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PRESENTATION ON CASE

ANALYSIS

PRESENTED BY:

NIDHI SINGH

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Overview

The contrasts in culture and management style Germanand Japanese employees of such firms encounter dailyin their experiences on the job.

Dusseldorf area, the region of Germany with thehighest concentration of Japanese business, and, afterLondon, the leading center of Japanese corporateactivity in Europe.

45% of the German-resident Japanese population livesin North Rhine Westphalia, with almost 8,000 inDusseldorf alone.

a series of qualitative interviews were conducted withJapanese managers, German managers, works council

members, and labor leaders in the Dusseldorf area.

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Overview

In all such interviews, focus was on the impressions anddetails on the relations between Japanese company officialsand their German employees.

How sociocultural differences combine with organizational

styles to complicate the working relationships betweenJapanese and German employees.

German economic organization, corporate structure, andmanagement practice bear strong resemblance to patterns inJapan. Yet in other respects, the Germans and the Japanese

seem poles apart. How these similarities and differences shape the relations

between German and Japanese employees within theJapanese-owned company and, consequently, its success andviability is the case all about.

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Strengths German economic organization, corporate structure, and

management practice bear strong resemblance Japanese Dusseldorf enclave, provides all the services,

facilities, and social support

Japanese value deep and lasting relationships in business.

Formal structure of the Japanese firms is the standard rankingsystem that precisely situates employees in a vertical statushierarchy.

Japanese are well known for loyalty to one company, withinthe organization they are in perpetual motion, changing jobs,

departments, and locations as the company requires. A German worker can do anything provided he has a

checklist. The Japanese say they can do anything without thebook. The advantage of the Japanese approach is that, if aproblem comes up that is not in the book, the Japanese will

try to do something.

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STRENGTHS

.

Japanese approach of setting targets

and encouraging people to find their

own paths to achieving

The Japanese virtue of patience ,working late

Average Japanese employee puts in 2,150 hours

per year, Americans work around 1,950 hours,German takes at 1,600 hours a year.

Japanese tendency to give up vacation time

for the sake of the firm, Germans take their

paid holidays for granted

The Japanese workplace traditions of shop-floor participation and

long-term employment are often welcomed by blue-collar workers

who find in these policies a sense of security and partnership

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Strengths

Japanese companies give you more time to

learn things; you can make mistakes in

Japanese companies and they have more

patience with you; and they seem more

concerned about their workers here.

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Weaknesses The problem of English. All university-educated Japanese

have substantial English training but highly uneven practicalproficiency.

(We dont always get enough information from the Japanesestaff about how to do our job; instructions are often written

in English which most of our workers cant read). The Japanese are famous for taking politeness to extremes.

Moreover, a distinct offshoot of the Japanese politenesssyndrome that time and again confuses foreigners.

Japanese are resistant to forming them with outsiders.

The supremacy of Japanese methods and the caliber ofJapanese personnel, they often bore a superior-to-thou air.

Such snobbery fueled the reluctance of Japanese rotating

managers to share responsibility with local staff and involvethem in decisions.

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Weaknesses

The Japanese taste for lengthy face-to-face discussionand painstaking consensus building figures centrallyhere. Such practices sometimes have inadvertent effectof excluding outsiders.

Japanese companies, though tightly structured in theirown way, lack many stock features of Western formalorganization.

Employees are hired as generalists, not specialists, andthe jobs through which they migrate have shiftingboundaries.

The reluctance of Japanese managers to conduct directappraisals of foreign employees, denying the local staffclear signals of the companys expectations for

performance and reward.

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Weaknesses Workers also complained that the Japanese kept their

distance from workers and the works councils and thatthey were less able or willing to talk openly aboutproblems.

Union leaders cited the following problems faced byworkers in Japanese transplants: Managers pushadditional working hours on employees without extracompensation;

tariffs (wage agreements) are sometimes violated byassigning a lower classification than an employees jobjustifies; not all issues that the laws require are takenbefore the works council.

The union officials noted, however, that German

employers engaged in similar actions.

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Opportunities Japanese overseas subsidiaries stays longer in place, the greater

the independence from the parent and the greater the influenceon the local staff.

If the local staff are numerous and have long tenure in theJapanese transplant firm, they are more likely to be patient with,adjust to, and learn from the Japanese.

Survey of American managers in the U.S subsidiaries of Japanesefirms found that the most effective route to influence andinclusion of a Japanese subsidiary was through a mentoringpartnership with a Japanese manager.

In Japan a senior employee paternalistically takes a younger

person under his wing and schools him in the ways of thecompany.

Germans in executive positions in Japanese companies, they said,by and large matched the Japanese in work commitment, withoutcomplaint evenings, weekends, and holidays.

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Opportunities The Japanese praised the efficiency and diligence of Germans on

the job, even over the Japanese staff. German employees werebetter trained and accurate in their work, more productive thanother nationalities.

German workers may cost more, but their reputation for qualityand skill means that we can more easily sell goods to other

countries. Or, Germans may work fewer hours, but when theywork their concentration is beautiful.

Currently there are approx. 955 Japanese companies with 105,000employees in Germany. From 2003-2009, Japan accounted for 186new investment projects in Germany, ranking in the top five

investor countries. The trade relationship between the two countries is strong and

complementary, with Germany importing more than EUR 18 billionin goods from Japan and Japan importing nearly EUR 11 billionfrom Germany

Given the current exchange rate, Germany is an attractive localproduction location for Japanese companies

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Opportunities Fluctuating energy production has necessitated smart energy

management, including new mobility options.

Renewable energy currently makes up over 16 percent of thetotal electricity mix in Germany, which is expected to rise toat least 35 percent by 2020 and 50 percent by 2030.

Germany has already developed the most extensiveframework in Europe for these new technologies.

These conditions present ample opportunities for Japanesecompanies. 99.7 percent of companies in Germany are often

export-oriented SMEs, meaning that the market is notdominated by a few large companies.

Japanese companies can partner with German companies andresearch institutes to further innovation.

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Threats The second-line Japanese generally had little or no foreign

experience, and their facility with English was low. Problem of a glass ceiling on the upward mobility of Germans.

The morale of German middle managers was low, becausepromotion chances were limited. For this reason, a number ofmanagers were seeking jobs elsewhere.

Contrasts in decision-making style most likely lead to serioustension and conflict in the relatively uncommon circumstance.

A problem that Japanese companies in North America and theUnited Kingdom routinely cite in their dealings with localmanagement hires is the high mobility and low corporate loyalty

typical of managerial careers. Anglo- American managers stay on the move, switching jobs and

companies at short notice to advance their careers.

The long-term ties and confidence demanded by full participation ia Japanese corporation are difficult to achieve with these people,

and, Japanese managers commonly justify on these grounds.

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Threats With a shift in corporate policy to some decoupling of the

foreign branch, more reliance on locals, and an aggressive,entrepreneurial culture, this old guard puts up resistance.

Moreover, with the addition of younger aggressive,ambitious local hires unsteeped in the traditional culture,problems of inequity arise.

The company wants to reward the newcomers at a levelappropriate to their skill and drive, but it fears the moraleproblems of a two-tiered reward structure.

This pattern seems particularly a problem for the Japanese

Trading Companies, which typically have conservativeJapanese business cultures and long histories abroad butwhose Japan-based trade is fast diminishing.

These changes in corporate strategy and culture have meantmore responsibility and greater opportunity for a new breed

of local manager, but at the same time resistance from and-

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Threats The problems of white-collar employees in adapting to the

Japanese-managed company have been barriers tocommunication, decision making, and promotion that impedeparticipation.

Japanese subsidiaries in Germany have no choice but tocomply with German labor norms.

If Japanese managers work within the rules established byunion and management, there is no problem.

When a Japanese corporation sets up operations in the U.Sand hires American employees, a range of labor issues is

thrown open for negotiation and dispute: pay, working hours,vacations, work rules, and union representation.

Owing to weak American unions and the competition amongstates and localities to provide an attractive businessclimate, the Japanese company is disposed to drive a hard

bargain.

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Conclusions Japanese multinational corporations face a dilemma: the

unique and traditional management practices that by andlarge have served them well do not easily accommodateoutsiders in the organization

German organization with its own distinctive structure ofauthority and expertise complemented by works councils andcodetermination laws has some features in common with theJapanese model but much of it is markedly different.

The cultural diversity, weak unions, and politicalfragmentation of the United States allow the Japanese firm toapply its standard practice to a local workforce andmanagement team.

American organizational modes span more variation andshift more often with the winds of management fashion.Germany, like Japan, is different. It is a tight, dense, and in

some ways closed cultural and social system.

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Conclusions

The Japanese appeared to have no strategic plan for managingtheir internal divisions. The adjustments (e.g., the mentoringpartnerships and compromise personnel systems) seemedevolutionary.

German managers in key positions had contrived the solutions andpersuaded the Japanese to go along.

The business performance of the organization did not seem to besuffering from their internal nationality divisions and the problemsthese posed for communication and cooperation.

The larger the number of employees in the company the larger thework council, whose members must be given paid release time totake care of employees interests.

Companies can try to go against the recommendations of the workcouncils.

There is a system of labor courts to backup the German work lawsand a company can be tied up in the court, unable to implementchanges challenged by the work council, for months.

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Conclusions German government after the Second World War passed the

work constitution act.

While labor conflict within Japanese corporations in Germanyhas been comparatively low, there is however, a majoremployee related problem for Japanese corporations in

Germany. There is a rigid glass ceiling for foreign employees in

Japanese corporations.

There is almost a complete absence of non-Japanese namesamong these executives.

Foreign managers in Japanese corporations know that theyare seldom given the full trust of Japanese highermanagement or given authority on major company decisions.

The lack of career promotions within the company meansthat these Japanese corporations have difficulty hiring andkeeping talented middle managers.

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Conclusions Japanese executives in Germany as elsewhere are

expected to spend only a few years away from Japan,often returning to the home office after two years.

These Japanese executives do not typically understand

the full meaning of German work laws, nor do theyspeak fluent German. Thus the German middle mangeris most often a representative of German employees toJapanese management.

Thus, especially in Germany with the crucial role playedby German middle managers under German work laws,the mistrust and lack of promotions for foreignmanagers in a Japanese corporation proves to beespecially harmful to Japanese corporate interests.