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Japanese Business Culture Blog

A blog about communications between Japan and other cultures, particularly in business.



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Japanese companies in Europe - more or less autonomous?
Pernille Rudlin
Oct 02, 2009 11:54 AM
It's hard to motivate and retain locally hired staff in Europe simply by promotion to "manager" for Japanese multinationals with multiple small scale subsidiaries.

I give a couple of suggestions that might help overcome this in this article I originally wrote for the Nikkei Weekly.  My recommendations for more recognition of locally hired staff within a European or global HR structure, and more training and professional development opportunities may seem unexceptionable, but to understand why this might be a new way of thinking for Japanese companies, a more academic review of how Japanese multinationals are distinctively different in terms of HR systems, autonomy, performance management etc in Europe compared to US and other European multinationals has been done by a team from London, Leicester and Warwick universities.  You can download their report (130 pages pdf) here.

There are some telling conclusions in the executive summary:
  • "Japanese multinational corporations (MNCs) are much less likely than European or US MNCs to involve local managerial employees in international development activity"
  • "German MNCs have the highest training expenditure overall (6.3% of the annual pay bill), and Japanese companies the least (2.1%)."
  • "Parent country nationals occupy one or more of the five most senior management positions in the UK operations in 45% of overseas-owned MNCs. The incidence is highest amongst Japanese MNCs, which are also the most likely to report 3 or more parent country nationals amongst the top five positions, and lowest amongst German MNCs."
  • "US firms are more likely, and Japanese and German firms less likely, to have share-based schemes."
  • "Japanese firms allow local discretion and have few international HR structures. They are also the least likely to use formal organisational learning arrangements."

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