Professional Documents
Culture Documents
Contents
1. Introduction ....................................................................................................................... 3
1.1. Objective and object of the paper ............................................................................... 3
1.2. Sources of data and methods of research .................................................................... 4
1.3. Content and the structure of the paper ........................................................................ 4
2. Japanese Business Ethics ................................................................................................... 5
2.1. Working ethics of Japanese people ............................................................................. 6
2.2. Bushido codex ............................................................................................................. 7
2.3. Japanese lifestyle ........................................................................................................ 8
2.4. Short history of Japan ................................................................................................. 9
3. Japanese company outside the Japan ............................................................................... 10
3.1. Toyota company outside Japan ................................................................................. 11
3.2. Sony company outside Japan .................................................................................... 12
3.3. Other Japanese companies outside Japan ................................................................. 14
3.4. Japanese stock market ............................................................................................... 15
4. Foreigners working in Japan ........................................................................................... 18
4. 1. Foreign companies doing business in Japan ............................................................ 19
4.2. CEO salaries in Japan with comparison to other countries....................................... 21
4.3. Business climate for non-Japanese companies in Japan ........................................... 22
4.4. Competing on the Japanese market .......................................................................... 24
5. Kaizen method ................................................................................................................. 27
5.1. History of Kaizen method ......................................................................................... 29
5.2. Toyota and kaizen method ........................................................................................ 31
5.3. Implementation of kaizen ......................................................................................... 33
5. 4. Kaizen outside Japan ............................................................................................... 35
6. Conclusion ....................................................................................................................... 38
1. Introduction
Japan is one of the richest and developed countries in the world with top hand in
technology and trading. Japan is the place for many notable companies birth, and gives
engineering services worldwide; there are thousands of Companies of Information
technology, Banking, Automotive, Engineering, Retail, Communications and Electronics.
Japan has trading links with most countries on earth and exporting electronics and
automobile products, and most of the companies with huge revenue are from Automotive
and Electronics. Companies in Japan have a deep history of the 1st and 2nd World War,
Japan is faces natural disasters every year such as earthquake, tsunami, although the
development continues constantly. Business ethics has the key role to reform Japanese
business. For past 18 years, Japan Society for Business Ethics has tried to popularize
business ethics in Japan. Although the general recognition of business ethics has improved,
there is also a certain hesitation and scepticism over adopting business ethics as a
discipline and practical program.
and
their
management,
focusing
on
their
internationalization
and
companies. In Tokyo, it is common for many employees to work twelve or more hours a
day in certain industries, despite contracts claiming an 8 hour work day.8
10
preserving lost honour. During Samurai times loyalty was thought of as being more
valuable than life itself.
Bushido teaches that men should behave according to an absolute moral standard, one that
transcends logic. Whats right is right, and whats wrong is wrong. The difference between
good and bad and between right and wrong are givens, not arguments subject to discussion
or justification, and a man should know the difference. Finally, it is a mans obligation to
teach his children moral standards through the model of his own behaviour.11
Bushido ethics enjoyed a revival during World War II as a way to build up Japanese
military fighting spirit. It was particularly reinforced among the fighting forces as a means
of portraying the value of self-sacrifice and loyalty, and reached its apotheosis with the
self-sacrifice of the kamikaze pilots.
http://www.tourism4peace.com/off-the-beat-path/typical-japanese-lifestyle-in-tokyo/ , Retrieved:
13/02/2014
13
Kimonos, which are generally made of silk have large sleeves and reach from the skoulders all the way
down to the heels. Kimonos are now usually worn only on special occasions, such as wedding and graduation
ceremonies. The price of a kimono can range from around 10,000 yen for a simple set made of cheap fabric
to millions of yen for a luxurious silk outfit with intricate embroidery or yuzen designs.
14
flower arrangement
15
Japanese guitar
furniture only came into widespread use after the late-nineteenth and early twentieth
century.16
the territory of southern Sakhalin (Karafuto) and Russia's port and rail rights in Manchuria.
In World War I, Japan seized Germany's Pacific islands and leased areas in China. The
Treaty of Versailles then awarded Japan a mandate over the islands.17
10
20
http://www.toyota-global.com/company/profile/facilities/worldwide_operations.html , Retrieved:
05/01/2014
21
http://www.bbc.com/news/business-25860234 ,Retrieved: 08/01/2014
11
22
23
12
these LCD panels. These major corporate movements have allowed Sony to become the
major player they are today in the global technology sector.
Sony Europe is the regional consumer electronics and professional equipment and services
organisation for Sony Corporation of Japan. Sony has operated in Europe since 1960 when
it set up a satellite office in Switzerland to service to whole of the European marketplace.
In the 1970s, individual sales companies were set up in Europe either by acquiring an
existing independent distributor, or by setting up a new operation, hiring European staff to
run it. This was followed by the establishment of Sony manufacturing operations in various
European countries starting from the mid-1970s. the country managers were often the
former heads of Sonys distribution companies in those countries and they were granted
considerable autonomy in launching innovative products developed in Japan Sony Europe
is the Sony Corporations marketing, sales and distribution organization for the whole of
Europe and Russia. It operates across 38 countries and 13 time zones, employs 6,000
employees, and generates annual revenues of 8 billion. Originally, Sonys European
operations operated independently in each country, and each national subsidiary was
responsible for its own IT systems24.
In the global Smartphone market, Sony takes a third place behind Samsung and Apple,
which account for more than a half of all Smartphone shipments. According to the latest
numbers from research firm IDC, they placed Sony in fourth place with a 4.5% share of the
market.
24
13
Japanese
Companies
in
the
World
are:
Nippon
Telegraph
&
Tel
(materials),
KDDI
(telecommunications
services),
Sumitomo
(trading
companies). Canon has three big business units focused on Office, Consumer and
Industrial products. Most of the operating revenue comes from the consumer side of the
business at over 40%. Honda operates from four business units- Motorcycles,
Automobiles, Power products and Finance. Their biggest by far is the Automobile business
bring in about 75% of their total operating revenue. Mitsubishi established itself over 100
years ago as a shipping company and today is the largest in Japan. Its profits come from
six major industries where 50% of their net income is from their Metals. Mitsui has
transformed themselves from an intermediary to a total solutions provider from raw
materials to retailing. Most of their gross profit comes from their energy businesses.26
25
http://digitalcommons.ilr.cornell.edu/cgi/viewcontent.cgi?article=1651&context=key_workplace,Retrived:
23/09/2015
26
http://asdfhjk98656.blogspot.hr/2015/02/top-10-largest-japanese-companies-in.html,Retrived:23/09/2015
14
http://www.privatebanking.com/user/extra_info.jsp?location_id=9766&category_id=63&account_id=7890
6&published=1&page_id=0&.rnd=4b05eb502a074e068feca8c74b225fca,Retrived:23/09/2015
15
companies can benefit, directly or indirectly. In this context, TSE continues to design and
implement sufficient functions as a market where companies gain access to sufficient
funds.28
TSE operates four basic markets: the First and Second Sections, Mothers, and JASDAQ.
The First Section represents a main board of TSE for a number of globally operated
companies whose shares are traded with high liquidity. The Second Section is an equity
market for second tier and medium-sized companies with established profiles and business
bases. The third market, Mothers (Market of the high-growth and emerging stocks), lists
emerging companies with high growth potential. The fourth is JASDAQ (Japan
Association of Securities Dealers Automated Quotations), which initially launched as an
OTC market. While new listings on the main board are generally assigned to the Second
Section, some companies with outstanding liquidity prospects may be directly assigned to
the First Section. Mothers companies may apply for the reassignment to the First Section
or Second Section as they grow and develop. Fifty-four companies listed on Mothers, or
19% of all companies that have gone public in that market, have been successfully
reassigned to the First Section or Second Section at the end of 2012. The TSE markets
offer multiple and flexible options suitable for different company strategies and for
companies at different stages of growth. TSE offers a so-called One-Stop Listing
Solution and satisfies the various financing needs of TSE-listed companies on a global
basis.
In June 2009, the TOKYO AIM Market was established as a joint venture between TSE
and the London Stock Exchange in conjunction with the professional-oriented market
scheme contemplated in the amended Financial Instruments and Exchange Act in 2008.
The Tokyo AIM Market was subsequently incorporated into TSE, which restarted the
market as the newly branded TOKYO PRO Market, effective from July 1, 2012. The
TOKYO PRO Market limits its participation to professionals (special investors). This
allows it to apply less restrictive standards in terms of disclosure language, disclosure
documents, accounting standards, and so on, compared to traditional markets. TOKYO
PRO Market has adopted The J-Advisers system. J-Advisers are designated by TSE and
comprise of legal advisers and professional accountants. J-Advisers will perform the
28
http://tepa.org.lc/wp-content/uploads/2014/11/Doing-Business-in-Japan-UHY.pdf,Retrived:23/09/2015
16
29
http://www.jpx.co.jp/english/equities/listing-on-tse/new/guide/tvdivq0000002g9batt/bv22ga0000001ui9.pdf, Retrived:23/09/2015
17
30
http://www.ip.kyusan-u.ac.jp/keizai-kiyo/dp6.pdf,Retrived:23/09/2015
18
structures
(Representative
Office,
Branch
office,
Corporation).
The
31
http://japan.mfa.gov.ge/files/japan/gzamkvlevi/theestablishmentofenterprisesinjapanenglish.pdf,Retrived:23
/09/2015
19
European investors have discovered that the best vehicle for integrating the Japanese
market is in the form of joint ventures and non-direct manufacturing. Since the mid 1980s
as these joint ventures became more accepted as insiders by the local market and
businesses, they increased the European shareholdings to over fifty percent and often to
one hundred percent. They are in an excellent position to increase their business presence
in Japan.
In 1992 a special law was passed to promote foreign direct investment in Japan and to set
up a "Foreign Affiliate Business Support Company" reducing the need to depend on the
local company. Mergers and Acquisitions were accepted three times more in 1992 than in
1989. Since 1984 two recessions have occurred in Japan. Foreign technology is important
for the economy's reorganization and overseas firms are invaluable for job opportunities.
Many EU companies have been doing business in Japan for several decades. European
companies appreciate the strong work ethic in Japan as well as the Japanese enthusiasm to
reach out and work with other cultures. Most European companies employ at least one
hundred Japanese employees.
An organization called Vulcanus in Europe was created years ago where a EU country
offers a Japanese student the opportunity to train within their company for eight months.
Both sides win where the student will gain an invaluable work and cultural experience and
the company will also receive a skilled employee-trainee bringing to the table the Japanese
perspective and know-how of how to do business in Japan. Future Japanese executives
become familiar with the European business culture.
20
and determinants has found mixed results. In the past several decades, the
difference between the compensation of corporate chief executives and the pay earned by
the average employee has increased dramatically. In 1960, the average chief executive
earned 40 times as much as the average worker. By 1990, the average CEO earned 107
times as much. Various sources give slightly different ratios, but all are in general
agreement that the ratio of executive compensation to the pay of ordinary workers has
grown dramatically over the past four decades.32
On average, chief executives at Japanese companies with more than $10 billion in annual
revenues are paid about $1.3 million a year, including bonuses and stock-option grants
(based on data gathered between 2007 and 2009). But chiefs in the U.S. are paid about $12
million, and chiefs in Europe are paid $6 million.
Japanese executives earn far less than their U.S. executives. Compensation clearly
increases with firms size as measured by assets, but at a close to linear rate for American
firms compared to a much slower rate for Japanese firms. Accounting profitabilitys
coefficient is exactly the same for the both countries, with pay increasing significantly with
profits. Growth of the stock price, however, which had a small effect in Japan, has a large
effect in the United States. In Japan, older executive earned higher pay, but not in America.
32
http://connection.ebscohost.com/businessfinances/executive-pay/history-corporate-executivewages,Retrived:23/09/2015
21
There are a number of reasons for investing in Japan. Key reasons why foreign investors
are attracted to Japan are because the country offers: (1) A large consumer market with a
population over 127 million, (2) a financial centre, (3) a key trading hub in Asia, (4) a high
degree of control over the Asian market, (5) Highly advanced technology, (6) a leading
centre for innovation, research and development in Asia. JETRO is a governmental
organisation with more than 70 overseas offices in over 50 countries across the world. For
foreign companies planning to start a business in Japan, JETROs Invest Japan Business
Support Centre (IBSC) will provide consultation advice and facilities for establishing a
business base. JETRO IBSC staff and advisors provide information and consultation
advice, including on: market and industry information, relevant legal systems, taxation,
labour and legal issues, networking with potential business partners, finding human
resources and an office location, information on the regulations and incentives from
national and local governments. The Office of Trade and Investment Ombudsman (OTO)
is a government body for the promotion of investment from abroad. OTO is the contact
point when problems arise due to government regulations for export to or investment in
Japan. OTO can contact relevant government ministries and agencies including customs
houses, counsellor offices, regional economic trade and industry bureaus, general
quarantine offices, animal quarantine stations, plant epidemic prevention stations, regional
transport bureaus, embassies and consulates, as well as JETRO offices.33
33
http://www.uhy.com/wp-content/uploads/Doing-Business-in-Japan.pdf,Retrived:23/09/2015
22
The most common legal entities in Japan are: (1) Representative offices, (2) Branch
offices, (3) Companies (private). Before officially starting business in Japan, foreign
investors can use representative offices as a temporary basis for preparation of their
activities. A branch office can start business operations after deciding a base of operation,
appointing the branch representative and registering all the necessary information. A
Japanese branch office can open bank accounts and lease real estate in its own name. When
foreign companies intend to establish a subsidiary of their existing business in Japan, they
must choose a corporation type. Japanese Corporation Law recognises four types of
company entity:
34
Domestic income is income from business conducted in Japan or from using, holding or
transferring assets located in Japan. Domestic income includes income from conducting a
business providing personal services in Japan, for the lending of real estate or any right on
real estate located in Japan, interest from Japanese government bonds, dividends from
domestic companies and other income as prescribed by the corporation tax law.
23
24
Japanese economy has been a chronic drag on overall productivity, elevating the cost of
living and the cost of doing business in Japan.
For most of the last two decades the Japanese automotive industry has rated first among
buyers in terms of reliability, build quality and durability. Clearly, the industry boasts a
number of sources of competitive advantage, highlighted by lean production,
organisational philosophies and the way it is starting to dominate markets from luxury
vehicles through to entry-level products for emerging markets. But can the culture of
continuous improvement perfected over the 50 years in Nagasaki, Toyoda City and
Nissans home town, also be used by high technology SME manufacturers in Australia?
The short answer is yes, but, the key is to take key points from the plethora of information
that exists, and to apply it selectively and judiciously in order to facilitate the benefit. How
the Japanese auto industry maintains its competitive advantage and defends its market
dominance shows valuable insights for all. It could be argued that the key to the industrys
long-term success has been the evolution of a set of core competencies that have
underpinned Japanese auto makers global dominance. More than that, these core
competencies are constantly being questioned in light of increasing global economic
uncertainty and whether or not the various industry players need to develop a new suite of
attributes to ensure long-term survival in the face of increasing competition. There have
been various theories proposed which describe the relationship between core competencies
and competitive advantage. It has been suggested that competitive advantage results from
the way individual businesses leverage, develop and deploy their resources and
competencies. Three methods of creating sustainable competitive advantage are: (1) cost
leadership, (2) product differentiation and (3) focus, where a business chooses to compete
in only certain segments of a target market. By and large the industry secured its dominant
market position by actively building international production systems while increasing the
localisation of activities, including vehicle development, procurement, production and
marketing. Whilst this model often characterised the managerial norms and process of
Japanese companies throughout the 1970s and 1980s, since that time most have
progressively moved to include elements of a transnational business strategy. That is, using
what is essentially a globally proven platform to make product in and to suit local markets.
Today, Japanese auto makers market dominance is being delivered on the back of more
flexible configuration of resources and capabilities, greater utilisation of diverse overseas
operations and heightened emphasis on the development, use and diffusion of knowledge
25
36
http://www.uhy.com/wp-content/uploads/Doing-Business-in-Japan.pdf,Retrived:23/09/2015
26
5. Kaizen method
Kaizen is one of the most commonly used words in Japan. It is in the newspapers, on the
radio and TV. Japanese society is bombarded daily with statements regarding the Kaizen of
almost anything. In business, the concept of Kaizen is so deeply ingrained in the minds of
both managers and workers that they often do not even realize that they are thinking
Kaizen. It is the key to Japanese competitive success.
The Japanese word kaizen derives from the root words kaitranslated in English as change,
and zen translated as good or better. Kaizen is a Japanese word meaning continuous
improvement. It means creating an atmosphere of continuous improvement by changing
your view, changing your method, and your way of thinking to make something better or
for something to become better The concept that Japanese management created was
continuous improvement and major companies such as Toyota Motors developed a
management philosophy that enabled them to become highly successful worldwide leaders
in their business area. Such Japanese companies believe in steady and continuous
improvement over time rather than big, flashy innovations. It is used to effect changes of
anything that can be improved: process, design, movement, material etc. The effectiveness
of a kaizen system lies in the fact that it motivates by rewarding a much larger percentage
of the work force on a much more frequent basis. This had a cumulative behavioural effect
of improving attitudes, building trust, and boosting morale, which together become the
foundation of an increasingly productive work force. The first motto of kaizen is to utilize
the creativity, experience, skills, knowledge and innovation in people first before looking
for solutions based on capital expense, high technology or expensive machinery.
Kaizen is based on the belief that the people doing a particular job will often know better
than everyone else, including their superiors, how that job can be improved; and that they
should be given the responsibility for making those improvements. The production area is
by no means the only area within a company where kaizen can be implemented. Every
department within a company can make continuous improvements in its operations by
making small changes on a daily basis. The first step in the process is to break down all
communication barriers between the various units within the company. The master budget
is one such tool that can be used to improve coordination and communication between all
of the departments or other subunits within a company.
27
There are three levels of kaizen: (1) Work operation kaizen involves changes done by the
operator to his or her own machine on process, simply, cheaply, immediately, and with
little impact on surrounding people or processes. It is the first choice to implement. (2)
Kaizen equipment involves improvements made to machine or piece of equipment, which
requires more time, cost and resources that a work operation kaizen, and it may affect other
people and processes. (3) Process kaizen affects the complete manufacturing process and
may even affect all the equipment in a process. It may be done to greatly increase
production capacity, incorporate engineering changes or eliminate cost and time. Usually
this type of kaizen is conducted when the plan is to develop cells and transform from batch
to one-piece flow production.
Three definitions of Kaizen are: (1) Improvement trough changes in the method, (2) small
changes, not big changes, (3) changes within realistic constraints.
Real kaizen is made up of three essential components: (1) discovering problems and
pointing out what type of kaizen is required to fix them. Teaching new employees to solve
assigned problems is very important in kaizen activity. At the initial stages, supervisors
should make employees aware to areas where there are problems, give them hints about
how to do kaizen, and assign tasks. (2) Devising creative solutions to problems. Creative
thinking methods and idea generation techniques are useful. They help to study the
problem from different angles. (3) Decision making, implementation, and effect deciding
which kaizen proposals are the best and which can be implemented, planning how to
implement them and then actually implementing them. The effect will follow. Kaizen in
valuable only when it is implemented. This aspect of kaizen activity distinguishes it from
idea contests and competitions. Such contests designed to attract and reward unique ideas,
have little to do with kaizen activity. Kaizen activity that does not include implementation
and affect is no more than an interesting game.
Kaizen is a philosophy, mind-set and, for breakthrough performance, a most critical
vehicle to achieve strategic imperatives and execute value steam/process improvement
plans. The kaizen program is designed to help companies create a solid foundation for
change, allowing acceptance and effective integration, and thereby enabling a company to
sustain the process improvements and realize the positive financial and cultural outcomes.
28
http://www.schifferm.de/Kaizen%20MR%20_Final.pdf,Retrived:23/09/2015
29
acted as the center of knowledge to promote the best practices of Kaizen implementation.
The case of Toyota was presented and many Japanese companies agreed to imitate it to
faster their Continuous Improvement.
The third phase was the regional spreading of kaizen beginning in the mid 1980s, which
coincided with the globalization of Japanese business activities. The sharp appreciation of
the Japanese yen after the Plaza Agreement38in 1985 prompted Japanese manufacturing
companies to shift their production based to East Asia where production costs were lower.
Japanese firms tried to duplicate the quality management system in their factories abroad.
Moreover, as they endeavoured to increase local procurement of intermediate inputs, local
suppliers were requested to conform to Japans quality standards. Japanese companies
often assisted their local partners to learn kaizen philosophy and practices.
The fourth phase, which is now beginning, has witnessed growing interest in East Asias
industrial experience in other developing regions (including Africa). However, outside,
interest in and knowledge of the East Asian approach often remains general and
insufficient, and has not been operationalized with practical details. Also, the Japanese
governments TICAD IV initiative for promoting trade and investment in Africa provides
an opportunity for Japan to more actively publicize and introduce kaizen in developing
regions including Africa.
38
The governments of the US, Japan, France, Germany and the United Kingdom agreed to depreciate the US
dollar against the yen and the mark. It was signed on September 22, 1985 at the Plaza Hotel in New York
City. The exchange rate value of the dollar versus the yen declined by 51% from 1985 to 1987.
30
39
Zero Quality Control (ZQC) is a quality control approach for achieving zero defects. ZQC is
based on the principle that defects are prevented by controlling the performance of a process so
that it cannot produce defects, even when a mistake is made by the machine or a human operator.
40
Voluntary groups of employees who work similar tasks or share an area of responsibility. They agree to
meet on a regular basis to discuss and solve problems relaed to work.
41
A production system which is steeped in the philosophy of "the complete elimination of all waste" imbuing
all aspects of production in pursuit of the most efficient methods
31
effectiveness while reducing waste. Suggestions are not limited to a specific area such as
production or marketing.
Toyota organized their workers by forming teams and gave them the responsibility and
training to do many specialized tasks. Teams are also given responsibility for
housekeeping and minor equipment repair. Each team has a leader who also works as one
of them on the line. The internal kaizen skills course at Toyota consisted of a combination
of lecture, shop floor observation practice and implementation. There are multiple key
concepts involved in Kaizen at Toyota. The first introductory concept pertaining to Kaizen
in Toyota involves the expectations placed on any person in a leader ship position in the
company. Five requirements of a leader are: (1) Knowledge of work, (2) knowledge of
responsibilities, (3) skill in instructing, (4) skill in improving and (5) skill in working with
people.
In Kaizen, Toyota wanted leaders to be able to separate work quantity input-based
improvements (more machines, more time, more people) from work quality or method
related improvements (change the nature of the work to be easier and better). In other
words, leaders driving kaizen need to eliminate waste or unnecessary details in the existing
process.
Kaizen is not just based on improvements only being developed and implemented by
experts or management. Instead, it involves everybody, relying on the extensive
knowledge, skills and experience of the people working directly in the process. For
example, at Toyota Material Handling Europes production sites about 3,000 proposals for
improvements are made in a typical year.42
42
http://www.toyotaforklifts.eu/SiteCollectionDocuments/PDF%20files/Toyota%20Production%20System%
20Brochure.pdf , Retrieved: 27/02/2014
32
Padhi, N., Palo, S. (2005) Human dimension of total quality management, The TQM Magazine 17(5),
pp.467-485
33
training by experienced experts in the kaizen tools required to do the work. The team then
spends three to five days defining and carrying out the actions necessary to change the
process and bring about the needed improvement. Several 12- to 16-hour days are spent
developing, testing, and implementing their ideas.
One of the fundamental aspects of kaizen is the participation of employees from all levels
of the organization. The main goal of team is to implement 5s, standard work, reduce
waste, and create visual management.
Visual management system adds visible and visual depth and consistency to an
organizations messages about its mission and goals; it keeps information about the goals
and performance in front of employees at all times. At ist most basic, visual management
establishes and reinforces a direct link between people and performance in organizations.44
5s is a system for workplace organization and standardization. The five steps all start with
the letters in Japanese (seiri, seiton, seison, seiketsu and shitsuke). These five terms are
translated as sorting, simplifying access, sweeping, standardization and self-discipline.
Sorting involves activities such as marking the items that are not used or eliminating
sources of clutter and unwanted items. Simplifying access involved arranging items in the
work area and establishing guidelines. Sweeping includes visually and physically sweeping
the work area to ensure that everything is in its proper location. Standardization makes
information about locations more recognizable. Self-discipline is the routine practice of all
the steps that precede it.
The kaizen process must begin with the process owner, the individual with real ownership
and responsibility who has the authority to change the process and be answerable for the
consequences. He or she may be the general manager, president, or in some cases plant
manager, but always the person in charge. Kaizen cannot be successful without strong
support and direction from the top.
44
Liff, S., Posey, P. (2004) Seeing is believing, pp. 4, New York: Amcom
34
45
Kaizen expert
American Style is the umbrella methodology that successfully embraces JIT, TQM, self-directed work
teams, and modern industrial engineering approaches into a working system that achieves dramatic and
sustainable breakthrough process improvements. Kaizen American Styles major tools are: Standard work,
5s, Visual System, 8 Wastes and Set-Up Reduction.
46
35
expanding its use to transform their businesses from end to end, becoming lean
manufacturers.
The Kaizen Institute is an international private consultant group that specializes in the
kaizen method. It has licensed networks throughout 25 countries from which consultants
provide services globally. Their performance has proved that the kaizen method is much
needed and commercially viable. There are also other unlicensed consultancy firms, which
can provide training of kaizen. 47
Kaizen practices should be adapted to the local culture in order to have the highest
probability of success. Given that kaizen is a vital approach to problem solving, its
application requires restructuring the organizational culture and then use formal root cause
analysis to identify and correct the problem at the source. Thus, kaizen practices could be
implemented by the manufacturing companies of host countries provided that the host
companies have a low level of centralization of authority, and practice cross-functional
team cooperation of eight to 12 people with a skilled facilitator to identify, measure, and
correct the problem associated with the process. Manufacturing companies in the kaizen
host countries may be in a position to generate significant value-added products that could
effectively compete in the global market provided there is a synergy between the work
ethics of the Japanese kaizen system and a host companys organizational culture. In
addition, the kaizen host companies need to be fully committed to boosting the morale of
their workers to develop members capabilities, to achieve self-actualization, and to work
cooperatively. These commitments are vital to the process for improving the quality of the
companys output.
Despite the substantial economic slowdown that Japan is manifesting today, policy makers
in Ethiopia seem to view the kaizen system in a positive way because of its earlier success
in Japanese firms. Fully convinced that the Japanese kaizen management model could be
used as an effective strategy for latecomers like Ethiopia to industrialization, they seem to
view the Japanese management system as an exemplary method for achieving the Growth
and a number of Ethiopian firms have been instructed to launch a pilot project using the
kaizen management system in order to accomplish the following three objectives: first, to
formulate a national plan to enhance both quality and productivity in the industrial sector;
second, to produce a manual for explaining and guiding these activities; third, to transfer
47
36
relevant skills and techniques to the staff members of the kaizen Unit in the Ministry of
Trade and Industry (MoTI).
On the other hand, the Healthcare industry is facing mounting challenges: increasing
demand on services, increasing cost of materials, staff shortages, increased stress on staff,
the potential for mistakes has increased as procedures have become ever more complex
increased dissatisfaction from patients because of long waiting times and poor perceptions
of the care received. Traditional solutions to these problems might include the addition of
more staff, more money, more space or a combination of all of these and sometimes the
answer is simply that the patient must wait long periods of time before being treated. But
most healthcare organisations contain significant amounts of muda48 in their processes. If
staff can be engaged in a process of identifying and eliminating this muda, then this
liberates time and resources for increasing throughput and improving the patient
experience with no additional cost. An effective approach being applied by a growing
number of healthcare organizations is to apply Kaizen. The entire staff (doctors, nurses,
technicians, support staff) and the patients, all see and feel the impact of implementing
Kaizen when it is done properly. The stresses are removed and the professionals are now
able to focus on applying their skills instead of wasting their talents on non-value
activities. The Kaizen Institute has worked globally with hospitals, family practice units,
laboratories and medical supply facilities large and small. These improvements have been
gained by eliminating wasteful activities that over time have become part of the system
freeing up time for staff to do real value added work. These improvements are good for
everyone; patients, doctors, nurses and administrators, everyone benefits. Healthcare is the
perfect environment to implement Kaizen and streamline complex processes.
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Muda is a Japanese word meaning futility; uselessness; idleness; superfluity; waste; wastage; wastefulness.
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6. Conclusion
In the years following the World War II, government-industry cooperation, a strong work
ethic, high technology, and a comparatively small defence allocation (1% of GDP) helped
Japan advance with extraordinary speed to the rank of second most technologically
powerful economy in the world after the United States. Today, measured on purchasing
power parity (PPP) basis, Japan became a regional power that was able to defeat the forces
of both China and Russia. In the case of Japan, during the 1973 oil crisis, Kaizen helped
electronic and machinery companies to lower their costs and keep their end- user prices
stable even the food and other items had already stepped up their prices. Kaizen basically
helps a company to maintain the profit margin when the price of material costs and labor
costs keep increasing following inflation.
No doubt exists that the development of codes of professional conduct concerning
information behaviour based on relevant technical knowledge and practical experiences is
important in Japan. However, codes developed where individuals ethics of responsibility
are lacking would become just a polite fiction. To compensate for the lack of individuals
ethics of responsibility by restoring and maintaining Japanese core ethics, it is important to
reflect upon the historical circumstances that led to the formation of Japanese core ethical
values. Although this task is difficult, it is critical for Japanese people living in the modern
information society.
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