mathushita case on japans cultural change

7/31/2019 MATHUSHITA CASE ON JAPANS CULTURAL CHANGE

1/8

A CASE STUDY ON

Presented by-Nipon Chakraborty

ALLIANCE SCHOOL OF BUSINESS


2/8

SUMMARY OF THE CASE


3/8

1. What were triggers of culture change in Japanduring the 1990s? How is cultural change

starting to affect traditional values in Japan?

Cultural change in Japan was triggered economic recession in the 1990s.

Rising consumer price index. Falling prices, (capitalist economics debt deflation, debt

holds back both consumer spending and investment). Government push to lower interest rates and stimulatedborrowing. Falling domestic demand at an annual rate of 4%. Decline in industrial output.

Decline in retail sales. Record unemployment level. Even though exports to US and Europe were steady,exports to Asia collapsed 51% during to the economic crisis


4/8

Cultural changes at generation level: Confucianvalues focused on loyalty, high moral and ethicalvalues and set the pathway for relationships with

others in traditional Japanese businesses but thegeneration born after 1964 lacked the samecommitment to traditional Japanese value as their

parents but they grew up in a world that wasricher, where western ideas were beginning to

make themselves felt, and where the possibilitiesseemed greater. They did not want to be tied to acompany for life, they become a salary man.

Traditional ways of doing business and perceptions

of the loyal, hard-working salary-man were slowlybeing replaced by movements towardindividualism among workers. After witnessingolder workers being laid-off during economicslumps, younger generations believed loyalty would

not exist anymore.


5/8

2.How might Japans changing culture influence the wayJapanese businesses operate in the future? What are thepotential implications of such changes for the Japanese

economy

The

characteristic of Japanesemanagement changedThis changing cultural trend would influence the way Japanese

businesses operate in the future as it would have significantimplications particularly for the human resource strategies of

firms. Older styles of recruitment and selection would beminimized. A new employee pool that is focused more onindividualism and self-benefit without the support structures of

paternalistic firms would mean different incentives and payschemes. Japanese firms would also be more open tointernational investors and dealings with businesses and havea more diverse, international workforce allowing employeesoptions for different type of employment contracts wherebythey could choose greater salary to forego company housingand seniority benefits. This affected Japanese business

performance, improving productivity and individual

rewards/incentives.


6/8

4. What is Matsushita trying to achieve with Humanresources changes it announced ? What are the

impediments to successfully implementing thesechanges?

Matsushita is trying to adopt the new western culture so thatthe organization could perform well where there is a gradualshift from collectivism to individualism , Life time employmentto high salary , removing levels of hierarchy based on seniority.

This created a conflict among the minds of the workers as theold workers were not adapted to the new culture where as thenew generation does not want to be paid by one organizationthrough out their life.

This created the organization to incur loss, lay off employees,

selling assets. Since it implemented quickly it had to undergo lots of problems

had they been little slow might the problems might not haveincurred so much as the people might have been adapted to thenew western culture.


7/8

5. What does Matsushita case teach you aboutthe relationship between societal culture and

business success?

It is seen that societal culture and business success areinterdependent to each other . Gradually the culture of theorganization had changed and this led to conflict among theminds of the workers as there was life time employmentsecurity which does not exist anywhere.Due to this changes the

company had to incur loss .laid off employees for the first time,closing of factories and selling huge assets. Now we can understand when there is a conflict between

culture and business the organization would incur losses. Thesame thing happened to Matsushita who recovered from this

losses gradually and started earning profits again from 2004with new innovations in DVD players.


8/8

.

THANK YOU

mathushita case on japans cultural change

Documents