Management - Other

Differences between American and Japanese Management Systems

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The interest in Japanese management systems arose from Japan’s productivity levels and production standards. In light of that, several business researchers sought to identify what factors made Japan a world leader in quality and productivity. The results of studies have highlighted critical differences in management and culture; these factors are most critical in explaining the stellar performance of Japanese companies.

The differences between the two systems of management are as clear as east versus west. Theorists like William Ouchi (Theory Z) and Peters and Waterman (Excellence theory) actually developed contemporary management theories based on these perceived differences. These theories helped American companies learn and apply some techniques, concepts and aspects of culture that affect business performance.

• Influence of theories

American and Japanese management systems have fundamentally different assumptions about workers. Peters and Waterman suggested that American management systems are based on the assumptions of Scientific Management, while the Japanese approach factors in a hybrid approach that accounts for human, technological and work elements. In terms of McGregor’s Theory X and Y, American management systems have a Theory X approach, while the Japanese management system has a Theory Y approach to workers. Theory X assumes that workers are unwilling to work and are economically motivated, while Theory Y assumes that they are motivated to work and seek rewards other than money.

• Individual versus collective culture

One of the differences in systems is the culture and style of management. The culture of Japan is identified as a collective one, whereas American society is typically individualistic. This affects the focus of managers, since a manager who behaves for the collective good has a fundamentally different view from one who is self-interested and concerned primarily about their own welfare. This difference often manifests itself in the treatment of workers. In the American style of management, subordinates’ needs might be overlooked because managers fear that using miscellaneous budgetary allocations would make them look wasteful. The Japanese style of managers advocates concern for the welfare of the group. 

• Best practice versus continuous improvement

Consistent with the American management approach is the development of a "best practice" or standard. Once this standard or best practice is reached, it is merely repeated. Although there is scope fore improvement in that system, it usually occurs through business process re-engineering. According to, the Japanese management favors continuous improvement. While they settle on a standard, everyone is committed to improving this where possible. One spin-off of this is that there is no passing of the buck in terms of responsibility. Specialization is common, but everyone is committed to improvement efforts; workers go beyond in exercising initiative.

• Promotion and advancement

In American systems, rapid advancement based on merit and qualifications is customary. While the Japanese system values meritocracy, it rewards long service and dedication. In the Japanese management set-up, it is unlikely that a new recruit would quickly advance above dedicated, competent workers.

• Encouragement of loyalty

Stability of tenure is an enduring feature in the Japanese system; it actively encourages it. In the American system, there is a higher turnover in management and workers in general. Company loyalty is valued highly and rewarded in the Japanese system, so it does not suffer from the dreaded “brain drain.”

Apart from differences in styles and approaches to management, some of the differences between the American and Japanese systems of management arise from culture and issues related to organization structure. However, these are critical to management as well. After all, management is an eclectic field with many influences on it.

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