Japanese management structure has also been shown to be much flatter when compared with Western structure. To some extent, in the 1980s and early 1990s, Western firms began to adjust to a flatter structure in order to become more cost‐competitive. This has often involved the removal of the various layers of middle management. However, Japanese structure still differs fundamentally from other models such as found in the UK. For example, specialist firms are embedded in elaborate networks of mutual commitments which reduce their autonomy and ability to change suppliers, customers and industry quickly. In addition, there is a high level of managerial autonomy from shareholders. Managerial élites are isolated from the market for corporate control and can afford to ignore short‐term capital market pressures. There is a low level of shareholder control and a desire by management to increase market share.
This is in contrast to Western cultures, where other objectives including profit maximisation, the maximisation of perks and the playing off of various coalitions become important. Furthermore, internal mobility within Japanese companies is high, rather than mobility from company to company, which takes place more in Western cultures. There is also heavy investment in skills; there has been support and financial incentives from government to support industries. There is a further link between Japanese banks and state agencies in contrast to Anglo‐Saxon countries. The commitment to the Japanese company by the workforce leads to decentralisation of decision making and flexible control systems, which rely on trust. This makes or allows for the possibility of changes without major external shocks.
The South Korean organisation structure known as the Chaebol has some similarity to the Japanese approach, though differs in the following ways. The Korean approach takes a more patrimonial approach to management; there is more limited trust, similar to Western firms. The strong influence of family ownership in the decision‐making process allows for a highly centralised decision‐making process; subcontracting is used much less than in Japan. However, large Korean firms are similar to Japanese firms in that they focus on very specific activities. Western manufacturers, particularly in the UK, have begun to focus on smaller units though will adjust to small‐scale production of alternative products if a market was to materialise. There is a lack of investment in high technology. Anglo‐Saxon firms, however, have yet further similarities to Korean firms in that labour turnover is more apparent in both, less like the Japanese approach discussed earlier. In contrast, expatriate Chinese family businesses are a common unit in Taiwan and Hong Kong; and most of the activities of East Asian units are specialised, with extensive reliance on subcontractors. Like the Japanese, these firms are dependent on trust relationships. There is also the reluctance to rely on bank loans or selling shares on stock markets.
Dependence on the state tends to be lower in Taiwan and Hong Kong. Their respective governments are less likely to intervene than in the case of Japan, as was seen in the recent response by Japan of injecting large sums of money into the economy to cope with the recent downturn in economic activity, as well as tax cuts. However, recent evidence from Rodrik (1995) has found that the explanation for growth in Asian Tiger countries, especially Korea, was due to the government encouraging high savings rates, as well as by encouraging firms to be more export‐oriented. It could also be argued that the reduced reliance on government and the support of key industries experiencing market saturation, such as cars and electronics, helped to shield countries such as Taiwan from the current downturn in activities in these markets.
Evidence has also been incomplete in a variety of other ways. For example, it is not clear that one can suggest a Western model of organisational structure or an Eastern model for that matter. As has been shown earlier, there are some similarities between Korea and the Japanese model but also other similarities to Western countries. In addition, Western models have their own distinctive features. For example, in Italy, the importance of the family business is often emphasised. In Germany, the shareholder has less influence on the organisation structure, which shows similarities with the Japanese approach. The UK approach, on the other hand, is much more like the US approach, where short‐term influences and shareholders’ activities have much more influence on the organisation process.
In a similar way, many influences from other countries such as Japan are having an effect on Western organisation structure. For example, control over suppliers is an objective that all countries wish to achieve. Indeed a number of Western firms have tried to exert more control, whereas others have attempted to use more competing suppliers. Indeed the globalisation process and the flattening of organisational structures to become more efficient are having much influence on activity, and various traits are being adopted from all organisational approaches. However, some fundamental differences remain, particularly concerning issues of trust.
Japanese management structure has also been shown to be much flatter when compared with Western structure. To some extent, in the 1980s and early 1990s, Western firms began to adjust to a flatter structure in order to become more cost‐competitive. This has often involved the removal of the various layers of middle management. However, Japanese structure still differs fundamentally from other models such as found in the UK. For example, specialist firms are embedded in elaborate networks of mutual commitments which reduce their autonomy and ability to change suppliers, customers and industry quickly. In addition, there is a high level of managerial autonomy from shareholders. Managerial élites are isolated from the market for corporate control and can afford to ignore short‐term capital market pressures. There is a low level of shareholder control and a desire by management to increase market share.This is in contrast to Western cultures, where other objectives including profit maximisation, the maximisation of perks and the playing off of various coalitions become important. Furthermore, internal mobility within Japanese companies is high, rather than mobility from company to company, which takes place more in Western cultures. There is also heavy investment in skills; there has been support and financial incentives from government to support industries. There is a further link between Japanese banks and state agencies in contrast to Anglo‐Saxon countries. The commitment to the Japanese company by the workforce leads to decentralisation of decision making and flexible control systems, which rely on trust. This makes or allows for the possibility of changes without major external shocks.The South Korean organisation structure known as the Chaebol has some similarity to the Japanese approach, though differs in the following ways. The Korean approach takes a more patrimonial approach to management; there is more limited trust, similar to Western firms. The strong influence of family ownership in the decision‐making process allows for a highly centralised decision‐making process; subcontracting is used much less than in Japan. However, large Korean firms are similar to Japanese firms in that they focus on very specific activities. Western manufacturers, particularly in the UK, have begun to focus on smaller units though will adjust to small‐scale production of alternative products if a market was to materialise. There is a lack of investment in high technology. Anglo‐Saxon firms, however, have yet further similarities to Korean firms in that labour turnover is more apparent in both, less like the Japanese approach discussed earlier. In contrast, expatriate Chinese family businesses are a common unit in Taiwan and Hong Kong; and most of the activities of East Asian units are specialised, with extensive reliance on subcontractors. Like the Japanese, these firms are dependent on trust relationships. There is also the reluctance to rely on bank loans or selling shares on stock markets.Dependence on the state tends to be lower in Taiwan and Hong Kong. Their respective governments are less likely to intervene than in the case of Japan, as was seen in the recent response by Japan of injecting large sums of money into the economy to cope with the recent downturn in economic activity, as well as tax cuts. However, recent evidence from Rodrik (1995) has found that the explanation for growth in Asian Tiger countries, especially Korea, was due to the government encouraging high savings rates, as well as by encouraging firms to be more export‐oriented. It could also be argued that the reduced reliance on government and the support of key industries experiencing market saturation, such as cars and electronics, helped to shield countries such as Taiwan from the current downturn in activities in these markets.Evidence has also been incomplete in a variety of other ways. For example, it is not clear that one can suggest a Western model of organisational structure or an Eastern model for that matter. As has been shown earlier, there are some similarities between Korea and the Japanese model but also other similarities to Western countries. In addition, Western models have their own distinctive features. For example, in Italy, the importance of the family business is often emphasised. In Germany, the shareholder has less influence on the organisation structure, which shows similarities with the Japanese approach. The UK approach, on the other hand, is much more like the US approach, where short‐term influences and shareholders’ activities have much more influence on the organisation process.In a similar way, many influences from other countries such as Japan are having an effect on Western organisation structure. For example, control over suppliers is an objective that all countries wish to achieve. Indeed a number of Western firms have tried to exert more control, whereas others have attempted to use more competing suppliers. Indeed the globalisation process and the flattening of organisational structures to become more efficient are having much influence on activity, and various traits are being adopted from all organisational approaches. However, some fundamental differences remain, particularly concerning issues of trust.
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