There is a saying in Japanese: "A man incurs on even through a single night's stay." As this suggests, on implies the receiving of some kindness, along with the psychological burden of repaying the kindness in some way. Employment is a favor of the employer to the employee, as it was that of the lord to his samurai, and the employee is indebted for the favor. Therefore, the employee pledges himself to the on provided by the employer. The worker repays the debt by dedicating himself to the work, much as a samurai devoted himself to his lord. But the on is so profoundly abstract and difficult to quantify that it is almost impossible to repay. Accordingly, the dedicated efforts of workers to repay on become rather endless.
The relationship between employer and employee is always vertical. It continues after working hours and even extends beyond retirement. However, no one can deny that there is a contractual aspect to the relationship, even though no contract is written on paper. Some scholars refer to such Japanese groups as the "kin-tract" society (a combination of "kinship" and "contract"), a term originated by psychologist Francis L. K. Hsu. But I have coined the term "on-tract" society, because on is very often the prime mover in driving people to reach a contractual agreement and to fulfill the mutual obligations created by the relationship.
The ideology of paternalism instills a strong sense of belonging in the minds of workers. The employees, in turn, like good children or loyal subordinates of daimyo, willingly follow what the company desires. Of course, the Japanese people are intelligent and do not blindly follow or swallow anything offered by management; but they do enjoy the exclusive atmosphere of their own work group as all members join together to achieve business success. This group-centered enthusiasm is the most important consequence of the paternalistic system.
The scientific management movement established by Frederick W. Taylor emphasized the use of money to make a man work. Since human beings need money to survive, it is truly a great motivator. Nevertheless, too much reliance on money to motivate people spoils them, and even begins to work on them like a drug. The more money people get, the more they want for their work. This is particularly true of workers who do not derive satisfaction from the work itself. Their addiction to money will increase year after year, and indiscriminate use of the drug will ruin their minds, if not their bodies.
Japanese management has never relied too much on money to motivate workers. They know that money can be used to move an item, but it is extremely difficult to move a man around with money. Of course, a man can be moved physically by money— such as paying a worker a premium to transfer from a head office to a branch office. But unless the worker is fully convinced that his transfer is the right action for both himself and the company, his mind is not really moved from one place to the other. To move people's minds, Japanese employers know that they cannot depend solely on monetary rewards. This is the theory behind paternalistic management.
This paternalism, the central motivating force of management, is based on three policies, or pillars of the organization: life-time employment, seniority-based promotion, and the in-company union. We will look into each of these features.
Lifetime Employment (Cohesiveness)
Today a "Safety First" sign is found on factory walls all over the world. This motto was started in America. Many years ago the management of an American factory proposed "Efficiency First" as a slogan to increase the productivity of its workers. The result was quite negative. With such high pressure placed on the workers to increase efficiency, accidents occurred frequently and productivity decreased. After that, management became aware that safety was the key to efficiency. Accordingly, the company established "Safety First" as its motto, and this spread all over the world.
Some Japanese managers were a little bit wiser and went one step further. They established "Safety First" as a motto not only for the factory operation but for the life of a worker as well. They offered the worker total job security. This meant, of course, "no firing" of employees. Thus the idea of lifetime employment was introduced in the Taisho era (1912-1926). At that time, the life expectancy of a Japanese male was around 44 years of age, so the guarantee of a job until retirement was really lifetime employment. Now Japanese men live an average of 73 years, so the term "lifetime employment" really refers to employment until retirement (usually between ages 55 and 60).
Late in the Meiji era (1868-1912) and early in the Taisho era, the turnover of blue-collar workers was quite high in Japan, and management suffered as a result. The timely introduction of "lifetime employment" improved the consciousness of workers and reduced the rate of turnover in the factories. This new practice gradually became the standard for the nation—the proverbial Japanese system. It gained widespread acceptance because it matched the cultural traditions of Japanese society. In the feudal society of the Tokugawa era, it was a disgrace for samurai to abandon the lord they served. (This was not true before the Tokugawa period, in the fifteenth and sixteenth centuries. It was then quite common for a samurai to turn his back on a weaker lord and join a stronger one or a more generous one who rewarded him better.) Tokugawa shoguns stressed such Confucian teachings as "A loyal samurai will not take a second lord" (Chushin wa nihun ni mamiezu) and "A faithful wife will not marry two times" (Seppu wa nifu ni tsukaezu). Thus single-hearted faithfulness became a virtue.
Since its introduction in the Taisho era, this unique employment style has taken firm root in Japanese industrial society. The system, which is almost inviolable, makes the work group the most cohesive group in a person's life. After finishing school, a new employee joins the group. He will always remain with the organization and will personally identify with the social level, reputation, progress, and success of the company. If his company is large and enjoys a solid reputation in the community, he himself is also considered great and is given high social status. In return for being looked after and protected, he renders dedicated service and gives complete loyalty to the company. He does not think of his relationship with the company in contractual terms, as is usual in the West. Like a vassal to the lord, he belongs wholeheartedly to the organization, to which by far the most valuable part of his life will be devoted.
In the West, the possibility of a worker quitting in a desire for advancement and the prerogative of the company to fire a worker are constant factors in the employer-employee relationship. Japanese companies, however, are reluctant to discharge employees because of a fear of destroying their long-established unity, and workers are reluctant to quit because of their "safety" status as lifetime employees. In 1974, right after the first oil crisis, the famous Japanese manufacturer Matsushita Electric suffered from the tremendous drop in sales of color TVs. Despite the production cut, the stocks continued to increase. The president decided to discharge some 10,000 workers. But Konosuke Matsushita, founder of the company, strongly opposed the move. "The workers are treasures. Never discharge them," he said. So the company adopted the han-don (half-day) system, an idea created by Matsushita himself during the recession of the 1930s. Production workers put in only half a day in the company, then spent the remaining half day out selling the stocks. The union was so pleased with the idea that it formed the "Sales Volunteer Force" on its own. The workers wiped out all the stocks in six months and returned to normal operation.