Japanese corporations increasingly shifting to Western-style management

[Maciamo]

BBC News : Remodelling Japan Inc

Nissan and Mitsubishi, two of the world's most famous car companies, have both stared into the economic abyss in the last five years.

But while one has gone on to become Japan's most profitable automaker, the other remains in deep trouble.

Nissan managed to regain competitivity and even become Japan's most profitable car-maker, thanks to its take-over by the French car-maker Renault, who appointed Brazilian-born Carlos Ghosn as Nissan's new CEO.

Both companies have suffered as a result of potential flaws in the traditional management model.

The first of these is the system of "keiretsu" - companies bundled together to promote each others' business interests.

This system means that companies are often propping up less profitable partners, and can also breed a false sense of security.

These keiretsu (formerly callled zaibatsu), are centered around the group's bank. Nowadays Japan only has 3 major banks, all keiretsu's : Mitsubishi-UFJ, Mitsui-Sumitomo and Mizuho (which includes the former Sanwa and Dai-itchi Kangyo keiretsu banks).

The other defining quality of the archetypal Japanese company is what has been described as a "silo mentality" - employees only concentrating on their narrow responsibilities within their own department.
...
Mr Ghosn introduced something called "cross-functional team working". This encourages dialogue across departments and divisions, engendering what Nissan's Toshiyuki Shiga terms "healthy conflict". It also enables the ideas of younger employees to get heard.

So who does the average Japanese corporation resemble most - Nissan or Mitsubishi?

Seijiro Takeshita, director of Mizuho International PLC, said that Nissan is rare in its radical solutions. He said most companies had the Mitsubishi "gene", although the increased presence of foreign shareholders was forcing them to change, at least in part.

This means that they are reducing consensus management and increasing meritocracy.

But Mr Takeshita argued that the core characteristics of the Japanese model - weak shareholder influence, and a lack of clarity of responsibilities - had not changed.