6 Japanese HR Principles to Consider
Japan’s contrast between tradition and modernity have been widely studied in business contexts. We’ve all heard about the legend of Japanese management. How a nation managed to uplift itself from the ashes of World War II, to become Asia’s powerhouse of manufacturing, business, and innovation.
Yet behind the high-tech sheen, a respect for tradition and custom runs deep in Japanese culture. HR practices in Japan are no different. The apparent contradiction has not stopped Japan from being one of the most advanced, organized, and admired places to do business in the world.
Here, we show you six Japanese HR practices and philosophies that you may not have considered before.
Kaizen (改善)
Japan’s contribution to the wider corporate world can be summed up in this concept. Kaizen, or continuous improvement, describes the ideal in which everyone strives towards improvement. After all, to err is human, but improvement is divine.
Kaizen is a non-stop process that’s also gradual and methodical. You don’t have to make wholesale changes all at once, but recognize that small changes now can add up over time. Improvement also starts from the individual up, so practices like performance management are crucial. Furthermore, improvements can come from any place at any time, and management is encouraged to listen to everyone’s views.
Toyota Production System (トヨタ生産方式)
The Toyota Production System (TPS) is more than a system for producing automobiles. It’s a comprehensive, socio-technical system embraced by Toyota, propagated through being exported to its subsidiaries worldwide. Its principles can also be applied to HR.
TPS is founded on three principles: muda, muri, and mura.
- Muda (無駄), or waste, refers to eliminating unnecessary waste. ‘Waste’ in this context is not just wasted resources, but also wasted time, unnecessary processes, and underutilized workers. Eliminating muda is the key to Toyota’s vaunted lean manufacturing process.
- Muri (無理), or unreasonableness, means to avoid overworking or overburdening a particular system. An example of muri would be machines working beyond their limits and needing unnecessary maintenance. When applied to HR, the principle of muri also asks managers not to overburden workers with too many tasks beyond their scope of capability or capacity to focus.
- Mura (斑), or unevenness, demands that systems are designed to produce a consistent product, every time. This is achieved through standardization of tasks and levelling out the workload amongst different departments.
Originally developed for its manufacturing efficiency, TPS was eventually codified into the Toyota Way, a set of principles defining Toyota’s organizational culture.
Sanpo-yoshi (三方良し)
In short, sanpo-yoshi means a win-win situation. But it’s not just win-win between the two sides of vendor and customer. Sanpo-yoshi also includes a third party in the winning formula, i.e. all stakeholders in the transaction.
Hence, sanpo-yoshi is based on the principle that an organization should work towards not only financial success but also the welfare of society and the environment. This also extends to employees, where Japanese corporate culture believes that employees should be developed and taken care of to reach their full potential.
Kokusaika (国際化)
Internationalization, or kokusaika, is all the rage in Japan. It’s a famously insular society, yet its corporations are looking overseas for expansion opportunities due to stalling growth in Japan.
In fact, many of Japan’s largest corporations started off as sōgō shōsha (総合商社), or general trading companies in the 19th century. They include giants like Mitsubishi and Mitsui, who tend to have a more international outlook.
Despite this, tension between internationalization and insularity exists in Japan’s corporate landscape. Non-Japanese appointments to top executive roles are rare, with only 5.1% of TOPIX100 board seats occupied by foreigners in 2019. There are also immense challenges facing foreign executives, including a vast cultural gulf and the mandatory requirement of understanding Japanese.
HR should take note of this when managing your own international efforts. There will always be tension between management at home and the international team, but it can be mitigated through adopting a common corporate culture and embracing diverse viewpoints.
Shinsotsu-ikkatsu-saiyō (新卒一括採用)
The practice of hiring new university graduates en masse is a precursor to Japan’s system of lifelong employment with one employer. Major companies in Japan, such as Toyota, Mitsui, or Panasonic, usually hire new graduates from universities simultaneously during the graduation season in order to replace retiring employees and groom in-house talent. The practice also extends to smaller, white-collar companies.
The system is preferred due to its ability to produce employees that know at a granular level how the company operates. When fresh graduates enter the company, they are often given a chance to work in many departments and trained accordingly. Employers specifically want young graduates due to their flexibility, ambition, and cost. In return, companies will invest in their training and long-term career security. As a result, employees who are products of this system stay extremely loyal to one company.
The obvious drawbacks of this system are the inability to fire old and expensive employees, inflexibility in looking for outside hires, and the tendency to develop an insular way of thinking. In addition, the system has been criticized for the societal cost of stress on students and the strictness of the process. Companies may also miss out on non-traditional competent talent on the market.
As a result, this practice has gradually fallen out of favour in recent years, but some companies still practice this on the new batch of graduates from the top universities in Japan.
Tenkin (転勤)
Another feature of Japanese corporate life are transfers, often to branches in Japan – then to branches overseas. It is an integral part of career development, preparing employees for the highest levels of responsibility.
Companies compensate employees handsomely for overseas transfers. They sponsor accommodation, moving costs, allowances for their spouses and children, on top of a generous salary. In addition, for mid-career executives, becoming the managing director of an overseas subsidiary is considered a prestigious position.
In return, employees are expected to transfer multiple times – sometimes up to four times in 10 years. They acquire valuable international experience along the way.
For many Japanese companies, identifying executives that have performed well in foreign subsidiaries is a key feature of succession planning. Sony’s co-founder, Morita Akio set this precedent when he relocated to New York in order to design products tailored for the massive American market. Upon his return to Japan, he encouraged other employees to re-evaluate their careers and do the same.
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Japan’s contrast between tradition and modernity have been widely studied in business contexts. We’ve all heard about the legend of Japanese management. How a nation managed to uplift itself from the ashes of World War II, to become Asia’s powerhouse of manufacturing, business, and innovation.
Yet behind the high-tech sheen, a respect for tradition and custom runs deep in Japanese culture. HR practices in Japan are no different. The apparent contradiction has not stopped Japan from being one of the most advanced, organized, and admired places to do business in the world.
Here, we show you six Japanese HR practices and philosophies that you may not have considered before.
Kaizen (改善)
Japan’s contribution to the wider corporate world can be summed up in this concept. Kaizen, or continuous improvement, describes the ideal in which everyone strives towards improvement. After all, to err is human, but improvement is divine.
Kaizen is a non-stop process that’s also gradual and methodical. You don’t have to make wholesale changes all at once, but recognize that small changes now can add up over time. Improvement also starts from the individual up, so practices like performance management are crucial. Furthermore, improvements can come from any place at any time, and management is encouraged to listen to everyone’s views.
Toyota Production System (トヨタ生産方式)
The Toyota Production System (TPS) is more than a system for producing automobiles. It’s a comprehensive, socio-technical system embraced by Toyota, propagated through being exported to its subsidiaries worldwide. Its principles can also be applied to HR.
TPS is founded on three principles: muda, muri, and mura.
- Muda (無駄), or waste, refers to eliminating unnecessary waste. ‘Waste’ in this context is not just wasted resources, but also wasted time, unnecessary processes, and underutilized workers. Eliminating muda is the key to Toyota’s vaunted lean manufacturing process.
- Muri (無理), or unreasonableness, means to avoid overworking or overburdening a particular system. An example of muri would be machines working beyond their limits and needing unnecessary maintenance. When applied to HR, the principle of muri also asks managers not to overburden workers with too many tasks beyond their scope of capability or capacity to focus.
- Mura (斑), or unevenness, demands that systems are designed to produce a consistent product, every time. This is achieved through standardization of tasks and levelling out the workload amongst different departments.
Originally developed for its manufacturing efficiency, TPS was eventually codified into the Toyota Way, a set of principles defining Toyota’s organizational culture.
Sanpo-yoshi (三方良し)
In short, sanpo-yoshi means a win-win situation. But it’s not just win-win between the two sides of vendor and customer. Sanpo-yoshi also includes a third party in the winning formula, i.e. all stakeholders in the transaction.
Hence, sanpo-yoshi is based on the principle that an organization should work towards not only financial success but also the welfare of society and the environment. This also extends to employees, where Japanese corporate culture believes that employees should be developed and taken care of to reach their full potential.
Kokusaika (国際化)
Internationalization, or kokusaika, is all the rage in Japan. It’s a famously insular society, yet its corporations are looking overseas for expansion opportunities due to stalling growth in Japan.
In fact, many of Japan’s largest corporations started off as sōgō shōsha (総合商社), or general trading companies in the 19th century. They include giants like Mitsubishi and Mitsui, who tend to have a more international outlook.
Despite this, tension between internationalization and insularity exists in Japan’s corporate landscape. Non-Japanese appointments to top executive roles are rare, with only 5.1% of TOPIX100 board seats occupied by foreigners in 2019. There are also immense challenges facing foreign executives, including a vast cultural gulf and the mandatory requirement of understanding Japanese.
HR should take note of this when managing your own international efforts. There will always be tension between management at home and the international team, but it can be mitigated through adopting a common corporate culture and embracing diverse viewpoints.
Shinsotsu-ikkatsu-saiyō (新卒一括採用)
The practice of hiring new university graduates en masse is a precursor to Japan’s system of lifelong employment with one employer. Major companies in Japan, such as Toyota, Mitsui, or Panasonic, usually hire new graduates from universities simultaneously during the graduation season in order to replace retiring employees and groom in-house talent. The practice also extends to smaller, white-collar companies.
The system is preferred due to its ability to produce employees that know at a granular level how the company operates. When fresh graduates enter the company, they are often given a chance to work in many departments and trained accordingly. Employers specifically want young graduates due to their flexibility, ambition, and cost. In return, companies will invest in their training and long-term career security. As a result, employees who are products of this system stay extremely loyal to one company.
The obvious drawbacks of this system are the inability to fire old and expensive employees, inflexibility in looking for outside hires, and the tendency to develop an insular way of thinking. In addition, the system has been criticized for the societal cost of stress on students and the strictness of the process. Companies may also miss out on non-traditional competent talent on the market.
As a result, this practice has gradually fallen out of favour in recent years, but some companies still practice this on the new batch of graduates from the top universities in Japan.
Tenkin (転勤)
Another feature of Japanese corporate life are transfers, often to branches in Japan – then to branches overseas. It is an integral part of career development, preparing employees for the highest levels of responsibility.
Companies compensate employees handsomely for overseas transfers. They sponsor accommodation, moving costs, allowances for their spouses and children, on top of a generous salary. In addition, for mid-career executives, becoming the managing director of an overseas subsidiary is considered a prestigious position.
In return, employees are expected to transfer multiple times – sometimes up to four times in 10 years. They acquire valuable international experience along the way.
For many Japanese companies, identifying executives that have performed well in foreign subsidiaries is a key feature of succession planning. Sony’s co-founder, Morita Akio set this precedent when he relocated to New York in order to design products tailored for the massive American market. Upon his return to Japan, he encouraged other employees to re-evaluate their careers and do the same.
