2nd Case Study - Matsushita (Panasonic) and Japan’s Changing Culture PDF

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Matsushita (Panasonic) and Japan’s Changing Culture...

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RHEE C. LIGUTAN MPBM-2 (BUSINESS Administration) GLOBAL BUSINESS MANAGEMENT

Matsushita (Panasonic) and Japan’s Changing Culture A Case Study

1. What were the triggers of cultural change in Japan during the 1990s? How is cultural change starting to affect traditional values in Japan?  During the 1990's, Japan economy began to slow. The prolonged economic slump forced may Japanese companies to abandon their tradition ways of doing business like lifetime employment. This caused younger people just entering the workforce to question whether the loyalty that workers had traditional given companies, and that had been traditionally reciprocated, made sense. Many younger people concluded that it no longer made sense to be tied to a single company, that instead it could be beneficial to take advantage of new opportunities when and where they rose.  The difference between the generation born after in 1964 and their parents is the change in the Japanese culture. In addition, Japan's companies need many younger staff that has more creative and dynamic than older employees. Moreover the companies want to abandon lifetime employment. It led to a change in the traditional values in Japan.  These are the following cultural change starting to affect traditional values in Japan. -Change in perceptions of traditional workplace orientation, lacks of trust. -Younger generation exposed to necessary business culture compromise. -Shift from collectivist to individualist values.

2. How might Japan’s changing cultural influence the way Japanese businesses operate in the future? What are the potential implications of such changes for the Japanese economy?

 This changing cultural trend would influence the way Japanese business operate in the future as it would have significant implications particularly for the human resource strategies of firms. Older styles of recruitment and selection would be minimized. A new employee pool that is focused more on individualism and selfbenefit without the support structures of paternalistic firms would mean different incentives and pay schemes. Japanese firms would also be more open to International investors and dealings with businesses and have a more diverse, international workforce allowing employees options for different type of employment contracts whereby they could choose greater salary to forego company housing and seniority benefits. This affected Japanese business performance, improving productivity and individual rewards/incentives.

3. How did traditional Japanese culture benefit Matsushita during the 1950s-1980s? Did traditional values become more of a liability during the 1990 and early 2000s? How so?  Japan's traditional culture helped Matsushita become a major economic power during the post-war years and through the 1980's. Matsushita agreed to take care of its employees for life providing benefits such as subsidized housing and retirement bonuses in exchange for loyalty and hard work. However, the prolonged economic slump that began in the 1990s made these commitments difficult to keep. Matsushita was saddled with expenses and no real way to cut them. It is similar to the more recent challenges of GM to maintain the commitments it had made to its older workers.

4. What is Matsushita trying to achieve with human resource changes it has announced? What are the impediments to successfully implementing these changes? What are the implications of Matsushita if: (a) The changes are made quickly (b) It takes years or even decades to fully implement the changes?

 The human resource changes it has announced, Matsushita is trying to achieve a younger workforce that is encouraged with individuality, initiative taking and risk seeking. It wants its young managers to become rational and logical, ambitious and aggressive, and at the same time to create an organization that can carry out their ambitious plans. One of the impediments to successfully implementing these changes is the lifetime employment commitment, which held Matsushita back from cutting off unnecessary management staffs. Also the existing managers are performing poorly because of their old way of doing things. Again, since it cannot lay workers off, it has to cut back on its hiring and this is triggered by the slow growth rate. a) If changes are made quickly, the company would have dynamic workforce that would increase the growth rate. But that would lack the loyalty of the employees, is still a very strong force to keep the company going. b) It Matsushita takes too much time; it might fall back and become unable to revolutionize its workforce. If old employees do not make way for new employees, the company will have a slower growth rate with an aging workforce.

5. What does the Matsushita case teach you about the relationship between societal culture and business success?  Societal culture and business are strongly intertwined. A society culture has a direct impact in a company’s culture. The values and the tradition that are important in societal culture will typically be important in corporate culture as well. As societal culture changes overtime, so should company culture. However, changes in the business environment can also prompt changes in corporate culture which can then begin to influence societal culture as well....