JAPANESE HUMAN RESOURCE MANAGEMENT ... - …

1 JAPANESE HUMAN RESOURCE MANAGEMENT : INSPIRATIONS FROM ABROAD AND CURRENT TRENDS OF CHANGE Markus Pudelko Anne-Wil Harzing Version November 2009 To be published in Bebenroth, R. (ed) (2010) international HUMAN RESOURCE MANAGEMENT in Japan, London: Routledge. Copyright 2008-2009 Markus Pudelko & Anne-Wil Harzing All rights reserved. Prof. Anne-Wil Harzing Email: University of Melbourne Web: Department of MANAGEMENT & Marketing Faculty of Economics & Commerce Parkville Campus Melbourne, VIC 3010 Australia JAPANESE HUMAN RESOURCE MANAGEMENT : Inspirations from Abroad and Current Trends of Changei Authors Markus Pudelko University of Edinburgh MANAGEMENT School 50 George Square, Edinburgh EH8 9JY, UK Tel: + 44 131 651 1491.

2 Fax: + 44 131 668 3053, e-mail: Anne-Wil Harzing University of Melbourne, Department of MANAGEMENT Parkville 3010, AUSTRALIA Tel: +61 3 8344 3724, Fax +61 3 9349 4293, e-mail: Markus Pudelko is Professor of international Business at T bingen University and worked previously at the University of Edinburgh Business School. He has earned Masters degrees in Business Studies (University of Cologne), Economics (Sorbonne University) and international MANAGEMENT (Community of European MANAGEMENT Schools - CEMS) and a PhD (University of Cologne). Markus Pudelko published previously on JAPANESE MANAGEMENT practices in journals such as HUMAN RESOURCE MANAGEMENT , Long Range Planning, international Journal of HUMAN RESOURCE MANAGEMENT , HUMAN RESOURCE MANAGEMENT Journal, Organizational Dynamics and Asian Business and MANAGEMENT .

3 In 2005 he co-edited a book entitled JAPANESE MANAGEMENT : The Search for a New Balance between Continuity and Change with Palgrave. Anne-Wil Harzing is Professor in international MANAGEMENT at the University of Melbourne, Australia. Her research interests include international HRM, expatriate MANAGEMENT , HQ-subsidiary relationships, cross-cultural MANAGEMENT and the role of language in international business. She has published about these topics in journals such as Journal of international Business Studies, Journal of Organizational Behaviour, Strategic MANAGEMENT Journal, HUMAN RESOURCE MANAGEMENT , and Organization Studies.

4 Her books include Managing the Multinationals (Edward Elgar, 1999) and international HUMAN RESOURCE MANAGEMENT (Sage, 2010). Since 1999 she also maintains an extensive website ( ) with resources for international and cross-cultural MANAGEMENT as well as academic publishing and bibliometrics. 11 Abstract The objective of this chapter is to develop suggestions as to how JAPANESE multinational corporations (MNCs) might best make use of foreign, here specifically American and German, HRM practices in order to reform their own HRM model.

5 These suggestions are based on a large scale empirical study, encompassing responses from more than 800 HR managers. The learning possibilities for JAPANESE companies from abroad are analyzed on two different levels: at headquarters and at subsidiary level. Based on empirical evidence, this chapter argues that for Japan, the American system serves as a powerful source of inspiration, highlighting the direction of change. However, in order to establish to what degree to change, more moderate approaches such as, for example, the German one might provide additional sources of inspiration.

6 In any case, no matter from where outside inspirations are taken, the JAPANESE socio-cultural context has to be taken fully into consideration, if this adaptation process is to lead to positive results. 22 INTRODUCTION HUMAN RESOURCE MANAGEMENT (HRM) has been perceived by many observers as a key ingredient accounting for the success of JAPANESE companies on world markets during the 1980s. Suggestions of how Western managers could learn from JAPANESE HRM practices were plentiful. Only one decade later, however, Japan went into a recession from which it has not yet fully recovered.

7 Paradoxically, these same HRM practices are now being viewed by a series of authors as the root of the malaise. This chapter investigates whether JAPANESE HR managers are now planning to learn from the West. More specifically, it explores whether JAPANESE HR managers are keen to learn from Western (in this case American and German) HRM and what they intend to adopt. In order to find answers to these questions we study JAPANESE HR managers intentions and practices at two levels: at headquarters (HQ) and at subsidiary level.

8 As the traditional JAPANESE HRM modelii is increasingly regarded to be in crisis and subject to major change (Dalton and Benson, 2002), this issue is of particular significance for JAPANESE companies. Indeed, one can argue that the question of whether, or to what extent, Japan should incorporate Western MANAGEMENT practices, is standing now for the last one and a half decades at the centre of JAPANESE MANAGEMENT research. Frenkel (1994) observed a convergence toward Western HRM practices, Ornatowski (1998) even discussed the end of JAPANESE -style HRM, Matanle (2003) noted a part convergence in the direction of Western MANAGEMENT and Aoki, Jackson and Miyajima (2007) and Schaede (2008) described irreversible tendencies toward an adaptation of Western MANAGEMENT concepts.

9 Yet despite this research focus, there is little empirical work on managers knowledge of practices elsewhere, and on their views on cross-national adoption. This seems to be a serious omission: such adoption processes are implemented by managers rather than academics; and it is surprising that little empirical research has been done in order to understand better those perceptions and judgments upon which adoption decisions ultimately This viewpoint guides the empirical focus of the research. One obvious difficulty we are presented with if we wish to answer the question what Japan can learn from the West is the selection of countries that are representative of the West.

10 In this study we limit our empirical research to the inspirations Japan might receive from the USA and Germany. This selection has some merit, in representing the largest and the third 33largest developed economies in the world (with Japan being the second largest economy), and the economically dominant nations of North America and Europe (with Japan being the leading economy in Asia). In addition, the USA and Germany each embody the prime example of two of the three main varieties of market economies: the USA representing the free market economy of Anglo-Saxon countries and Germany the social market economy of continental Europe (with Japan embodying the third main variety of market economies, the government-induced market economy of East-Asia).