Japan's economic success: Myths, facts and realities

Multinational Business Review, Spring 1994 by Herbig, Paul, Milam, Robert

MYTH: Japanese are much harder workers; they work more than Americans.

FACT: In 1986, the average employee in a Japanese manufacturing company worked 2168 hours on the job; Americans, on average, worked only 1949 hours--the equivalent of five additional forty-hour weeks (Japanese Ministry of Labor 1987).

REALITY: Input and output are being confused. That the Japanese put in long hours and are willing to put in overtime is often pointless since the Japanese worker accomplishes no more than they could have (or a Western worker does) in fewer hours (Cole 1979). Being at work and being seen matter more in a Japanese career than performance. The same amount of output is achieved in both the U.S. and Japan, but in Japan it takes up more of the worker's time (Fallows 1989). The Japanese people work long hours but the density of work done during those hours is considerably less than in an American company. In a study of several thousand workers in the U.S. and Japan, researchers found that Americans exhibited more loyalty to their employers than Japanese did. Even though the Japanese put in more hours, they were found to be substantially less productive than the American workers (Lincoln and Kalleberg 1985).

Much of the "work" accomplished after 6:00 p.m. in Japan is either waiting until the boss leaves or drinking with one's peers (Woronoff 1985). From the Japanese perspective, such 'work' is useful as it aids in bonding and forming coordination relationships with coworkers. For Americans, work is an economic transaction while for Japanese work is living as one is supposed to in accord with the order of society; work is an obligation, an act of allegiance, an expression of loyalty to a Japanese.

The average Japanese salaryman sacrifices family, community, and his personal existence to that of his company. He has no other life, no other identity, than that of his company or governmental ministry. In addition, his work output is no greater than an American worker who works much fewer hours.

MYTH: Japanese believe in lifetime employment for their employees.

FACT: Japanese male full time employees at the top tier companies (keitretsu) and government ministries enjoy lifetime employment. These account for no more than 35% of all Japanese workers and is not characteristic of a majority of Japanese firms, especially small Japanese firms (Schnitzer 1987).

REALITY: Events such as the severe labor shortage, blocked promotion paths and the attitudes of the Shinjinrui (the younger Japanese who want to enjoy Japan's prosperity and not work as hard as their seniors) are quickly eroding even that small part. Women and outcasts are typically excluded; e.g., they occupy almost none of Japan's influential jobs.

Subcontractors and suppliers, those in the second and third tiers, do not have the protection of lifetime employment (lifetime in a Japanese company typically means to age 55). The 'parent firm' helps the subcontractor with supplies, technical assistance, and investments in machinery. It will not, under normal conditions, turn to cheaper subcontractors. But the 'child firm' must accept its role as shock-absorber in periods of economic downturn. Being a shock absorber means accepting lower prices (usually mandated by the parent), larger inventories, and hand-me-down personnel from the parent company. The differential between firms with over 1,000 workers and those with between 10 and 29 is in the order of 100 to 60, even within the same industry (Dore 1987).