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Group orientation and Japanese business.

As the economies of the Pacific Rim region experience dynamic growth, American business people will have increasing opportunities and challenges for meeting and dealing with the peoples of East Asia.

Crucial to this new relationship is a good understanding of the differences in the socio-cultural values that under lie the differences in the ways people do business on both sides of the Pacific. In this context, the most conspicuous difference concerns the role of individuals in a group. As compared to Americans and Europeans, the peoples of East and Southeast Asia are much more group oriented.

Although there are some significant variations in the character of group orientation among the various cultural groups in East Asia, there is enough commonality among them to make the knowledge of one society useful to the understanding of others.


Whereas in the West the basic unit of society is the individual, in Japan it is the group-not any group, but a group organized on the principles of a biological family. I call this variety of collectivism familistic groupism.

Major characteristics of a biological family are as follows:

* A family is an organic community, where membership is particularistic; that is, who you are is more important than what you can do.

* There is vertical orientation and rank consciousness among the members of a group, where rank is based on age and seniority.

* There is a sense of shared destiny.

* Individuals draw a sense of identity and security from the membership.

* There is mutuality of obligations.

* There is an insider/outsider mentality: harmony and cooperation inside the group, and a degree of animosity toward, and rivalry with, those who are outside of family.

In every society, these traits of a biological family are observed in non-biological, functional social groups such as business firms, schools, and government agencies. In Japan, however, the extent to which these traits are manifest in functional social groups is pronounced.

Individual Japanese belong to small groups such as family, school, or work teams, which in turn constitute larger groups such as business corporations and industrial groupings. "Belonging" here means more than mere membership in the group; individual members draw a sense of identity and security from that membership. Their sense of emotional fulfillment is satisfied by contributing to the welfare of the group, and being accepted by the group is the single most important motivating force for a great majority of Japanese.

In America, successes and failures belong to individuals. It is "my" job, MY responsibility, "my" authority, "my" achievements, and "my" failures. In Japan, by contrast, it is "our" work, "our" responsibility, "our" achievements, and "our" failures. What drives Japanese to work hard for the group's success is their fear of not being accepted by the group as a productive member.

A caveat is in order here: Because Japanese are group oriented does not mean that they are selfless people who place the welfare of others above their own. They are primarily motivated by individualistic and utilitarian concerns-as are individuals in the West-but the particularistic social constraints imposed upon them give the Japanese behavior patterns an appearance of group orientation.


Much of the competitive behavior, and the strengths as well as weaknesses of Japanese business, can be readily explained by the nature of Japan's groupism. The following are some of the major traits of Japan's familistic groupism and a brief explanation of how each of these characteristics manifests itself in Japanese business behavior and practices.

Particularistic Group Membership

Particularism, as contrasted to universalism, means that the particular circumstances or attributes of individuals-for example, age, seniority, school background, gender, or nationality-are considered more important than their universal qualifications-that is, what they can do.

Just as babies are born into or adopted by a biological family, new members of a Japanese corporate family are "born into" (that is, recruited into) the corporate family at the lowest level, usually fresh from schools or universities, and rise in rank and authority within the organization as they grow in age and seniority. Their relationships to the corporate organization are, as a rule, long term that is, they are there until retirement.

Age and seniority are the basic criteria for promotion and salary increases in Japanese companies. Although these criteria are modified more or less by considerations of merit, in a great majority of cases there is a high correlation within a given job classification between age, rank, and salary. And in large corporations and government offices (about a third of Japan's labor force, or two-thirds of the male labor force), career-long employment is a norm.

Particularistic considerations limit Japanese corporations' ability to promote and reward people solely on the basis of their talent and performance. Talented and capable women, minorities, foreigners, and people without proper educational backgrounds tend to be kept out of the higher management ranks of Japanese corporations. Such a waste of human talent is a disadvantage in today's competitive global business environment.

Harmony and Conformity

Yet another important characteristic of Japanese groupism is the emphasis on harmony and cooperation (wa). Members and the groups are "isshindotai," that is, "one mind, same body." Here, "one mind" does not mean consensus in the Western, democratic sense. Rather, it means the absence of dissonance or discord; the absence being obtained by (1) senior members seriously taking into account the views of junior members, but, ultimately (2) lower level members internalizing and accommodating to the wishes of senior members. In the final analysis, then, Japanese wa is closely tied to the authority relationship implicit in the vertical nature of Japanese society.

In a small group such as a business firm, superficial consensus is often found because individual members cannot afford to fall out of line with the group. Working only between 9 a.m. and 5 p.m., or taking all of the 20 legal holidays per year, for example, makes the employee an oddball who does not fit into the overall flow of the group's work pattern. Such an employee must endure the indignity of being called impertinent (namaiki) and left out of the group's decision-making process with undesirable consequences on his or her job assignment and promotion chances.

This insistence on harmony has serious negative consequences. It effectively inhibits individual initiative and creativity. Individual ambition and achievements are often frowned upon by superiors as being disruptive to group harmony and are met with jealousy and even enmity by colleagues. A Japanese group, therefore, is quite capable of effectively stifling spontaneous expressions of individuality.

In the Japanese style decision-making process, the responsibility for making the decision is collective; that is, no single individual is solely responsible for it. For the corporate organization to reach a decision, there must be a consensus (nattoku) of all involved parties. For this reason, decision-making is time consuming and often indecisive. If there is substantial opposition to a proposal, decision-making gets bogged down, and decisions may be postponed or avoided altogether.

The system also runs the risk of prematurely suppressing critical viewpoints. As soon as it appears that a majority position is beginning to take shape, individuals often hurry to embrace that position, often uncritically, just to avoid "missing the boat."

Exclusivism and the Insider/Outsider Mentality

Japanese individuals find identity and a sense of security through their affiliation with a group, most noticeably with a mid-level group such as a business corporation. Their sense of achievement and emotional fulfillment is satisfied by contributing to the welfare of the group and having their contribution recognized and appreciated by other members.

Particularly in a small group, Japanese tend to form a closely-knit, highly-integrated organization in which members are particularistically related to each other with high emotive content; distinctions among individual members are blurred. A clear distinction is made between insiders and outsiders, the latter being treated by the former with indifference or with varying degrees of hostility. The historic root of this mentality may be found in the necessity of feudal villagers to band together and fight their common external enemies. Ordinarily, Japanese show a marked degree of coolness or indifference toward strangers, be they Japanese or foreigners.

This fact makes it doubly important for Japanese to belong to a group and be embraced by it because the outside world is viewed as inhospitable. This insider/outsider mentality is one reason why the lifetime employment system persists in Japan and why the pressure to conform to the group norm is so strong; for most Japanese, the fear of not being regarded as an accepted member of the group is very strong.

With the rapid internationalization of Japanese business, an increasingly larger number of Japanese firms are employing foreign managers, largely in their overseas operations. The insider/outsider mentality produces a strong impediment to effective utilization of these foreign nationals in Japanese corporate organizations. Because of their foreign culture, language, religion, and citizenship, they are not likely to be considered "insiders" no matter how long they work for a Japanese company or how capable they are. And because of the particularistic nature of the managerial selection and promotion system of Japanese corporations, the chances of foreigners taking top management positions in the parent Japanese company are very slim.


The fact that most of Japan's large corporations pursue growth in market shares, rather than larger profits, as their primary goal is now well known in the West. Standard explanations for this strategy include, among others: (1) the long-term affiliation of Japanese managers with the same firm, (2) the pattern of majority shareholding that favors long-term relationships over short-term dividend payments, and (3) the absence of the fear of unfriendly takeovers.

The long-term outlook of Japanese corporate strategy is deeply rooted in the familistic groupism of Japanese society. Thanks to the career-long employment of most Japanese managers, top managers need not worry about their job security when they set in motion long-term investment projects or expensive research and development projects that might hurt the firm's short-term earnings. Since most managers are likely to remain in one corporation for the entire length of their career, they can afford to develop long-term projects, implement them over years, and reap benefits from them. In such an environment, a long-term strategy focused on market share is not only feasible, it's sensible.

The preoccupation with market share is not inspired by economic considerations alone; it has a strong sociocultural root. Japanese corporations are singularly obsessed with the relative standing of their firms within the industry and in the country. This obsession is a corollary of the rank and status consciousness prevalent in Japanese society. Within an industry, each firm vies for higher status. And the status is determined largely by each firm's market share, not its profitability. Within the national economy, a large corporation aspires to attain the status of a "first rate" (ichiryu) company. The public has a very keen perception of which firms are first, second, and third rate, and so on, and this awareness is perhaps the most important single motivational factor for the employees of a given corporation, from top management to the newest recruits.

To be considered ichiryu, a corporation must possess certain key attributes in addition to a respectable market share. These attributes include high-quality employees, respectable corporate goals and strategies, high-quality products, and a socially-responsible attitude of its top management. Above all, the firm should not have a reputation for being greedy and selfish; pursuing profits solely for the sake of profits is one of the quickest ways for a firm to develop such a disrepute.


The knowledge of the group-oriented values of Japanese society-and by extension, of other East Asian societies-is a useful tool for Americans who wish to acquire an understanding of business behavior and practices in this part of the world. No doubt Japan's competitive strength owes a great deal to its group orientation. But groupism also exacts a very high price in terms of the operational efficiency of Japanese business. Since the East Asian societies outside Japan are also more or less group oriented in their value systems, they may be presumed to have strengths and weaknesses that are similar to those of Japan, with, of course, some variations from society to society.
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Title Annotation:Global Business
Author:Haitani, Kanji
Publication:Business Perspectives
Date:Sep 22, 1990
Previous Article:Information systems for managers in a global economy.
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