The Japanese Automotive Way

The recent history of the automotive industry in South Asia is also largely the history of Japanese automakers’ presence in the region. As a result, many members of the automotive fraternity, comprising assemblers, vendors, dealers, and other stakeholders, have adopted some of the distinctive features of Japanese production methods, marketing, and even personal conduct. The key to successful Japanese management practices is the workplace culture, which places paramount importance on human relationships. The days of the Shogun emphasized a strict value system, and the teachings of Confucianism from the mainland stressed the traits of affection, respect, loyalty, harmony, and trust. Likewise, the contemporary Shinto attributes of traditions, family, and adherence to cleanliness have been imparted to Japanese society and have also been translated into business practice.

The Japanese way – particularly the way of the Zaibatsu (a Japanese term referring to industrial and financial business conglomerates) or the Sogo shosha (a Japanese trading house) – is unique. Decision-making is slow, making patience an essential attribute of the Japanese business executive. Through the process of nemawashi and Ringisho, decisions are firm and conclusive. Nemawashi is gaining informal consensus through meetings with the proposal’s originator. Ringisho, popularly known as Ringi, is the formal process or the system through which the proposal is circulated from the bottom up to the various layers of management. In this way, decisions are made by consensus. A seal is affixed on the proposal from each stakeholder, indicating approval. Although the seal may not be affixed to computer communication, the tradition continues with new apps such as i-mode, a mobile-friendly Ringi solution developed by NTT Communications, a Japanese telecommunications company.

Japanese management practices are very different from the business practices of South Asian countries, especially in the colonial past, having received training from “Western” top-down management methods. The “Western” way recognizes a more centralized authority and individual excellence. Hence, the Japanese management way faces many challenges. For example, changes in market dynamics and political and economic scenarios are frequent and, at times, sudden. Japanese managers are slow to react due to the slowness of the consensus-building process. The hiring process of new staff and promotions to performers also brings challenges in a job-for-life, structured HR environment. Nevertheless, the Japanese automakers have brought over some parts of their corporate culture over time, sometimes creating a fusion with the local practices. Surely this “fusion” may have something to do with the Japanese corporate presence in the region that can be traced back to the 1950s.

The Japanese automotive companies have an ‘open eyes’ policy. Their office layouts are without walls or partitions. The staff sit in one large hall, with each departmental head facing his entire team. They wear uniforms, use one canteen, and have shared toilets. All employees must clock in on time, greeting the day with exercises and morning meetings. Emphasis is placed on things like cleanliness and orderliness, processes, teamwork, and lifetime employment (until the retirement age of 55). Employees are promoted to higher positions within the company, ensuring employment stability. Older employees are supported with seniority-based rewards, younger ones with on-the-job training, and skill development is achieved with a job rotation system.

The Ringi system is an integral part of the consensus-based decision-making process. Familiar Japanese management systems such as Kaizen (continuous search for improvement) and 5-S manifest the Japanese management style. All employees are encouraged to suggest ways for the company to improve.

Japanese automotive companies’ outlook towards their employees, JV partners, distributors, and dealers is about building a long-term association. Training in the Japanese way is paramount. In adversity, the companies stand by their partners, a trait in their value system and history.

The Japanese automotive companies operating in the region have successfully implemented most of the abovementioned practices. Some concepts have been adopted by selected component makers and automotive dealerships representing Japanese brands.

Such is the Japanese automotive way