Mitchell Atlas Nuclear engineering for fun and profit

Globalization Challenges for Japanese Companies

A few months ago, Masamoto Yashiro, CEO of Shinsei Bank, spoke about Japanese corporate management styles and the associated globalization challenges for Japanese businesses at a workshop at the University of Tokyo. At the time, I wrote a commentary about his talking points and published it to my Google+ page, but as it is visible only to those in my Japan-related circle, I am republishing a revised version here.

English for International Communication

From what I’ve seen at the University of Tokyo, English usage seems to be reluctantly implemented in the curriculum in my department. Though all of our courses are taught in English, I have a feeling that the professors and the Japanese students sometimes resent having to use English in the classroom. Since I am still a student, I can’t speak for the attitude in the corporate world, but I would guess that many employees share similar sentiments. It would be interesting to hear the views of employees at companies which have implemented an official English-first communication policy, such as at Rakuten and Uniqlo. In any case, English will likely be the de facto world language for the foreseeable future, so Japanese companies will have no choice but to improve their overseas managers’ English abilities if they are to succeed in globalization. Of course, it is also possible for companies to hire English speakers who have developed high Japanese proficiency to fill positions related to their overseas operations, but in light of how few non-native Japanese speakers attain native-level competency in Japanese, there will likely be a shortage of English-Japanese bilingual workers in the foreseeable future. In the long-term, the number of proficient English-speakers in Japan must increase in order to produce workers capable of communicating on the international stage.

Traditional Approaches of Japanese Companies

While there are merits to producing generalists in a company, I think it is inappropriate to apply that strategy to every career employee. It is beneficial for high-level managers to have a generalist’s understanding of the departments beneath them, but most of the non-management employees should strive to become experts in one aspect of the company’s operations. This would allow employees’ quality of work to improve over time as they developed their skills, instead of being re-shuffled every few years and starting from square one each time. Employees should have some input into their career trajectory so those who wish to enter management can be given the opportunity to broaden their experience within the company, while those who do not can remain where they feel most competent.

In addition, senior management would do well to be more receptive to fresh ideas. It is dangerous to mindlessly mirror other companies’ strategies (as exemplified by “What do other banks do?”) because it leads towards a homogenous marketplace. Just as genetic diversity allows a species to effectively respond to changing environment, an industry with strategic variety will be more adept at competing in the global marketplace. On that note, Japanese companies should make more of an effort to recruit foreign talent to take advantage of their different view points and experiences.

Management structure

It almost goes without saying that every company should make efforts to identify, reward, and encourage high performance from its employees. Of course, this is often a difficult proposition and I won’t go into detail about specifics, but generally an effective performance evaluation should present employees with opportunities to distinguish themselves from their peers through talent and effort and be rewarded accordingly. This means that pay and promotions should be performance-based, rather than seniority-based as is the status quo in Japan. However, it is also important to not engender too much competition within the company, so that employees do not have motivation to ignore, or even sabotage, their co-workers in pursuit of promotions or higher pay.

Q&A

The last question about University of Tokyo drew my attention since I am a student here. I don’t think that UT should focus too much on its ranking because they are in no position to compete financially with the high endowments of the elite American and British universities. If it wishes to attract more foreign students and researchers, I believe that it must increase the quality and rigor of its classes and it must make it easier for foreign students and researchers to make their livelihood in Japan (for those who are not interested in learning the Japanese language). However, I think that the non-Japanese community at UT will remain small until Japan as a nation becomes more international-friendly. But that’s a topic for a different time.