“ Management can be defined as an art of getting things donethrough people ” MARY PARKER FOLLETT
Joseph Stiglitz in his book, Freefall: Free Markets and theSinking of the Global Economy, said that East Asian nations arerefusing to take on the Western model, but grew more naturallyand assured as they were influenced by easternization and “thatthe benefits were shared equitably Countries such as Japan and South Korea were able to do this by allowing the government to take an active role in managing the economy. We need to Easternize the markets. Government intervention in East Asia led to sustainable growth for over thirty years.
Markets flourished and as a result inequality and poverty weremuch lower in those countries.Stiglitz argues, that the financial crisis in Asia in the late 90′s wasa result of “rapid liberalization of financial and capital markets”,much like the liberalization of the markets in US.
More Government intervention Sustainable & Stable growth Inequality and poverty were much lower Control in liberalization Works on long-term goals Higher preferences for employees
Japan is an East Asian country located in the pacific ocean. It has an unitary parliamentary government. Japan is in 62nd largest country in the world, and in population it isat tenth position. Japan is world’s fourth largest exporter and importer in the world. The major source of strength is in the development and diffusionof new management techniques such as just-in-time production andtotal quality management.
Japan believes in technology and quality, not in capital-intensive. Japan’s remarkable technological advancements andindustrialization allowed them to produce increasinglypowerful military equipment.This countries now follows eastern approach in itsmanagement and we can see that poverty is very low, also theeconomy is stable.
SCIENTIFIC SELECTION PROCESSLIFETIME EMPLOYMENTSENIORITY SYSTEMCONTINUOUS TRAININGEMPHASIS ON GROUP WORKDECISION MAKINGCOMPLICATED PERFORMANCE EVALUATIONFATHER LEADERSHIPGOOD BENEFITS FOR EMPLOYEESSIMPLE AND FLEXIBLE ORGANIZATION
SCIENTIFIC SELECTION PROCESSThere are only 30 top business colleges in Japan and thosewho study in that colleges only have the chance to work inlarge company.These large company’s conduct competitive examinationand those who pass the examination can gain jobs. Companyprovide their own training.LIFE TIME EMPLOYMENTUnder lifetime employment an employee spends his entireworking life with a single enterprise.Ensures job security in the employee and a feeling ofbelongingness towards the enterprise.
SENIORITY SYSTEMEmployment companies following this concept; provideprivileges to older employees who have been with it for a longtime.Promotion and wage increases are based on employee’s lengthof service in the company, not job performance.CONTINUOUS TRAININGThe secret of the success of Japanese managers may lie in“continuous training”.In western organizations, employees receive training only toacquire a new skill or to move to a new position.
EMPHASIS ON GROUP WORKIn most Japanese organizations, a task is not assigned to anindividual; instead several tasks are assigned to a group, whichconsists of a small number of people are treated like familymembers.Probably this is the reason why employees take great pride intheir company and its success.DECISION-MAKINGThe practice of managerial decision-making in Japan is built onthe concept that change and new ideas should come primarilyfrom personnel belonging to lower levels in the hierarchy.Thus in Japan lower level employees prepare proposals forhigher-level personnel.
COMPLICATED PERFORMANCE EVALUATIONWhen job description is not well defined and when tasks areperformed by groups, it becomes difficult to evaluate individualjob performance objectively.The evaluation of workers and managers in Japanesecorporations takes a very long time up to ten years and requiresthe use of qualitative and quantitative information aboutperformance.FATHER LEADERSHIPThe task of a leader is not only to supervise his people atwork, but also to show fatherly concern for their subordinate’sprivate life.
GOOD BENEFITS FOR EMPLOYEESJapanese companies provide substantial benefits to theiremployees.Salary enhancements become rapid after about seven years ofemployment with the firm. Each firm considers employees aremore valuable.SIMPLE AND FLEXIBLE ORGANIZATIONIn Japanese firms, the organization structure is relativelysimple flexible, and it possible for people to take up a newchallenge or a new task by forming a new formal or informalgroup.Informal organization wield considerable power in formalorganization.
TRADITIONAL MANAGEMENT PRACTICESTHE RINGI SYSTEMENTERPRISE UNIONSQUALITY CIRCLESSCIENTIFIC MANAGEMENTPERVASIVENESS OF ENGINEERS
TRADITIONAL MANAGEMENT PRACTICESin-house training of managers.consensual and decentralized decision-making.extensive use of quality control methods.carefully codified work standards.emphasis relations among workers.lifetime employment and seniority-based compensation
THE RINGI SYSTEMThe traditional decision-making process in Japanese firms isreferred to as the ringi system.The system involves circulating proposals by middle managersor by top executives to all managers in the firm who are affectedby an impending decision. There opinions are taken regularly.When a decision proves beneficial, the middle-level managerswho initially advocated it receive credit; when a decision provesunsuccessful, responsibility is taken by top-level executives. Thispractice is intended to promote aggressiveness in youngermanagers.
ENTERPRISE UNIONSOne distinctive characteristic of labor-managementrelations in Japan is the enterprise union, which is organizedaround a single plant.Japanese unions are distinct not only because of their highlydecentralized nature, but also because they represent bothwhite-collar and blue-collar workers.The fact that many upper-level managers have moved upthrough union ranks and may have even served as union officialshighlights the generally less antagonistic relationship betweenlabor and management in Japan.Union membership is generally associated with lifetimeemployment guarantees.
QUALITY CIRCLESThe extensive use of quality circles is another distinguishingcharacteristic of Japanese management.Production processes should be designed with quality control inmind, they contended, and everyone in the firm, from entry levelworkers to top management, should be familiar with statisticalcontrol techniques and undergo continuing education on qualitycontrol.Quality circles provide a means for workers to participate incompany affairs and for management to benefit from workersuggestions. Indeed, employee suggestions play an important rolein Japanese companies.Japanese employee suggestions reportedly create billions ofdollars worth of benefits for companies.
SCIENTIFIC MANAGEMENTJapanese management techniques have been stronglyinfluenced by the tenets of scientific management.The pioneering figure of scientific management is FrederickJackson Taylor (1856-1915).Taylor is best known for his time and motion studies of workersas part of an effort to optimize and standardize work efforts, buthe also argued for a system of bonuses to reward workers basedon productivity.Scientific management techniques are also used in theproduction process. Eastern management approaches usually relies in Scientificmanagement practices
PERVASIVENESS OF ENGINEERSJapan produces up to three times as many engineers a year asthe United States.Japans emphasis on production oriented engineering which isconsistent with its dominant competitive strategy. Engineers in Japan focusing on improving existing products orprocesses rather than developing completely new ones.
South Korea is a Presidential Government Country with Seoul asits capital.It is in the 109th position in area and 24th position in population.South Korea is the 15th Largest economy in the world andfourth Largest economy in Asia.Main industries in South Korea are electronics ,telecommunications, automobile production ,chemicals, steel andshipbuilding.Its economy is an export- driven.Korea’s Labour force by occupation is as :agriculture: 7.3%; industry: 24.3%; services: 68.4% (2010)
The Koreans have accomplished remarkable economic successsince the 1960s, and their management system has played amajor role in contributing to this phenomenal economicachievement.The external environment of the Korean management systemis a crucial factor in understanding it.In this kind of environment, the role of government isprominent because without active support from the government,no enterprise can survive and prosper. Government, effectively formulated and implemented theeconomic policy and economic planning, and in business,entrepreneurs and managers boldly formulated and skillfullyimplemented business strategies for their enterprises.
For economic growth, the government and business havemaintained a supplementary and complementary relationship.The effective use of human resources is a key to effectivemanagement. Therefore, if the Korean management has beeneffective, this should be attributed to effective human resourcemanagement.The Korean management of human resources has been asunique as the Korean management system.
DECISION MAKING IS NOT CENTRALIZEDLIFETIME EMPLOYMENTINDIVIDUALISM IN GROUP SETTINGSSIGNIFICANCE OF PROMOTION LEADERSHIPCLOSE RELATIONSHIP BETWEEN GOVERNMENT ANDBUSINESSCONFUCIAN WORK ETHICS
DECISION MAKING BY IS NOT CENTALIZEDDecision making by consensus is practiced in Korea as in Japan.The Koreans call it "the pumui system.The process is basically the same as the ringi system, which wasdiscussed in the section on the Japanese management system.Every employee gets a chance to express their thoughts.LIFETIME EMPLOYMENTLifetime employment is also a traditional concept in the Koreanmanagement system.Once an employee is hired by an organization, he is guaranteedlifetime employment until he retires.
INDIVIDUALISM IN GROUP SETTINGSIndividualism in a group setting is a unique feature of theKorean management system.Nevertheless, it is not permitted to stifle individual aspirationsin the context of group settings.One of the most important roles of superiors is, therefore, topromote individual aspirations in order to achieve organizationalgoals.SIGNIFICANCE OF PROMOTIONPromotion is very important in the Korean management systembecause it becomes a crucial criterion which measures the successor failure of an employee.
LEADERSHIPThe leadership style in the Korean management system ingeneral is authoritarian and paternalistic.An organization is interpreted as an extension of a family, andrelationships within the organization are similar to those within afamily.A manager is a superior, but he does not play a father role to hissubordinates, and a subordinate in turn rejects any considerationof himself playing the role of a son to his superiors.
CLOSE RELATIONSHIP BETWEEN GOVERNMENT ANDBUSINESSThe relationship between government and business is very closeand cooperative as it is one of the feature of Easternization.Traditionally, the government sets up industrial policy mainlythrough five-year economic plans, and business enterprisesconduct their businesses by fulfilling these government plans.Business leaders sometimes take initiatives in proposing newventures to be included in the forthcoming economic plan.
CONFUCIAN WORK ETHICThe Confucian work ethic, or hard work, has been an importantnorm in organizations in South Korea.This work discipline was proved eloquently in the 1970s whenmany Korean employees were working in Saudi Arabia and otherMiddle East countries.People there were amazed and impressed by the discipline andlong working hours of the South Koreans.
Easternization WesternizationDECISION MAKING: Consensus By individual or majority voteDURATION OF : Lifetime No guaranteedEMPLOYMENT employment employmentINDIVIDUALISM : Individualism IndividualismVS GROUP SPIRIT as strong as persistent team spiritLOYALTY OR : Extremely Not criticallyCOMMITMENT strong important
ExtremelySENIORITY : important Strong Exclusively Both insideMANAGEMENT and outside : insideDEVELOPMENT promotion promotionLEADERSHIP Authoritarian/ MostlySTYLE : participative paternalistic Based on Mostly basedCOMPENSATION : seniority on merit ratingGOVERNMENT Close relation No directAND : and cooperation relationBUSINESS
Westernization favors Rationality and other Europeannorms, Individualism has got higher predominance in Western style.It isalways money-oriented.Another defect is that mobility andorientation is always toward short-range goals. Other features areDe-emphasis of the seniority system ,Protestant work ethic.Western firms go for maximum profit.In Easternization there is more Government intervention in thebusiness. As a result Sustainable & Stable growth is acquired.Inequality and poverty between people were much lower.Control in liberalization is there, thus government could controlbusiness. More importantly Eastern firms concentrate and in works
With Easternization…we can say that not the application ofcapital-intensive, but instead use of a radically new set ofmanagement techniques is important. It is now clear that themajor source of this strength of Japan & Korea is in thedevelopment and diffusion of new management techniques suchas just-in-time production and total quality management.Everyone should introduce these management techniques andcan have significant benefits, not just in lowering costs but alsoin improving product variety and quality, and in being able tosatisfy customer needs more effectively.
Firms implementing these new management techniques in arange of developing countries in Asia, Latin America and sub-Saharan Africa (as well as the INDIA,UK and the USA) - shows thatconsiderable gains can be achieved even in low-income countrieswith poor levels of human resource development. Thesemanagement techniques improve the performance both of theimplementing firms and the overall economy.But success is not automatic and many firms fail in their attemptsto introduce these new managerial techniques. Based upon theresults of primary research the author argues the case for activelypromoting the rapid diffusion of these techniques and identifiespolicy implications for governments, management and labour.Moreover, as the research shows, success cannot be achieved bytrying to replicate the social relations used by the any nation. Anew path has to be identified, one which builds on the specificcultural and political experience of individual firms reaches newheights.