Japanese Management Decision-Making Styles

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The Japanese will often make decisions by group consensus.
The Japanese will often make decisions by group consensus. (Image: Jupiterimages/Comstock/Getty Images)

The Japanese culture significantly influences their business management decision-making. The Japanese style of decision-making is almost completely opposite the way decisions are made in the United States. This is a reflection of their deep regard for group dynamics and their preference for the production of quality products and services over short-term profitability.

Japanese Culture

Japanese society is based on the principle of harmony and balance for the ultimate benefit of the people, the family, the business and the country. Everyone has a distinct place in the established hierarchy with great respect shown for age and status. Most employees achieve status in the workplace by working their way up from the bottom to the top levels of businesses. Japanese businesses hire employees for life and seniority in a company is achieved through their experience and longevity with the company.

Japanese Business Culture

The Japanese prefer to do business on the basis of personal relationships, thus most business associations are achieved through introductions and recommendations by those who already have a good relationship with a Japanese company. The Japanese know their employees and their clients intimately. Business decisions are based on established ability and credibility in personal and business affairs. The value of a business enterprise is reflected in client testimonials of a company’s quality service or product. The Japanese prefer long-term relationships with their business associates.

Japanese Management Techniques

After receiving their education and being hired by a company, managers in Japan are trained by middle-level and senior managers who serve as teachers and role models to the new hire. Once mentored, managers can transfer to any department in a company. In contrast in the United States managers are chosen according to a management specialty or the successful completion of an MBA program. In the U.S. team leaders hold total responsibility for outcomes; in Japan, the entire team is responsible for quality results. The Japanese use a more cooperative approach wherein the entire team is involved in all aspects of the production process and any decisions that are necessary to that process.

De-centralized Decision-Making

Consensual and decentralized decision-making is the norm in Japanese businesses. This decision-making process is referred to as the ringi system. Proposals for decisions are generally initiated by middle managers, although top executives may initiate the decision-making process. All departments that will be affected by the decision are sent proposals to reach informal consensus on the matter. Only after the group decides what the best choice is for the company will a formal decision be followed. No one person makes a final decision. All decisions are based on group consensus. Emphasis is on cooperation, shared responsibility and long term value for the company.

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