JMA has been conducting an annual survey on the current management issues of Japanese companies since 1979, and it is its 28th this year. This is to provide Japanese industrial world with useful information for corporationf strategic planning and business solutions. We will introduce the summery of the survey results presented on October 2006, in this month's issue and in the next.
Continuing from the previous year, the immediate management issue given the highest priority by Japanese companies is "Profitability" (58.8%).However, in the medium to long- term, increase in importance can be seen for "Globalization" (3rd by 2015 from 16th in 2006), "Shareholder Value" (5th by 2015 from 8th in 2006), "Brand Value" (6th by 2015 from 13th in 2006), and "Corporate Philosophy Reinforcement (Vision, way, value, etc.)" (10th by 2015 from 18th in 2006). As the results of these measures are difficult to determine over a single year, their standing is lower in terms of current issues. Although these are important issues that should be undertaken now, it is evident that sufficient measures are not in place at this time. However, it is pivotal that one is making effort at this point or not to address these four issues; it will greatly affect the future long-term growth.
Conversely, "Financial Vitality", the item given highest priority from 2002 through 2004 has moved rapidly down the rankings, indicating that Japanese companies have overcome issues on the financial front.
The 1990s are generally known as the "Lost Decade". The survey inquired as to the adoption status of the 14 policies and measures that represent the US management style since the 1990s. Over 60% of companies have adopted "Reorganaizing Business / Organizations encompassing Subsidiaries & Affiliate Companies (73.0%)", "Revising Evaluation System with Higher Linkage between Individual / Departmental Performance and Pay (69.4%)", and "Revising Personnel System from performance-based grade to job grade (60.9%)". Looking at the degree of contribution afforded by each of these policies and measures, "Clarifying Management Responsibility of Business Department through Company Systems, etc (67.4%)" contributed the most, whilst "Significant Increase in Overseas Ratio for Procurement, Production, Sales, etc. (66.2%)" and "Transition of Personnel Cost to Variable Costdue to Increase in Non-Permanent Employee Raito (63.2%)" also rated highly.
Many of the responses provided by the 60 advisors for this study stated "Business Reconfiguration including Group Companies", "Clarification of Business Responsibilities", and "Increased Overseas Ratio (Procurement, Production, Sales)" as the items contributing most to management. In particular, even in qualitative terms, the clarification of responsibilities contributed to an increased sense of speed and reform in personnel awareness.
This survey inquired as to the policies and measures known as the "Japanese Management Style (total 13 items)" since the 1990s. Items for which the response "Phased Out" exceeded 50% were "Cross-Shareholding (55.1%)" and "Emphasis on Direct Communication than e-mail (55.0%)", and following on, "Emphasis on Long-Term Employment (39.8%)", "Company-wide Participation in Management (38.5%)", and "On-Site Skills Transfer; OJT (38.5%)". From these points, it can be ascertained that many companies attempted to depart from the Japanese management style.
Conversely, in terms of future emphasis, "Increase" in priority applies to the majority of items. The item for which companies have earmarked the greatest priority is "Increasing Middle-Management Capabilities". This stance is also clearly reflected in items concerning Personnel/Education Sectors. However, in terms of the Individual / Organization, 35.4% stated "Decrease" with regards to "Emphasis on Long-Term Employment".
Furthermore, about 20% stated their intent to phase out "Emphasis on Direct Communication than e-mail ("Decrease" | 20.4%)", "Evaluation Valuing the Process ("Decrease" | 19.4%)", and "Company-wide Participation in Management ("Decrease" | 18.2%)".
Now that performance has recovered, questions arise concerning corporate policy in terms of whether to return to or continue with the departure from the Japanese management style.
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