions, however, in English transcription ³⁰.

* * *

Most of the Japanese companies in the Forbes ranking (and almost all of the top ones) do not pay much attention to traditional values when identifying themselves. Even among firms focused on the domestic market, cases of appeal to the national tradition can be considered an exception, rather than the rule. A significant part of employers - consciously or unconsciously-position their companies as modern, international, universal, giving freedom to their employees.

Researcher Wang Ying Yang from Hiroshima State University proves that Japanese employees tend to identify with the values that are included in corporate missions31-thus, these texts help regulate the psychological climate in the team, set a certain type of relationship between employees and management.

* * *

So, the current realities of the Japanese economy and public life represent

* Moreover, some Japanese trading companies work closely with the industrial sector and even have subsidiaries of the production profile (author's note).

* * The name of the native Japanese religion of Shinto can be translated as " the way of the gods "(author's note).

a number of serious challenges for the traditional management model. In order to adapt to these challenges, Japanese companies are first of all transforming the remuneration system by introducing new practices for calculating the amount of compensation (in particular, taking into account the employee performance component). Young professionals, seeing signs of the erosion of the superannuation system, tend to get higher salaries at an early stage. In addition, being focused on the realization of their creative and professional potential, they are ready to change their place of work. Inter-firm mobility was facilitated with the introduction of fixed-term employment contracts for 3 years or less.

Thus, a smaller proportion of young employees are currently covered by the lifetime employment system than in the early 1990s. Employers themselves do not seek to demonstrate their commitment to traditional values and rarely use national philosophical concepts to strengthen corporate culture. The cult of traditional missions is gradually losing its importance. Even very good missions do little to help increase labor productivity and innovative trends in the economy, gradually turning into an interesting, but not always useful tradition, risking becoming a kind of "museum exhibit" over time, nothing more.

^{Smith P.} 1 Japan: A Reinterpretation. New York: Pantheon Books. 1997; Yoshimura N., Anderson O. Inside Kaisha: Demystifying Japanese Business Behavior. Boston: Harvard Business School Press. 1997; Crawford R.J. Reinterpreting the Japanese Economic Miracle. Cambridge: Harvard. 1988.

² См., напр.: The Development of Industrial Systems: Some Implications of the Japanese Experience. Organization for Economic Cooperation and Development (OECD). Paris. 1977.

^{Ketcham R.} 3 Individualism and Public Life. Oxford: Blackwell. 1987.

^{Ouchi W.G., Jaeger A.M.} 4 Type Z Organization: Stability in the Midst of Mobility // Academy of Management Review. 1978. Vol. 3, N 2, p. 305 - 314; Murakami Y. The Society as a Pattern of Civilization // Journal of Japanese Studies. 1984. 10(2), p. 281 - 363.

^{Hofstede G., Bond M.H.} 5 The Confucius Connection: From Cultural Roots to Economic Growth // Organizational Dynamics. 1988. Vol. 16, N 4, p. 5 - 21.

^{Pascale R.T.} 6 Zen and the Art of Management // McKinsey Quarterly. 1979. N 2, p. 19 - 35; Inoue S. Putting Buddhism to Work: A New Approach to Management and Business. Tokyo: Kodansha International. 1997.

⁷ См., например: Ishida H. Transferability of Japanese Human Resource Management Abroad // Human Resource Management. 1986. Vol. 25, N 1, p. 103 - 120.

^{Fukao K.} 8 Explaining Japan's Unproductive Two Decades // Asian Economic Policy Review. 2013. Vol. 8, N 2, p. 195 - 198.

⁹ Some estimates are given, see: Timonina I. L. Predprinimatel'skaya struktura i korporativnoe upravlenie v Yapanii [Entrepreneurial structure and corporate governance in Japan]. Predprinimatelskaya struktura... v Yaponii // Yaponiya: opyt modernizatsii. M) (in Russian); Lebedeva I. P. Destinies of lifelong hiring: social aspects // Japanese society: changing and unchanging. Moscow, AIRO-XXI. 2014. (Lebedeva I. P. 2014. Sudby pozhiznennogo naima: sotsialnye aspekty // Yaponskoe obshchestvo... M.) (in Russian); Clegg S., Kono T. Trends in Japanese Management: An Overview of Embedded Continuities and Disembedded Discontinuities // Asia Pacific Journal of Management. 2002. Vol. 19, p. 269 - 285; Hamaaki J., Hori M., Maeda S., Murata K. Changes in the Japanese Employment System in the Two Lost Decades // Industrial & Labor Relations Review. 2012. Vol. 65, N 4, p. 810 - 846.

^{Conrad H.} 10 From Seniority to Performance Principle:

The Evolution of Pay Practices in Japanese Firms since the 1990s // Social Science Japan Journal. 2010. Vol. 13, N 1, p. 116.

^{Clegg S., Kono T.} 11 Op. cit., p. 281.

^{Conrad H.} 12 Op. cit., p. 121.

^{Nakamura K.} 13 Seikashugi no jijitsu (Facts about pay by results). Tokyo: Touyou Keizai Shinpousha. 2006.

^{Clegg S., Kono T.} 14 Op. cit., p. 280 - 281.

^{Hamaaki J., Hon M., Maeda S., Murata K.} 15 Op. cit., p. 825.

^{Lebedeva I. P.} 16 Decree. soch., p. 241.

^{Hamaaki J., Hori M., Maeda S., Murata K.} 17 Op. cit., p. 832.

¹⁸ Ibidem.

¹⁹ Ibid., p. 840 - 841.

²⁰ Roudou kijunhou (Labor Standards Act)- http://law.e-gov.go.jp/htmldata/S22/S22HO049.html#50000...

^{Picken S.} 21 Values and Value Related Strategies in Japanese Corporate Culture // Journal of Business Ethics. 1987. Vol. 6, N 2, p. 137 - 143.

^{Mescon M. H., Albert M., Hedouri F.} 22 Osnovy menedzhmenta [Fundamentals of management]. 1998. pp. 288-289.

²³ Global 2000: Japan's Largest Companies - http://www.economywatch.com/companies/forbes-list/iapan.html

²⁴ Fujifilm Holdings Corporation, Fujifilm Group Corporate Philosophy - http://www.fujifilmholdings.com/en/about/philosophy/index.html

²⁵ Sekisui House, Corporate Philosophy http://www.sekisuihouse.co.jp/english/info/philosophy.html

²⁶ ITOCHU Mission - http://www.itochu.co.jp/en/about/mission/

²⁷ См., напр.: King D.L., Case C.J., Premo K.M. Current Mission Statement Emphasis: Be Ethical and Go Global // Academy of Strategic Management Journal. 2010. 9(2), p. 73 - 89.

²⁸ For more details, see: Karelova L. B. The teaching of Ishida Baigan on the comprehension of the "heart"and the formation of labor ethics in Japan. 2007.

²⁹ The Daiwa House Group's Business Philosophy -http://www.daiwahouse.com/English/about/csr/

³⁰ Canon's Corporate Philosophy - http://www.canon.com/corporate/vision/philosophy.html

^{Wang Y.} 31 Mission-Driven Organizations in Japan: Management Philosophy and Individual Outcomes // Journal of Business Ethics. 2011. Vol. 101, p. 111 - 126.

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