Whenever temporary layoffs are made in the West, younger employees are eliminated first. That is what is meant by seniority. During the oil crisis, Japanese companies invited employees to volunteer for retirement by compensating them for early withdrawal from the lifetime employment system. Senior employees were asked to leave the company first, simply because they were imposing a greater financial burden on the organization. With this development, the seniority system lost much of its value for employees, since it no longer protected the senior members of the group. On the other hand, companies would have gone bankrupt if they had stubbornly tried to preserve the traditional seniority system. How Japanese management will operate this crucial system for managing human resources is something to watch for in the future.
A more important, and disadvantageous, aspect of the seniority system is that management has to promote an employee to section chief or an equivalent position simply by virtue of his having completed a certain length of service. In large business firms as well as government offices, age groups reinforce the hierarchy of rank, and those who entered together in any one year from the same graduating class will move in parallel in both salary and rank throughout most of their careers. Management is obligated to promote employees of the same "class" by any means, if not at the same time, before the next class is moved up.
As a result, it is not unusual for management to place an older employee in a managerial or equivalent position even if he is not really competent for the post. In such a case, management always finds a capable assistant to compensate for the incompetence of the manager. For the person selected as assistant, it is certainly a fine opportunity to obtain a promissory note for an executive post in the future. Those higher on the career escalator are seen merely as elders who got on the escalator earlier, not as workers who climbed up by ability to the higher posts. Almost everyone can be certain that his time will ripen in due course. In this manner, the Japanese hierarchy maintains wa (harmony) and breeds less tension and resentment than does the status-based system of the West.
In-Company Union (Exclusivity)
The following incident took place quite a while ago, but since the situation reflected still exists, it bears relating here.
The Japanese Shipbuilders Union invited representatives of the Trade Union Congress of Britain to inspect Japanese working conditions. The British delegates inspected all the major shipbuilding centers, from Hokkaido Island in the north to Kyushu Island in the south. Afterward, they returned to Tokyo and presented their findings at the branch office of the International Labor Organization. The leader of the British delegation, who spoke first, made this comment: "There is no union in Japan." Every Japanese attendee thought that he was joking, but it was not a joke. He continued, "When someone who has been working at your side is discharged and moves to another company, he immediately loses his union membership. That is not a union. People work together in the same factory doing the same work, but out of this workforce, a small group employed as temporary helpers is not allowed to belong to the union. That is not a union." He gave more examples, all to demonstrate that there was no union in Japan.
A certain blame may have to be placed on the ambiguity of such Japanese terms as "lifetime employment," which is so vague as to allow Japanese management to pay monthly dues to workers for their entire life and to call something quite unlike a union, a union. But the main problem is that the Japanese, with their tight-knit groups standing apart in the vertical society, recognize no common ground. They have a very strong and narrow-minded in-group orientation. Therefore, workers at one company are not likely to unite with workers from rival companies to raise wage scales or improve working conditions. Instead, they would rather compete with rival workers to increase their own company's revenues (the source of wages)—much as samurai competed with enemy samurai to promote the good name of their lord and thus increase the stipend allotted to their fief. Japan remains a vertical society.
There are many labor federations in Japan, including the General Council of Trade Unions of Japan (Sohyo), the Japan Council of Metal Workers Unions (Zenkinzoku), and the Japanese Federation of Iron and Steelworkers Unions (Tekko-roren). These are the established common grounds for workers, designed to promote their horizontal relationships and communications and thus build an integrated labor movement. However, the workers do not feel any special responsibility to these groups. In general, their loyalty and sense of belonging reside with the company. The union is a secondary consideration for a worker, since he can hold union membership only as long as he stays with the company.
I understand that Western civilization has its roots in the tribes of horsemen, hunters, and herders who originally settled in Europe. In those early times, certain forests and pastures needed to be set aside as public grounds, since many tribes depended on those lands for their living. They knew that if they hunted too much in a forest, or grazed a pastureland down to the roots, they and others would lose their means of livelihood. They were adamant about not allowing others into their private holdings, but at the same time they felt a strong mutual responsibility to maintain public lands. The labor unions and trade unions of the West grew out of this strong feeling of mutual responsibility.
By contrast, the Japanese have been an agricultural people from earliest times. Rice fields were clearly marked off as the property of one house or village, and the people's livelihood was made by tending these fields. Though all village members shared water rights, and though they worked in close cooperation, they felt no ties of mutual responsibility to other villages. Outside their own village, they were free from the ties of giri (social duty) and ninjo (human feeling). This heritage perhaps explains why the Japanese do not have horizontal unions in the Western sense.
Japanese workers are organized not by crafts or trades but by companies. White-collar and blue-collar workers are all in one union. They have never felt any need to oppose technological progress or strategic change in their company by demanding featherbedding or the like, as their Western counterparts often do. They know that all the changes are made at the expense of "the company. Furthermore, a union leader rarely opposes company policy. Far from being hostile, he usually makes demands in a spirit of cooperation with the company. There is good reason for this. He and other union members are on the same promotional escalator in the organization. Someday, as an executive, he may be in a position to receive union demands himself. While serving as a union leader, he looks ahead and thinks of his future role. Psychologically, he is already a member of management when he is elected union leader.
As a matter of fact, the union leader is in an advantageous position for climbing the promotional ladder. Capitalizing on his central position, in which he comes in contact with employees in various departments, he can establish close personal relationships with many people and thereby collect valuable information from every corner of the company. Needless to say, he can make good use of this information all the way up to the executive post. (In fact, there are many executives who used to be union leaders. Nikkeiren, the Japanese Federation of Employers' Associations, recently surveyed 534 large companies and discovered that 992 out of 6,121 executives, or 16.2 percent, had been influential union leaders.)