Dr. Myron Tribus pointed out that an important difference between Japan and the Western world lies in the way a corporation is regarded by its stockholders and its employees. In Japan, the physical assets of a company are not thought to belong exclusively to the stockholders, who are regarded as silent partners of the managers and workers. Profits are allocated, often equally, to the shareholders, to reinvestment, and to management and workers. Japanese stocks seldom pay dividends of more than 3% since Japanese investors are interested in long-term capital growth more than in dividends.
If there is a downturn in Japanese business, the dividend is decreased, then decreased again. Then, management takes a cut in pay and finally, the hourly workers are given a cut. No one is turned out. A business downturn in most U.S. companies would usually precipitate actions in the reverse order: layoffs first and cuts in dividends last.
When top management is obsessed with figures relating to short-term financial gains, the goal communicated to the production workers tends to be to produce as much as possible without consideration of quality of output. But others in the company-quality assurance inspectors, far example-may have goals that conflict with production by the numbers. The result is dissension, disagreement, and an increase in the normal discontent found in employees who work in a "production goal" environment.
Discussion Assignment
Discuss the following questions in class or outside of class with your fellow students:
I. Which approach to doing business (Japanese or U.S.) makes the most sense from the perspective of global competitiveness?
2. Is the Japanese approach possible in the United States? Why or why not?