Idea Transcript
UNIVERSITAS INDONESIA
THE ‘THREE PILLARS’ OF JAPANESE HUMAN RESOURCE MANAGEMENT: AN ASSESSMENT OF THE DEGREE OF CONVERGENCE OF THE TRADITIONAL JAPANESE MODEL TOWARDS THE WESTERN MODEL ‘TIGA PILAR’ MANAJEMEN SUMBER DAYA MANUSIA JEPANG: PENILAIAN DERAJAT KONVERGENSI MODEL TRADISIONAL JEPANG TERHADAP MODEL BARAT
MAKALAH NON-SEMINAR
KEMAL CAESAR SUTAMA 0906551792
FAKULTAS EKONOMI PROGRAM KELAS KHUSUS INTERNASIONAL DEPOK AGUSTUS 2013
Tiga pilar ..., Kemal Caesar Sutama, FE UI, 2013
UNIVERSITAS INDONESIA
THE ‘THREE PILLARS’ OF JAPANESE HUMAN RESOURCE MANAGEMENT: AN ASSESSMENT OF THE DEGREE OF CONVERGENCE OF THE TRADITIONAL JAPANESE MODEL TOWARDS THE WESTERN MODEL ‘TIGA PILAR’ MANAJEMEN SUMBER DAYA MANUSIA JEPANG: PENILAIAN DERAJAT KONVERGENSI MODEL TRADISIONAL JEPANG TERHADAP MODEL BARAT
MAKALAH NON-SEMINAR
Diajukan sebagai salah satu syarat untuk memperoleh gelar Sarjana Ekonomi
KEMAL CAESAR SUTAMA 0906551792
FAKULTAS EKONOMI PROGRAM KELAS KHUSUS INTERNASIONAL DEPOK AGUSTUS 2013
i Tiga pilar ..., Kemal Caesar Sutama, FE UI, 2013
HALAMAN PERNYATAAN ORISINALITAS
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HALAMAN PERNYATAAN PERSETUJUAN PUBLIKASI TUGAS AKHIR UNTUK KEPENTINGAN AKADEMIS Sebagai sivitas akademik Universitas Indonesia, saya yang bertanda tangan di bawah ini: Nama NPM Program Studi Departemen Fakultas Jenis karya
: Kemal Caesar Sutama : 0906551792 : S1 Kelas Khusus Internasional : Kelas Khusus Internasional : Ekonomi : Makalah Non-Seminar
demi pengembangan ilmu pengetahuan, menyetujui untuk memberikan kepada Universitas Indonesia Hak Bebas Royalti Noneksklusif (Non-exclusive Royalty Free Right) atas karya ilmiah saya yang berjudul : THE ‘THREE PILLARS’ OF JAPANESE HUMAN RESOURCE MANAGEMENT: AN ASSESSMENT OF THE DEGREE OF CONVERGENCE OF THE TRADITIONAL JAPANESE MODEL TOWARDS THE WESTERN MODEL ‘TIGA PILAR’ MANAJEMEN SUMBER DAYA MANUSIA JEPANG: PENILAIAN DERAJAT KONVERGENSI MODEL TRADISIONAL JEPANG TERHADAP MODEL BARAT beserta perangkat yang ada (jika diperlukan). Dengan Hak Bebas Royalti Noneksklusif ini Universitas Indonesia berhak menyimpan, mengalihmedia/formatkan, mengelola dalam bentuk pangkalan data (database), merawat, dan memublikasikan tugas akhir saya selama tetap mencantumkan nama saya sebagai penulis/pencipta dan sebagai pemilik Hak Cipta. Demikian pernyataan ini saya buat dengan sebenarnya. Dibuat di
: Depok
Pada tanggal : 28 Agustus 2013 Yang menyatakan
(Kemal Caesar Sutama) iv Tiga pilar ..., Kemal Caesar Sutama, FE UI, 2013
ABSTRAK Nama
: Kemal Caesar Sutama
NPM
: 0906551792 (Universitas Indonesia)
NPM
: 550061 (University of Melbourne)
Program
: Kelas Khusus Internasional FEUI : Commerce, Finance and Management Majors, Melbourne University
Judul
:
THE ‘THREE PILLARS’ OF JAPANESE HUMAN RESOURCE MANAGEMENT: AN ASSESSMENT OF THE DEGREE OF CONVERGENCE OF THE TRADITIONAL JAPANESE MODEL TOWARDS THE WESTERN MODEL
Makalah ini dibuat dengan tujuan untuk meneliti dan memberikan penilaian atas tren perubahan yang terjadi pada aplikasi model tradisional sumber daya manusia di Jepang. Adapun tiga hal yang menjadi ‘pilar’ dari model tradisional tersebut adalah: pengabdian kerja seumur hidup, sistem remunerasi berdasarkan senioritas, serta perserikatan pekerja pada setiap perusahaan. Sejauh mana ketiga pilar ini bergerak menuju model Barat masih bergantung kepada konteks kultural, sosial, dan kebiasaan yang sangat melekat kepada individu pekerja di Jepang. Sehingga, dapat dikatakan bahwa reformasi terhadap sistem sumber daya manusia di Jepang menjadi kebaratan tidak dapat terjadi sepenuhnya. Kata kunci: jepang sumberdaya manusia
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DAFTAR ISI HALAMAN SAMPUL HALAMAN JUDUL
i
HALAMAN PERNYATAAN ORISINALITAS
ii
HALAMAN PENGESAHAN
iii
HALAMAN PERNYATAAN PERSETUJUAN PUBLIKASI KARYA ILMIAH UNTUK KEPENTINGAN AKADEMIS
iv
ABSTRAK
v
DAFTAR ISI
vi
Introduction
1
The Framework of International Human Resource Management
1
The Socio-Cultural Embedded System
2
The 1990s Economic Recession and Young Workforces
4
The Notion of HR Convergence
5
Indications from the Multinational Companies
6
The Socio-Cultural Challenges
8
Conclusion
10
References List
11
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Introduction Some believe that globalisation and the increasing business activities between Japan and Western companies have contributed to the transfer of HR practices from Western world to Japan. On the opposite side, one can also view that the Western practices will face resistance as it would conflicted or mismatch with the Japanese strong social and cultural context. This essay attempts to answer the question of whether or not is Japanese human resource management converging towards a western model. Further, are the “three pillars” of Japanese HRM dead? Though today some of the Western practices seemed to filter into the Japanese HR policies, the essay tends to agree that the Japanese HRM does not converge (at least completely) with the Western model. This essay argues that the Japanese three pillars of HRM are not completely dead. At a certain level of HR policy implementation in Japan, they still have a degree of role in terms of people‟s culture and way of thinking. This essay approaches the main question by exploring the degree of embeddedness of the three pillars in the sociocultural context, the forces that would lead to HR reforms, the extent of potential convergence of Western model to these pillars, and the challenges it might face.
The Framework of International Human Resource Management A study suggests that the HR practices on the recent decade is in a gradual reform process which involve a triangular influences between East Asia, Europe and the US given the shapping factors of state influence, economics, and socio-cultural development. (Zhu, Warner, and Rowley, 2007). Most of often, as a mean of comparison and representation, the current theoretical framework of international HRM are referring to those of the Japan‟s, US‟, and Germany‟s. Pudelko (2006) states that 1 Tiga pilar ..., Kemal Caesar Sutama, FE UI, 2013
these three nations features the representation of the three variants of capitalism: the free-market economy (USA), the social market economy (Germany), and the government guided market economy of East Asia (Japan) where Germany sits in the middle of the two end of the spectrum of Japan and US. It might also be believed that the fundamental difference of capitalism would ultimately influence the treatment of the nation‟s man power; the human resource practices. For the purpose of discussion, both US and Germany HR approaches will represent the term „Western practices‟ unless otherwise indicated.
The Socio-Cultural Embedded System The three pillars of Japanese human resource management include life-time employment, seniority compensation, and enterprise unionism. It is argued that the traditional Japanese HR practices reflected in the three pillars are strongly embodied to the social and cultural context of the country itself. The Geert Hofstede‟s national culture index on Japan on Figure 1 can be used to assist the discussion. According to Hofstede‟s research, a country‟s national culture can be classified into five dimensions: Power Distance (PDI), Individualism vs. Collectivism (IDV), Masculinity vs. Femininity (MAS), Uncertainty Avoidance (UAI), and Long Term Orientation (LTO). The first pillar of Japanese HRM is life-time employment. It pretty much represents the employees‟ long term commitment with the organization as well as the organizations‟ commitment to retain those kinds of workers who happen to have worked in the organization for a longer time (senior employees). From the index, it is shown the Japan‟s relatively high level of Long Term Orientation index where the people appreciate commitments towards something, in this case the organization.
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The second pillar is seniority compensation system. The traditional belief of the system is that the Japanese employees‟ career progression and compensation should be in accordance to the individual duration of commitment within the organization. The seniority principle quite contributes to the greater power distance between younger and older employees, despite of the job position. This is actually shown from the index where the Power Distance of Japan is relatively higher. The third pillar is enterprise unionism. The particular characteristic of the unionism practice in Japan is that each enterprise will likely to have an employees union which constitute a large group of representative bodies within the country. In Japanese organizations, the value of group and collectivism takes a role for consensus in decision-making that place the emphasis on collective responsibility and accountability as well as a high value on unity and harmony within the organization (Weihrich, 1990). This is particularly true, the index shows that the Japanese people have a lower level of individualism or in other words they value collectivism more.
Figure 1: National Culture Index Comparisons: Japan vs. US vs. Germany (Hofstede, n.d.)
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The 1990s Economic Recession and Young Workforces The 1990s period was marked with the extensive cost cutting and productivity improvement
measures
made
by
Japanese
companies,
government
market
deregulations, and certain changing attitudes between the employees and management (especially from the younger demographic). The economic downturn demanded for cost efficiency and improved talent management needed to be promoted in order for the organizations to stay competitive to survive the crisis. Another challenge was that the Japanese young people had started to lose interest towards the rigid ways of traditional Japanese HR that features loyal and uncomplaining devotion toward seniors and company Mroczkowski and Hanaoka (1998). Therefore, the improvement towards talent management also requires the companies to attract and retain the more critical young demographic which may certainly be done through HR practices reformation. According to Adhikari, Budhwar, and Hirasawa (2010), the three pillars of Japanese HR had gradually undergone changes into the Western direction since the economic downturn during the 1990s. Some of the observable changes within the industrial relation are the early application of performance-based systems, the increase in non-regular workers, and the declining trend of employees‟ participation or membership into the union. With the fact that Japan is facing the aging population issue, it needed to start to initially reform the policy related with its first pillar of life time employment in order to cut the business costs. Transfer to new positions within the company and loaning some workers to another company were the two practices done to trick the issue of aging workforce within the company and at the same time bringing in the younger talented one. The decline in the seniority principle is the most observable change in the Japanese HR fundamental where the managers started to shift into
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performance based evaluation upon promotion and compensation as well as objectiveoriented bonus (Pudelko and Harzing, 2010). This is particularly relevant to the fact that Japanese organizations had to compete with their Western counterparts (mainly Americans) to attract the talented workforce. Apparently, the early shift of social behaviour among the younger Japanese talents were beginning to appear in terms that they wanted to be involved in the more flexible contract employment and in the careerpath environment that values performance evaluations (related with the second pillar). The change in Japanese younger workforce way of thinking had further forced the companies to formalize their HR practices into more Western style. Related with compensation and promotion system, the increasing unions demand on how performances are to be measured and how output of one type of job description are to be rated relative to the other job descriptions had pushed the Japanese organization to apply a more formal performance-based evaluation system (Whittaker, 1998). Ultimately, the recession and shifting perspective of the young people both suggested Japanese management to reform their HR practices which could be done by diffusing the Western practices.
The Notion of HR Convergence Mroczkowski and Hanaoka (1998) proposed a modernization argument where global companies and businesses are forced to make rapid transfer and diffusion of practices in order to seek „international best practices‟ for economical efficiency. This is particularly relevant if it is regarded with the Japan‟s situation in 1990s. Interestingly, a study made upon practices transferability from Japan to U.S. within the scope of automotive manufacturing companies found that well-known Japanese HR practices
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were not transferrable to the U.S., but most practices that is related to operational methods were transferred (MacDuffie and Pil, 1994). The Japanese inspired methods supply chain for instance (e.g. Just in Time, Made by Order, kanban) are well known in promoting operational efficiency and profitability. This shows that practices that are not socially or culturally embodied, such as operational practices that deal with technology, can be more diffused or transferred to another. Whereas those of social and cultural specific, such as HR practices, are more difficult to transfer. Hence, to some extent, this supported the argument that Western HR cannot converge with the Japanese HR due to the contrasting country-of-origin social and cultural context.
Indications from the Multinational Companies Mroczkowski and Hanaoka (1998) suggest that the growing global economic interdependence requires companies to serve the global markets, leading to the increasing number of international alliances and partnerships. The increasing trade activities and relationships between Japanese companies with the Western companies might translate into the increasing growth of Western subsidiaries companies in Japan and Japanese subsidiaries in Western world. This also suggests the increasing staff/expatriate exchanges between the two worlds. Therefore in this case, one might argue that to some extent, multinational companies (MNC) could become the transfer agents of HR practices that promote convergence at both headquarter and subsidiary level. In terms of the international HR practices, there are three main tendencies or directions that determine a subsidiary‟s use of HR practices within its host country: dominance effect, country of origin effect, and localization effect. As discussed in the
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earlier section, the general spectrum division of types of HR practices are between that of the American, German, and Japanese, where the American and Japanese HRs are both set as the two opposite end of the spectrum. One study was made by Pudelko and Harzing (2010) upon HR practices by American, German, and Japanese MNCs by measuring each MNCs‟ tendency or direction of the use of HR orientation. They found out that at headquarter level, generally the Japanese MNCs‟ managers were orienting itself towards the use of American model of human resource management. At subsidiary level, they also found that there were indications of dominance effect in the two cases; that is, the Japanese subsidiaries in Germany and German subsidiaries in Japan. Interestingly, the finding suggested that both types of subsidiaries did not feature localization or country of origin effect, but features American practices instead. Meanwhile, the American counterparts that were operating in both Japan and Germany did feature a diminishing commitment to local practices. The comment on the overall finding of Pudelko and Harzing‟s particular study might suggest several indications to the idea of convergence today. Firstly, there is to some extent that the Japanese management perceive traditional model of Japanese HR as in need for the reform. This is indicated by the trend of Japanese headquater to have an orientation towards the American practices. Secondly, the simillar indication is also found not only among the Japanese subsidiaries operating in host countries, but the German subsidiaries as well. It was found that they were not affected by localization effect, but rather by the dominance effect towards American HR practices. Thirdly, the American subsidiaries feature a high level of country-of-origin effect. These indications further suggest that the American HR practices had caught the international MNC managers‟ acceptance which might be believed to be the „best practice‟ of HR approach
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today. Therefore, the convergence of Western HR into the Japanese management is more likely to be referred to the American practices in which such convergence might be said to be reasonable by the Japanese management in terms of „best practice‟ it can offer. Another research of HR practice-transfer that studied MNC subsidiaries in Greece had found a complimentary finding. The study had found that in relation to both country-of-origin and dominance effect, HR practices that seemed to mismatch with the local social and cultural context will show the low level of convergence and diffusion (Myloni, Harzing, and Mirza, 2007). This might lead to a generalizing argument. That in the case of the Japanese, although there is a confident level of dominance and country-of-origin effect of American approach within the Western subsidiaries in Japan that were discussed earlier, it will not necessarily translate into a complete convergence of Western practices. At least to the level where they will not match with the sociocultural context of Japan. Therefore, it is likely that Japanese manager will not completely abandon the fundamental principle of the „three HR pillars‟. The suggestion from the Greece case study also reconfirms an earlier argument that HR practices, at the socio-cultural context sensitive, will be difficult to be adopted by the recipient. The Socio-Cultural Challenges Although over simplistic, referring to the Hostede‟s five indicators of sociocultural characteristics index from Japan and US (Figure 1), one might easily conclude that both world are fundamentally different. The contemporary theoretical framework of international HRM had places Japan and US on the far most opposite spectrum as well. It can be argued then, that Western practices will find it difficult to converge with the
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Japanese‟s. This section attempts to see the extent of the fundamental differences can create resistances that limit the convergence of Western practices (particularly US) to the local Japanese HRM. By far, the most cited type of practice convergence is the application of performance-based evaluation into the compensation and promotion system. Such practice is effective to evaluate the individual performances whereas the Japanese culture promotes collectivism and group orientation instead. Pudelko and Harzing (2010) argued that such diffusion of practice will result in a clash with the underlying culture of Japanese society which will lead to evaluation inconsistencies/ambiguity, contradictions, frictions between union and management, as well as frustrations among the employees. Furthermore, the change in the underlying HR practices in which some (mostly older demographic) had already accustomed to, might lead to social unrest. As Pudelko (2004) suggested, such underlying reform might be taken as a breach of trust and perceived as the contradiction to the values that were initially socialised by the management/company. Ultimately, there will be a degree of resistance to reform which translate into the limit of HR convergence. The lack to reform by the management is believed not to be the lack of awareness or willingness towards the need to reform. However, as Whittaker (1998) suggested, it is the management‟s interest to fulfill the corporate needs while at same time to maintain the status of fairness among the employees and the unions. Therefore, they believe that what cannot be converged into, should not be forced to be converged.
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Conclusion The contemporary framework of international HRM had positioned Japan and US on the further most opposite pole of the spectrum. It is believed that HR practices are strongly embedded with the local socio-cultural context, especially in Japan which seems to make the context to be more specific. In this sense, the traditional Japanese approaches towards modern globalisation can perhaps be said to be difficult. The economic downturn in the 1990s and the shifting perception of HR practices among young Japanese had become the motivation for Japanese companies to reform their HR practices to reduce cost and maintain competitiveness. In this sense, the idea of convergence of Western practices into Japanese practices seemed to be necessary. It was found that convergence will apply only to the extent that the diffused practices are socio-culturally fitted. Apparently, it was found as well that the American HR practices (as a representation of Western) had dominance effect on most of the operating MNCs. This had made American HR to be the today‟s common interests. Furthermore, it is believed that adoption of American approach that is fundamentally differs with the Japanese might lead to an extent of resistance although there are evidences that certain practices are implemented. Ultimately, the overall comment to the findings is that yes that the Western (American) HR practices are converging to the Japanese practices, but not completely. The reason is that to some degree the traditional three pillars of Japanese HR are still retained in the work community as an underlying socio-cultural belief.
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References List Adhikari, D., Budhwar, P., & Hirasawa, K. (2010). Changing employment relation systems in Japan: cases of the Mitsubishi Chemical Group and the Federation of Shinkin Banks. International Journal Of Human Resource Management, 21(13), 2414-2437. MacDuffie , P., & Pil, F. (1994). Transferring japanese human resource practices: Japanese auto plants in japan and the u.s. Mroczkowski, T., & Hanaoka, M. (1998). The End of Japanese Management: How Soon?. Human Resource Planning, 21(3), 20-30. Myloni, B. B., Harzing, A. A., & Mirza, H. H. (2007). The effect of corporate-level organizational factors on the transfer of human resource management practices: European and US MNCs and their Greek subsidiaries. Hofstede, G. (n.d.). What about japan?. Retrieved from http://geerthofstede.com/japan.html Pudelko, M. (2004). HRM in Japan and the West: What are the Lessons to Be Learnt from Each Other?. Asian Business & Management, 3(3), 337. Pudelko, M. (2006). A comparison of HRM systems in the USA, Japan and Germany in their socio-economic context. Human Resource Management Journal, 16(2), 123153. Pudelko, M. (2006). The seniority principle in Japanese companies: A relic of the past?. Asia Pacific Journal Of Human Resources, 44(3), 276-294. Pudelko, M., & Harzing, A. (2010). Japanese human resource management : inspirations from abroad and current trends of change. In , Challenges of human resource management in Japan (pp. 28-60). Weihrich, H. (1990). Management Practices in the United States, Japan, and the People's Republic of China. Industrial Management, 32(2), 3. Whittaker, D. (1998). Labour unions and industrial relations in Japan: Crumbling pillar or forging a `third way'?. Industrial Relations Journal, 29(4), 280. Zhu, Y., Warner, M., & Rowley, C. (2007). Human resource management with ‘asian’ characteristics: a hybrid people-management system in east asia.
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