Industry at the Crossroads by Robert E. Cole

Author:Robert E. Cole
Language: eng
Format: epub
Publisher: University of Michigan Center for South and Southeast Asian Studies
Published: 1982-01-15T00:00:00+00:00

A management system that challenges workers to perform and provides the necessary support while raising the social consequences of failure seems to be socially rewarding for the workers as well as competitively successful for the firm. The Japanese system may tap 15 to 20 percent of the typical worker’s potential as a member of the organization; the U. S. approach gains at best 5 to 10 percent of that potential. The success of Japanese producers of automobiles and other products and the experience of Japanese-managed plants in this country suggest that the philosophy and practices depicted in Table 1 constitute a new “one-best-way” in work force management.

The importance of the Japanese work force management system to the competitive strengths of their industry was brought into focus again and again throughout the trip. In instance after instance, we talked with senior executive about barriers to foreign competitive challenges. For example, we asked if industry in Korea or Taiwan might some day mount a challenge from their lower-cost industrial base much as the Japanese firms had challenged U. S. markets. The answer was almost always the same:” We believe that the special skills of Japanese workers and the particular ability they have to handle complex technological productivity will provide the needed competitive barriers to entry.” One senior Japanese manager made the point in a very personal way.” As an individual you may be smarter than I am; but once I begin to work within my organization with my fellow workers, I am unbeatable.” We concur that the Japanese approach to work force organization is indeed effective.

Yet it is important to realize that the Japanese auto producers have not discovered the manufacturer’s Nirvana. The specific practices and policies through which these seven basic principles have been implemented assume social, economic, and technological stability. The future, however, may well be much less stable in these respects than the past has been. The work force in Japan is aging substantially, and expectations are rising as the levels of education and living standards rise. At the same time, it is unlikely that the auto producers can sustain the kind of growth they have experienced in recent years. The future may include growing social demands coupled with fluctuations in demand that will place strains on current practices. The relative prices of oil and gas may also rise, creating incentives for substantial changes in product technology. The technological environment may grow increasingly fluid and uncertain, creating the need for marked changes in processes and methods. The Japanese executives we spoke with are aware of these problems and view them—and the competitive actions which grow out of them-—as a major challenge for the future.

III. Conclusions

At the beginning of this report, we quoted Taiichi Ohno, the architect of Toyota’s production system. He drew an analogy between Toyota’s approach to production and the early policies that Henry Ford followed in creating the U. S. auto industry at the turn of the century. The analogy is perceptive; it shows an understanding of the relationship among inventory, precision, and productivity not shared by most U.

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