The ringi system itself is a form of nemawashi designed to obtain official consensus on a proposal which is then laid before top management. Yet it needs a sort of preliminary nemawashi to pave the way for circulation of the ringisho. This leads to quite a delay in decision making, and the delay can be fatal in times of fluctuating economic conditions. In some companies, therefore, "urgent" is stamped on special proposals to speed up the process. Other companies have a special procedure allowing urgent proposals to bypass certain sections. Some bypassed controversial points are directly brought into the executive committee meetings attended by the president, vice president, and other directors and are freely discussed there.
At any rate, when the ringisho finally reaches the top, the decision is made—adoption, approval, or rejection. Confirmation of the decision means that companywide consensus has been attained and implementation proceeds rapidly. It is silly for anyone to try to oppose the consensus at this stage, for unilateral disapproval offends the Japanese group spirit. The only alternative is to cooperate and assist in implementing the project. All staff members who affixed their seals on the proposal, from all departments or sections involved, are responsible for implementation.
The fact that the ringisho originates from fairly low down in the organization might suggest that top management is relinquishing some of its authority. But this is not really the case. A proposal is often conceived by the president, his directors, or his department heads, and is then hinted to the section specifically responsible for the matter. The task of drawing up and documenting the proposal is usually referred to someone at the bottom level. In the West, by contrast, a considerable proportion of management ideas are conceived in the executive suite and then imposed from the top down. The distinctive Japanese system of decision making, therefore, has numerous merits even though it takes so much time to reach a consensus. Specifically:
• It has the same effect as decentralized control.
• The circulation of the ringisho improves internal communication.
• The ringisho, as a circular, serves a reporting function.
• The ringisho is a kind of preconceived implementation plan, and has the effect of confirming implementation.
• The ringi system stimulates the initiative of people at the bottom level and utilizes their abilities. It makes everybody feel like a member of the management team. This is an excellent motivator.
Enriched Welfare Program
It was common in the Tokugawa era for a daimyo (feudal lord) to set up a residential district for his vassals and to have all of them live around his castle. The houses for these samurai were financed by the clan, and the size of a samurai's house was determined by his hierarchical status, with hard (the senior executive rank) living in a grand mansion and ashigaru (the lowest samurai rank) living in a tenement apartment. The samurai residential area was clearly set apart from the town, where artisans and merchants made their daily living.
One of the remaining evidences of this arrangement is the city of Fukuoka on Kyushu Island. This horizontally stretched-out city along Hakata Bay is divided by the beautiful Nakagawa River. The west bank of the river is the Fukuoka area, where the residence of samurai (vassals of the Kuroda clan) were located, and the east bank is the town of Hakata, where the feudal masses once bustled around the streets. Both names are still used to identify the area. The city itself is officially called Fukuoka, and the ruins of the lord's castle and moat are found in the west side of the city. But its national railroad station bears the name Hakata, since it is situated in the east. Thus any traveler wishing to visit the city by train has to purchase a ticket for Hakata Station.
Similar housing arrangements exist in Japan's present industrial society. Most large Japanese firms provide company-built and -subsidized housing for at least a third of their workforce. A company's housing quarters are customarily set apart from private residences in the area. All residents of such quarters are company employees and their families.
In addition, many firms have a loan system to assist employees in purchasing their own houses. According to a recent questionnaire survey of 818 companies conducted by the Ministry of Construction, the average company loan to an employee is ¥6,720,000 (approximately $30,000). The loaned amounts are repaid by installments deducted from the employee's monthly salary and semiannual bonuses, with the balance taken from his retirement allowance. The interest rate on the loan averages 4 to 6 percent. With the benefits of such a system, it is natural that workers are not eager to leave the company.
In-company savings accounts are also available to employees and offer a generous interest rate of 8 percent or more, which is definitely higher than the normal bank rate. Many a company holds an athletic meet annually for employees and their family members, and some seasonal festivities like a New Year celebration or a cherry-blossom party are held by the entire group or division at company expense. The Labor Standard Research Institute recently revealed that almost 90 percent of all Japanese firms, large and small, sponsor recreational company tours in spring and autumn. Many, if not all, firms maintain mountain lodges and seaside villas for their employees. Special commodities are supplied to employees at a discount price. The commuter fares are subsidized by the company. Tickets to concerts and plays are also available at a discount through the company. It seems that the company is more responsive to people's welfare than the government is, and leaves nothing to be desired. Employees, therefore, tend to lead their lives at the company's pace and schedule.
A few large trading companies have even devised a plan to pay employees a generous pension during their postretirement years until they pass away. Toyota Auto Industry and its union have established the Toyota Welfare Fund, with assets of ¥4.5 billion (approximately $22 million), contributed largely from management, some from the union, and a little from each union member. The operating profits from this fund provide monetary assistance to the families of employees who died during the term of employment and provide expenses for domestic helpers to employees whose wives are in the hospital or to former employees who are bedridden.
It is also customary for a company to provide a wide range of training courses, not necessarily related to job content, for employees and their families—for example, flower arrangement, classic dancing, singing, and cooking. Lessons in these skills help to create a cultured, well-mannered staff.
All in all, both formal and informal affairs, official and private matters, are intermingled in Japanese organizational life. The situation symbolizes the paternalistic unity of management and worker and drives employees to new heights of achievement.
Bonus for Bon and the New Year