International Industrial Relations - Convergence and Divergence

Japan’s unemployment rate of about 4% opposed to the U.S. unemployment rate of close to 10%. Even the financial debt to GDP ration is an advantage, and debt in the private sector has not increased unlike the U.S. and European countries, (Time, 2009). In addition, since Japan is a huge exporter and with the U.S. demand going downward, the international balances and growth declined especially as the dollar value dropped and the yen surged. •

Business cultures between USA and Japan vary immensely the American’s are quick to make decisions and allow many juniors to make decisions of their own accord, although many errors can be caused because of the leeway given. In comparison to Japan where business decisions are a lot slower and given a lot of thought. Japan will avoid all risks possible and all business decisions are made following a corporate hierarchy. This entails many meetings and numerous records to minimise any errors so they can deliver consistency at all levels.

EXECUTIVE SUMMARY The case on Chiba International Inc. deals with the challenges faced by a Japanese company¶s manufacturing plant set up in rural Georgia to adapt the philosophy of the company to its American workforce and culture. Ken Morikawa, the general manager for administration and John Sinclair, the American personnel head of the company are determined to find out how Chiba International, another Japanese company based in California, has successfully translated its corporate philosophy into action that has led to considerably good profits for the company. Ken, having had extensive experience in the field of personnel management is perplexed about John¶s desire to translate the company¶s Japanese philosophy to suit the American

The ever changing industrial needs can be the reason of globalisation, the change in needs of people, the change of thoughts about going from the short term benefits rather than the long term benefits are few of the many reason the way business has transformed. But the industrial relation and human resource are the two major components of the business which has not changed much. Industries sure are dependent on the customer, but they are also dependent of their work force and employees. There is always a need to perform coordination between the industrial needs ad employee needs thus many organisation and countries have brought in changes to their system and they have revamped the employment relations according to the changes. The

Multinational companies have long wrestled with the challenge of effectively governing and managing a global workforce. Striking the right balance between a globally consistent strategy and local flexibility requires ongoing monitoring, supported by a keen understanding of local regulations, cultures and demographics.

In the 1970s and 1980s, the U.S. economy was under great threat from the efforts of Japanese efficiency. Many solutions having to do with tariffs and other import restrictions were implemented to give American industry time to catch up. One of the major areas that American industry felt it had to change was to copy Japanese management techniques and strategies.

Zaibatsu, the prevailing form of business declined after the Second World War, followed by an economic reform, a new business management form has emerged, which is the Keiretsu system. It continued to be the dominant form of business in the second half of 20th century, yet, the economic recession of Japan in1990s has made people realize the incapability of the old Keiretsu system, reforms of it is needed for revitalizing Japan’s once flourish economy. This paper will examine the role of Keiretsu system in Japan’s economy in detail and discuss the future development of the system.

National companies do not become global companies immediately. Involvement in international HRM depends greatly on a company 's phase of globalization. Import-export firms. Firms in the first phase of globalization simply move products across national boundaries. The firm does not employ people in other countries, except a few managers responsible for negotiating business agreements. These agreements usually involve buying or selling complete products or services. Import-export firms need to understand their trading partners ' cultures and usually must overcome communication barriers to negotiate agreements. Negotiations are usually done by expatriate representatives, but expatriates are not employed as extensively by import-export firms as by multinational enterprises. HR policies and practices remain relatively unchanged from the company 's traditional home-base practices. (HR Magazine,06-01-1995)

From 2006 to 2007, Japan’s inflation rate took a rapid increase from negative inflation in 2006 to positive inflation rate in 2007. This sharp increase in inflation rate was likely to be due to the world’s shortage of rice crisis. As rice is Japan’s main source of stable food, the rice crisis push up rice prices globally, causing the inflation rate in Japan to rise sharply. Currently, there are speculation that Japan’s inflation rate may rose at the fastest pace in the decade as companies facing the global economic crisis may pass higher costs to consumers.

The first is the country of origin to transfer its practices to the ‘host country’ activities; that is what often called ‘cross national isomorphism’ (Ferner, 1997). Accordingly, this strategy may entail the installation of dominant systems of training, work organisation and recruitment in ‘host countries’. For example, where the parent company attempt to impose its policies about the training and development of its workforce, training schemes and the need for skilled employees in an MNC are aligned with those of the parent company. Furthermore, it is widely accepted, that in a MNC which adopt and embrace an ethnocentric approach, cultural values and corporation’s strategy of the country of origin are predominant, whereas the company assumes that such an approach would be advantageously for the firm and that their subsidiaries ought to discipline and follow the same patterns (Francesco and Gold 1998). A representative example of such an approach are the Japanese corporations, since studies have shown that they seek to impose their policies and practices in their MNCs and enforce their rules (Kopp, 1994). However, ‘ethnocentricity’ merely underestimates what Ferner (1997) suggests, that the transfer as long as the embodiment of ‘home country‘ practices, such as organisational structures, processes and procedures could be either adopted from the ‘host’ country’s systems and regulations or neglected. The second alternative implies a radically divergent strategy where

The advent of new forms of employee management, such as HRM, alongside shifting industrial structures to a service-dominated economy, declining trade union power and influence, political antipathy towards the union movement, greater individualisation and flexibility in the management of labour and changing social attitudes have created a more diverse employment landscape. Employment relations in certain countries changes over time by several factors

International organisations differ in their strategy development practices and processes, based on their approach to internationalism as either ethnocentric, polycentric, geocentric or regiocentric. All are faced with market forces and changes within their sectors, dependant on the cultural and institutional drivers, prevalent in their operational country and in those of country of origin (Farndale & Paawe, 2007). At a global level, human resource (HR) practices are found to be similar in competitive contexts, whereby organisations benchmark practices and processes against similar organisations appearing to operate successful HR policies which are driven by best practice and technology availability, in areas such as: recruitment and selection, reward structures, performance management, succession planning, expatriate management and training and development. Notwithstanding this, competitive advantage is derived from differentiation of organisational culture, structure and strategy and combining leverage derived from human capital (Shen, 2011; Slocum, et al., 2014). The rapidly changing global arena has forced many organisations to adopt an increasingly dynamic approach to performing business by adapting their environment for flexibility, innovation, creativity or cost effectiveness, in order to manage constant changes to organisations in terms of technology, the ascendancy of knowledge workers, worker diversity and the need for constant improvement to meet changing customer

Japan enjoyed a period of high productive development since the end of World War II. It boomed in the late 60’s and 70’s and then came to an immense halt in the 80’s and 90’s and still vacillating today. Since the beginning of 60’s, Japans growth has been called a “post-war economic miracle” (11). This is because, in that time, they had an “average growth rate of 10% in the 1960s, 5% in the 1970s, and 4% in the 1980s” (11). In this time, according to Richard Katz in his book “Japan: The System That Soured” the Japanese government applied a “developing country strategy” which involved very low interest rates so that Japanese companies, that during that time, needed money to start up their businesses, could take out loans at a extraordinarily cheap price (10). They also used a system called WAT. This system was “a peer-to-peer complementary currency system” (12) which would “allow for small businesses to issue IOUs (called WAT-ticket) to their suppliers” (12). This allowed for a “high-cost structure” (10) where “efficient manufacturers and inefficient service-related sectors” were able to “co-exist” (10).

Economic liberalization in the world has led to the expansion of many business organizations on a global scale. This global economy has in turn increased the number of cross-cultural interactions among various multinational companies. Globalization refers to a process which deals in developing relatively standardized products with global appeals, as well as rationalizing operations throughout the world (Barto and Martin, 1998). To achieve these objectives, organizations require sending their selected representatives for overseas assignments to keep a check on the standards of their products and services abroad. Human resource experts all over the world agree that it is essential for any Multinational Company (MNC) to select, train, develop and retain employees who can work and live efficiently beyond their national boundary (Caligiuri, 2000).

The development of technology encouraged the world to develop co-operative projects to facilitate the technology that benefit countries in economic growth. This requires work ethics and technological skills that are dominated by the Eastern especially Japanese citizens. It has been proven that the Eastern economy was developing remarkably during the 70s and early 80s.