NOTE
Production
Management
Vol.15, No.3-March,
2009
What
Can Japan
Work
for the New Global
Standard
Management?
―The
Deterioration
of the Two Leading
Management
Model
in the
World―
Heizaburo
Tsurushima
Taisei Gakuin
University,
Japan
Abstract:
There are two leading management
models in
the world. One is called the hunting people management
model, created by the people who used to live in the forest.
This model is represented
by US, based upon western
culture.
Another
is
called
the
agricultural
people
management
model created by the people who used to live
in the Asian monsoon area represented by Japan. These
two models have recently deteriorated due to the current
complexity of the economy and the society. It is necessary
to create a new management
model combining the strong
points of the two models.
This new management
model is to be called the new
global
standard
management
model and needs to be
announced by current Japanese people.
1. Two world leading
management
model and their
system deterioration
Recent excessive credit creation in US like sub-prime's
issue created a tremendous non performing loan in Europe
and Japan, giving a great fear not only to bankers but also
to business
executives.
This issue realized us that the
world is connected in the economy and the management
field, same as a geographic field
At the same time, a drastic change of the world economy
makes a way of the company management
more difficult
than that of before. This is because the management has to
mange the company, taking it into not only the domestic
situation but also that of US, Europe, and even in growing
BRIC's. into their account.
In order to overcome this difficulty , a role management
model accepted all over the world needs to be established.
Current world leading management
model is called the
hunting people management
model is a model produced
basing upon the western culture causing as Sub Prime
Issues
Another
model is called for the agricultural people
management
model created by the peoples who used to
live in Asian monsoon area where has an agricultural culture back ground. It is known that the former is lead by US and the latter is lead by Japan. The concepts of those two leading models are quite different although hunting people management model is a current mainstream of the world.
Anyway, these two models have contributed to the development of world economy in the past. Nowadays, however, they do not work well in the current complexity of the economy and the society. That is because these models could not solve the recent arising issues and held a lot of the problems as shown below.
2. Hunting people Management Model•cUS and its virtual business
Difference between the hunting people and agricultural people in their behavior is whether they are active or passive. The hunting peoples were very active in a behavior as if American driven out Native American to the West in the past. This behavior is carried over to the current hunting people's management model in US as if they make money very aggressively like sub-prime issues. 2-1 The short-term thinking makes the company management weak
Since the hunting people hunted to get their meal on that day, they did not possess the patience to grow the crops in long term as agriculture people did. This tendency is carried over to the recent US management way which seeks for the profit in short term. For example, they seek for maximum ROE (Return on Equity) in first priority index, when the stockholder makes the investment In order to increase ROE, the stockholder asks the company try to cut down R&D investment and personnel cost, otherwise they can not get the maximum dividend from the company.
This is similar that the hunting people try to get maximum game (dividend) by hiring excellent hunting
dog (employed president), and to minimize the investment cost of the bow and the arrows (monetary investment).
If the company tries to keep increase the dividend to the stockholder, it will lead to reduce their internal reserves and make their financial constitution weak.
2-2 Moneymaking by the Monetary Economy•c virtual moneymaking.
The hunting people may be killed by the others on attack unless they beat the others. This will mean that the hunting society is not peaceful like as agricultural society.
The recent hedge fund and the derivative, popular for wealthy people were very aggressive by any use of the hunting people's technique. They try to get maximum profit by defeating the competitor by any use of the high financial technique. This model focuses on the monetary economy to make a fortune at stroke by intelligence, although the real economy focuses on the real production and the real servicing when getting money. I wonder if the outcome by the hedge fund and the derivative can produce some goods and service in the society or not.
We should realize that the monetary economy did not increase any real product and real service, nor any wealth of the world. It is an easy money, differentiating from the true wealth earned on the real economy by the sweat.
2-3 The Differential Society creating the winner and the loser
An agricultural society is an equality society in which everybody works in collaboration on the schedule. On the other hand, the hunting society is the differential society in which the winner and the loser will be born by the degree of the hunter's talent. In recent global economy, the productivity increased remarkably due to the smooth movement of the management resources such as manpower, goods, money through the world.
Therefore, it makes a clear distinction between the winner group who has a lot of management resources and the loser group who does not have many management resources. Although it is a good society to recompense for a talented and a harder working people, the problem is that the only a very few people can become the winner and many the people become the loser even if they have a high technology and a good business model.
At the same time, the labor market has a similar phenomenon which has big salary difference between the general workers and the elite business person. In 2005, it is reported that CEO earned 262 times higher salary than that of average workers in US. I am afraid if this fact
might cause a social problem in US in future.
3. Agricultural peoples management model•c Japan and its positioning falling down
In the agricultural society, people works in a group to defend for the attack of the enemy rather to strike the enemy like as the hunting people does. Japan has been an agricultural society from an ancient time and it still keeps agricultural style well in recent management style known as "collaboration".
3-1 The convoy system cause a low productivity
Japanese company has been very successful in the management style after the World War II due to the style of working in group. This management style becomes too exceed, however, it creates the illogical equality system like as "no one left behind" in the convey system. The convey system created a society of less competition in which a low productivity company could survive.
In the banking industry of Japan, for example, a deregulation called "The Big Bang" by the Ministry of Finance caused the some big banks to merge with the foreign banks due to less productivity. The agricultural management model weakness is that the company could not survive due to the weak competitive power in the mega competition age known as the "global standard."
Under these situations, the relative economical position of Japan has leveled down remarkably. The order of the nominal GDP/person of Japan came down from 2nd in 1993 to 18th in 2006.
3-2 End of a catch-up age and recent weakness of the economical power
Peoples of the agricultural society have been working under the predetermined procedures every season, every year. Under this society, the precedent was esteemed and the people worked under getting the consensus of the group people. It was a very effective management model when the catch-up age had continued in Japan at high economical growth time
Japan had been grown up to be 2nd largest economy country, mostly by best practicing the western political and economical system in 20 century.
When Japan became a top runner in economy, however, they lost any target of the good imitating model and then, their economical power became weak. At this moment, therefore, an agricultural people's management model might be difficult to lead the world economy due to less