Death of Japanese model much exaggerated

Japanese companies remain committed to lifetime employment and seniority-based pay. Indeed, the decision to reduce layers of management may be driven partly by companies' desire to offer long-term employment to at least some people, even if they can not do so for everyone.

by Organization Studies
Last Updated: 23 Jul 2013

Also, companies prefer to transfer older workers to their affiliates rather than 'downsize' them, as businesses have tended to do in the US and UK. 

It is true that many keiretsus (collections of companies within one group) have cut costs and de-layered following the economic downturn in Japan. They may now have fewer members, a more 'arms-length' relationship between the companies within them and more open business transactions with companies outside.

But the persistence of cross-shareholding suggests that this corporate model will continue to exist. The importance of hierarchy is going strong in Japan in spite of the fashion for flatter, more informal structures.

For instance, employees are not likely to see their first promotion until they are in their 30s, and the next one a decade or so later. In HR, some pay deals are negotiated on an individual basis, so there is an erosion of the seniority-based pay system.

Source:
New organizational forms, human resource management and structural convergence?
Jonathan Morris, John Hassard & Leo McCann
Organization Studies, 27 Issue 10, October 2006

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