Japanese Business Structures


Up until World War Two, Japan was dominated by a small number of very large companies, the zaibatsu, and these companies had massive influence on the economy. However, in recent years the Japanese economy has become much more varied in terms of the size and structure of its companies, producing a complex web of inter-locking relationships between large and small firms. Competition amongst these smaller firms is very strong which results in a great number of bankruptcies in this sector — therefore the concept of life-time employment enjoyed by the total workforce is, and has been for some time, a myth.

Japanese companies, like Japanese society, are hierarchically organised with individuals knowing their position within a group and with regard to each other. It is this sense of belonging to the group that gives Japanese companies their strength and purpose. Group orientation and team working are not merely concepts and phrases in Japan but a way of life which permeates all aspects of corporate life at all levels.

Japanese hierarchy is based on consensus and co-operation rather than the top-down decision making process which often typifies western models of hierarchy. This means that people feel actively involved and committed.  It can also mean that decisions are slow and have to be based on deep analysis or large amounts of information.  'How can we get the Japanese to make their decisions more quickly' is a question often asked by western businessme.  The answer is probably, 'you can't!'