International and Comparative Employment Relations - Article Example

Why are Japanese firms good at making use of the tacit skills and knowledge of employees for organizational learning? Can firms in the liberal marketeconomies adopt the same model of organizational learning? According to the latest statistical records, labor force of Japan is more than 68 million. Around 83 percent of total number of employees is working as employees in various organizations. The economic growth of Japan is greatly dependent over their skillful employees, as most of the Japanese firms know about proper use of the ‘tacit skills and knowledge of the employees’. Since 1945, the post war period, economic condition of Japan was not always stable and due to this instability in different times several changes occurred in the labor market of Japan. In the late 60s, Japan’s economy was running at a high pace, resulting in 1.1 percent of unemployment rate. Later on the whole situation becomes worse and the total rate of unemployment rose to 5 percent (November, 2001). Once of the main reasons for increase in the rate of unemployment was deterioration in the employment condition. On many occasions it has been observed that senior working personnel ceased their search for jobs, whereas many educated youths found it hard to find a career according to their expectations. (Bamber, Lansbury and Wailes, 2004, 278) Apparently it seems that the Japanese model of employment relation, which has already earned a huge respect from several other nations of Asia as well as across the world, is now failing in terms of popularity. Since mid 70s, the Japanese model of employment relation drew attention of various nations in terms of the “favorable economic performance, and its ‘cooperative’ approaches to employment relations, which have allegedly supported this economic performance”. (Bamber, Lansbury and Wailes, 2004, 280) In the 20th century Japan also expressed a great deal of interest in deriving employment relation models of various western nations, mainly of Germany, UK and USA. Before 1973, Japan used to consider those models as more advanced and thus it felt inspired to derive main technologies and management strategies from those countries. There was no such obstruction as the western nations were also equally interested to understand the Japanese model but the main problem happened with the citizens. New additions to the main model proved to be quite confusing for employees of Japan. However such attitude did not take much time to change as in 1973, the oil crisis affected economy of the western countries in a bad way. Growth rate of Western countries’ economy received a great setback and Japan changed its approach towards those economic models, some of those also lost their authenticity. The western nations as well as certain Asian counterparts realized that the Japanese model of employment relations is the main avenue that leads the firms of the nation to utilize knowledge and tacit skill of the employees for organizational learning. Precisely, it can be said that organizational learning in the arena of knowledge within the vast premises of organizational theory that leads to proper learning or adaptation process of an organization. In the 20th century an organization is considered as an entity and it has also got the qualities of adaptation. An organization is considered to have adaptive feature if it has the ability to perceive changes from the outer world, at the same time it adapts itself accordingly. The Japanese model of employment relation always emphasizes over the organizational learning quality. Due to this quality most of the Japanese organizations are flexible and they do not suffer easily like industries of other countries in time of economic recession. In the context of organizational learning it is important to understand role of the Japanese unions. Most of the Japanese unions are not organized on the basis of job or occupation instead they are controlled in terms of establishment or activity level of the establishment. Union of an organization in Japan comprises of the employees of the company itself, irrespective of organizational hierarchy. Members of the union, i.e. employees of a company are divided into two groups, the blue-collar workers and white-collar employees. Unlike unions of the Western countries, it is expected from the employees that they would stay in the same company until they are retired or they are considered as surplus employees or they submit their resignation voluntarily. Considering the factor that average life span of the Japanese people is more considered to citizens of other nations, almost 99 percent of the Japanese enterprises have stretched the retirement age of the employees to 60. (Bamber, Lansbury and Wailes, 2004) After their retirement, such employees try to find some other job for them or they simply invest a part of their saving to start up a small business venture. An enterprise comprises of both manual and non manual stuffs and if any member leaves his job, his membership of the union is automatically cancelled. Those employees, who receive for managerial positions also lose their membership of the union. The unions are responsible to fulfill two fold duties. On one hand, it is the responsibility of the union to look after the profit of the company and on the other it also provides legal security to the employee in case of arbitrary actions from the employer. It means that an employee as he is under a union feels quite secure about protection of his job. Despite the presence of national confederation, the unions of the enterprises prove themselves more resourceful and powerful as well. One of the main reasons for strength of such enterprise unions is that they are self supportive due to their financial liberty. The Japanese enterprises also understand that their success is very much dependent over developing proper working condition for employees. At the same time they are also required to enhance employment opportunity. Due to such understanding unions also cooperate with the management. Opinion of employees are always asked for in case of growth of the company and this process leads employees to believe that they are integral part of the company, resulting in enhancing motivation of the employees. In this context Yasuo Kuwahara has remarked in his essay, ‘Employment Relations in Japan’, “Thus, a key aspect of the work environment in Japanese companies is this interdependence and the belief that the company is a ‘community of shared fate’, where ‘everyone is in the same big family’.” (Bamber, Lansbury and Wailes, 2004, 285) Moreover, difference in the pay scale of white collar employees, blue collar employees and managers is modest and it helps the employee to identify himself with the organization. These are the main reasons that help a Japanese organization to identify and properly utilize the tacit knowledge and skills of an employee for the purpose of organizational learning. Question is raised if it is possible for firms in liberal market to use the same Japanese model of employment relations. Before going deep into the question let us understand the core concept of liberal market in a simple manner. A market is considered as free market if it is devoid of government regulation or intervention of any kind. The government intervention will be there with the purpose of protecting legal procedures as well as norms related to property rights. Since the post globalization era philosophy of management and business has always emphasized on the factors that are followed in the model of Japanese employment relations. Since the post globalization time period it has been observed that modern business world is asking for “liberal democracy and free market capitalism” (Edwards and Rees, 2006, 8) for enhancement of business in a dynamic way. The principles of organizational learning have been emphasized by the business philosophers so that an organization develops adaptability and becomes more flexible. Businessmen of the 21st century have understood the necessity of the free market. Demand has reached to such dimension that World Trade Organization (WTO) and International Monetary Fund (IMF) have also cleared their intention about non-intervention of the government in case of business. In order to develop the quality of organizational learning employees of a company are required to feel that they are integral part of the organization and they must identify themselves to that level. Most of the U.S. and European companies, though they have thought about improvising their policies, have not implemented them yet. Consequently, a difference always exists between the company and its employees. Labor unions of the companies in these countries are not that strong that they cannot provide adequate security to the employees in order to protect their job. In time of recession, most of the employees feel scared to lose their job and they strive to retain it. Motivational factor that has always been provided with an extra importance in the Japanese model of employment relation has just remained at the state of theoretical approach among the Western nation companies. The interdependence between labor union and management of the enterprises is considered as a key success factor for Japanese companies, but if we give a glance at the labor politics of countries like England or U.S.A. we will find that labor unions are keen on rigidly holding on to their stand point. The management of the companies also denies coming under any kind of pressure from the labor unions. Thus, in most of the cases words of the employees remain unspoken. It is important that in a free market management and employees both share a harmonious relationship as well as fight for growth of the company. Except in certain circumstances, such examples have not been witnessed in the employee-management relationship of the western companies. It is not a very good sign for companies, existing in a free market, that hierarchical difference between employees becomes prominent. But most of the companies of western world are just following the contradictory rule. The Japanese model of employment relation clearly follows this rule. Thus the difference between different levels of employees in not that conspicuous and in order to do so difference in payment does not fluctuate to a great extent. On the other hand, if we see the companies of the western nations, we will see that a manager is receiving multiple levels more wage than that of a simple employee. It is said that the manager is earning so much due to his capability and qualification and such difference in salary will surely encourage other employees to work hard. Unfortunately, it has been observed that an unhealthy competitive environment is formed between employees and manager. Such factor is not regarded as a very good instance for the development of a company. Finally, it has been observed though a study more than 60 percent Japanese are happy about their life style but when it comes to citizens of western countries the rate declines to less than 50 percent. (Bamber, Lansbury and Wailes, 2004, 293-94) Thus, it is understood that firms in a free market must follow the Japanese model of employment relation to survive in the market. References 1. Bamber, G.J., Lansbury, R.D., Wailes, N. 2004, International and Comparative Employment Relations, SAGE 2. Edwards, T. and Rees, C. 2006, International Human resource Management: Globalisation, National Systems and Multinational Corporations, Prentice Hall Read More