Matsushitas Culture Changes with Japan

1. Even culture can change. Japan had to experience that firsthand in the 1990s when the economic bubble burst. Companies had hard times and as a consequence they got rid of elder workers whereby they neglected the traditional Japanese value of mutual obligations and loyalty. Younger people noticed theses happenings and lost faith in the mutual loyalty. Anyhow the generation that was born after the 1964s had greater opportunities growing up in a rapid growing economy thus they didnt have the same attitude towards Japanese values as their parents did. Their values were more westernized. They didnt want the same position in the same company their whole life, the wanted to switch companies and positions. All these events led towards individualism. 2. Japanese businesses cant operate the way they used to due to Japans changing culture. Companies especially have and had to change their human resource strategies such as the pay schemes or the recruiting system. In the past managers received bonuses regardless of their performance and were granted retirement bonuses as well as other specials like company housing. As people switch companies more and more, companies have to prepare for it and adjust the recruiting system which helps them gain more international and divers workforce. Nowadays a shift towards individualism can be seen. Workers get bonuses based on their performance but they hardly get offered any perks. As globalizations increases it is likely that Japanese companies become more and more westernized. Such changes can have both beneficial and harmful effects on Japanese economy. Focusing on individualism brings a high level of entrepreneurial activity with it, which involves the opportunity for new products and new ways of doing business. Moreover it also finds expression in a high degree of managerial mobility between companies, which might be bad for firms. When a worker frequently switches workplaces, he might lack the companyspecific knowledge and thus might not be so valuable for a company. The high fluctuation makes it also very difficult to build a team within an organization to perform collective tasks. 3. Matsushita was established in 1920 and become a giant consumer electronics company in Japan within the next decades. Traditional Japanese culture is based on strong group identification, reciprocal obligations, and loyalty to the company. With this sort of culture it was possible for Matsushita to hire employees, who worked hard for the greater good of the company. On the other hand Matsushita was mutual loyal to their workers and provided them with a wide range of benefits. After the World War II people havent had as great prospects as they had a few years later thus they were thankful for every job they could get and committed to it. Once hired they would spend the rest of their lives working for the same company, which supported to develop unique firm-specific knowledge. As a result Matsushita was at the forefront of the rise of Japan to the status of major economic power. As cultures change, people lacked the traditional values during the 1990s and early 2000s. But Matsushita didnt want to give in on the traditional values and therefore it didnt change their way of doing business until 1998. Unfortunately this adjustment came too late, and the company had already performed poorly several years before. 1/2

4. With its human resource changes Matsushita was trying to enhance its performance by offering a traditional option and making the company more attractive to new employees with its offers of a high start salary but no retirement bonus and no subsidized services. Matsushita is well known for its traditional values, so if they wouldnt had changed their human resource practice gradually they would have had destroyed the image of the company. Moreover the average age of Matsushitas workforce has become older and of course elder workers who benefited form the old system would have not give away easily. If it would have taken Matsushita years or even decades to fully implement the changes they would have probably carried on years of poor performance. 5. The Matsushita case teaches us that societal culture and business success are interdependent. We have seen that Matsushita had and has to consider the societal culture in order to gain greater or even any business success. As a result any company needs always to regard the societal culture for the purpose of acquiring and maintaining business success and needs to respond in an appropriate time to any changes of culture.

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