It has been noted and often criticized that Japanese expatriates, not local
employees, occupy many higher positions of Japanese subsidiaries. Two reasons
are found for this. First, because Japanese management, including human
resources management, tends to depend on “people”, Japanese firms often want to
fulfill higher management positions of their subsidiaries with Japanese expatriates.
In contrast, American management tends to depend on “(global) systems”.
Because American firms utilize worldwide common management systems, including
performance appraisal systems, managers at the subsidiaries, regardless of their
nationalities, can relatively easily supervise, using the global system. The second
reason concerns languages. Many Japanese managers of researched Japanese,
American, and European firms stress that mother languages, which are spoken at
their headquarters, are utilized, when crucial management issues are discussed.
The mother language at American and European firms is English. Almost all
senior-level managers of their subsidiaries can speak English. The mother
language at Japanese firms is Japanese. Many local employees and managers of
the Japanese subsidiaries do not speak Japanese. Therefore, Japanese expatriates
occupy many higher management positions at the Japanese subsidiaries.