International Federation for Systems Research

IFSR Newsletter 1989 No. 4 (24) Fall

Magoroh Maruyama
Kaitori 4-2-1-505
Tama City 206, Japan
Success is arrived at in different ways in various cultures. Two firms in two different countries have both attained a high quality of products by means of exceptional human relations management. But what makes good human relations was not the same in both cultures. North American Tool and Die lnc. (NATD) in California, a supplier of precision frames to electronics notables such as Apple Computer, Hewlett Packard, Tektronix and Texas Instruments, attained an amazingly low rate of rejection, one-tenth of a percent, by the President’s passionate recognition of each employee’s dedication and inventiveness, while Lucky Ohji Store (LOS), a medium size fresh food supermarket in a suburb of Osaka, Japan, withstood the increasing competition from giant supermarket chains by maximizing creative interactions among its employees.
We have chosen these two firms for comparison not because they are representative of the business enterprises in their cultures, but because they are exceptional and non-average. We wanted to study cultural differences in the way firms become exceptionally successful. NATD is not “typically” American. LOS is quite different from other Japanese firms. Yet in both cases, some of the basic cultural characteristics available are maximally – and exceptionally well – activated. This has a profound implication for management. To be exceptionally successful, a firm must mobilize the cultural characteristics of the country in which it is located, rather than copying the methods developed in other cultures. But both firms also deviate from ordinary or average ones and show non-typical characteristics. This is the second point which I would like to discuss in this article.
NATD – lndividual Praise and Trust
NATD has approximately 90 employees, each of whom receives the utmost of attention from the President Thomas Melohn. He praises each positive action by the employee, and gives out a “Superperson of the Month” award in monthly ceremonies. He also cultivates mutual trust among the employees in various ways. For example, on payday he may purposely distribute the paychecks to the wrong persons, asking them to give them to the right ones. The employees show much affection for the President and are dedicated to their work. On several occasions they voluntarily showed up during the weekends to fill urgent orders. Once an employee disappeared in the morning after working for one hour and a half. Later the President learned that he had gone to his mother’s funeral, but he had filled an urgent order before doing so.
The very low rate of rejection is achieved not by inspection, but by the conscientious work of each employee. In the factory, there is no inspection station. There is no assembly line. Each person operates one machine, separately placed. The parts to be processed are either brought to and picked up in boxes from each worker’s station, or the worker himself/herself brings the boxes from and to the other stations. Everybody works at his/her own pace.
During the work, everybody stays alone at h is/her machine. The layout of the factory floor is such that even during the lunch break there is no place where more than 5 or 6 people can sit together. The workers form small groups of 2 or 3 each to eat their lunch in separate corners of the factory or in their cars. Yet a feeling of mutual trust has been achieved.
One reason for this success is undoubtedly the infectious personality of the President. Another key is the careful screening of the applicants by the President himself. For each vacancy, he begins with about 300 applicants. About 20 are chosen for an interview with him. He let me be present at one of the interviews. He particularly looked for clues to initiative taking, inventiveness, sports, club activities and interpersonal attitudes.
There are several recent immigrants among the employees, particularly from Southeast Asia. I talked with some of them and asked them whether they find the individualized praise, recognition and award-winning embarrassing. It turned out that they had joined the firm only a few weeks before, and had not yet had a chance to receive an award in front of the others. But as the number of employees increases, there will be more immigrants in the firm who may feel differently about the management method.
NATD is very American, and the idea of individual recognition and praise is compatible with the American culture. Yet NATD has characteristics that are different from those of average American firms. An example is the employee’s willingness to work at odd hours and on weekends, even upon very short notice. Another is the purposeful distribution of paychecks to the wrong persons. Above all, the personal style of the President Thomas Melohn is rather un-American: He shows affection and emotion very readily instead of being professional and impersonal. He weeps and chokes with tears when he talks about the accomplishments of his employees … a manner which is seldom seen nowadays.
LOS – Group lnteraction and Creativity
LOS is a medium-size supermarket ol fresh vegetables, fruits, fish and meat in front of a railway station in a suburb of Osaka. Recently several large supermarket chains opened their stores within the same block. Price wise LOS cannot compete with them. However, LOS is maintaining its sales level: customers like its unique style. This cannot be explained by the Japanese consumers’ propensity to stay with the same store, because the suburb has become a bedroom town with a high turn-over rate of the population as well as an influx of young people. LOS is a branch in a chain of some 19 stores, most of which are located in the City of Osaka. Other branches have not been able to copy its success.
Five years ago LOS was given a new manager, who had ideas of his own on how to make improvements. Employees who had been dissatisfied became enthusiastic, new activities were generated among the workers, and both efficiency and quality improved.
The core of these activities is a group of semi-permanent part-time workers who are housewives. Other employees also participate. They interact in several ways: weekly reporting and brainstorming sessions which include the manager and smaller, informal meetings as needs arise. They actively collect and write down customers’ comments, and report and discuss them in the weekly meetings. They also invent new “dishes” daily, which are sold in the ready to-eat take-home food section, a special attraction of the store. Finally, they issue a monthly magazine, xeroxed and stapled, summarizing the customers’ comments, sales statistics, error statistics, new ideas, and employees’ criticisms and praises of each other. The magazine is filled with cartoon illustrations which the employees draw themselves.
The main reason for having these activities is: interaction, creativity and fun. The philosophy of the manager is that work must be fun. Our research team members were present at one of the weekly meetings, and they found it jovial, substantial and enjoyable. But these activities also require hard and painstaking work. Each employee’s cash register errors are tabulated. The employees take turns observing and making positive and negative comments on one another’s behavior toward customers. The customers’ comments are tabulated in various categories. The employees invent new dishes and food combinations, for which they have to conduct a great deal of interactive research and experimentation, bringing together individually different experiences and knowledge.
Unusual topics come up in meetings from time to time. For example, an elderly customer asked an employee about a product, and this inquiry turned into a short conversation: the customer had recently moved into this area, did not have his family with him, etc. The employee not only provided him with suggestions and advice, but also took time to listen to him, since he had no one else to talk to. The customer was very grateful. Japan, as well as many other countries, is in social transition: there are increasing numbers of senior citizens, employees often have to live away from their families due to work requirements, etc. LOS employees therefore have improvised new social functions in addition to their commercial ones.
The Essence of Japanese Management and Work Style
The basic principle of traditional Japanese garden design and floral art is the symbiotization of diverse elements in such a way as to enhance the individuality of each element through its interactions (Maruyama 1980, 1981). Repetition of the same element is avoided. In contrast, flowers in the Dutch tulip gardens are used as color carpets in which the individuality of each flower disappears. Similiarly, a good Japanese manager is one who puts heterogeneous individuals together, assigns a task to the group rather than to each person and lets the group members figure out their own pattern of interactions based on their individual differences (Maruyama 1984, 1985a). Foreign managers who try to assign individual tasks to Japanese employees obtain poor results.
Mathematician Stanislaw Ulam has shown (Ulam 1960) that entirely new information – and not just a new combination of old elements – arises through interactions among heterogeneous elements (Maruyama 1960, 1963). Genuine creativity can be attained either by interactions between the ideas in one person’s mind or by interactions among many persons. Many of the inventions in Japan are devised by groups. Statistics (Gregory 1986) in electronics show that already by 1962 Japanese patent applications had exceeded those in West Germany, and by 1968 there were more patent applications in Japan than in the USA. By 1976 Japanese applications were 60% higher than US applications and 46% higher than those of West Germany. ln the same year, Japanese nationals were the largest single group of foreign national holders of US-patents, and held more than twice as many US-patents as UK applicants. In 1972 Japan emerged as a net exporter of technology when the export/import ratio of patent licensing in terms of royalty receipts/payments was 125.9%, counting new contracts only. In 1977 this ratio reached 214.9%. Invention by groups is therefore seen to produce good results.
There are numerous well-documented case studies of Japanese inventions by groups (Uchihashi 1982, Maruyama 1985b). An example was the first wristwatch using a quartz electronic resonant circuit. It was designed by Seiko and defeated Swiss watches in time keeping accuracy in a Swiss competition held in 1967. The sponsors of this traditional NeuchAtel competition, in which Swiss
watches had previously been the winners, panicked and did not publish the result, and they discontinued the competition in subsequent years. Prior to miniaturization, first quartz clock, which had still used vacuum tubes instead of transistors, was so big that it had to be transported on a pick-up truck. Seiko achieved miniaturization by several methods. One involves cutting quartz into a zigzag, thereby compressing into a small space the length needed for the desired resonant frequency. By letting quartz experts who did not know how to cut quartz work together with jewelry makers, Seiko was able to put quartz into wrist watches. Another example is a solution to derailing problems of high-speed trains which was devised in the 1950s. The use of aircraft technology enabled engineers to eliminate spontaneous resonant vibrations. This facilitated the creation of the bullet train in the 1960s. Traditional train engineers had believed that derailments were caused by crookedness of the rails. But aircraft engineers who had been recruited into the National Railways thought that trains might develop resonant vibrations regardless of how straight the rails were. It was decided to conduct experiments with models. To obtain results relevant for railway engineering, the models had to be on model tracks, but at the same time the aircraft engineers employed the wind tunnel concept, in which the models stay still. The rails were mounted on a very large, rotating wheel. With this system it was easy to measure and control the swaying of the rails. The experiments proved that the trains vibrated at some specific speeds.
ln LOS, similar inventive interactions are at work, especially in the preparation of ready-to-eat take-home dishes. In this task, employees from different geographic areas and with different backgrounds interact. The store manager’s policy of letting them interact and leaving room for improvisation and inventiveness is very typically Japanese.
However, when other branches of the same supermarket chain tried to duplicate the success of LOS, it did not work well. The format of the weekly meetings and the contents of the monthly magazine were easy to copy, but the expected results were not forthcoming.
What distinguishes LOS from other stores is that the employees have worked out a spontaneous and enjoyable pattern of interaction – and that they are having fun. They are not simply fulfilling requirements. Before the arrival of the present manager, they were unhappy: there were factional fights among them and one clique was unfriendly to the others. Now you get the impression that the employees are glad to have been freed of the bickering, which was not of their own making.
In interpreting this change, it would be incorrect to say that the present manager made the employees become more friendly to one another. It would be more correct to say that he removed the causes of their unfriendliness (the details are confidential), and let the employees’ abilities flourish. There is also no doubt that his jovial and humorous nature is contagious. In the case of President Melohn of NATD, his passionate nature is infectious. However, more important is his careful screening of job applicants. He selects only rose who are compatible with, responsive to and appreciative of his way of managing. The fact that he rejects 299 out of 300 applicants means that his employees consist of rather atypical and non-average Americans. Yet he maximally. and optimally uses a very American characteristic: the praising and rewarding of individuals in front of others. He also uses some non-American methods, such as the distribution of paychecks to persons other than the proper recipients. We also noted that President Melohn is not “typically” American; his approach is passionate in an era of impersonal professionalism. However, there were periods in American history when passion was more accepted and valued. In his view he is reviving an old virtue.
Japan has regional differences in personal characteristics. People in Tokyo are more serious and quiet than those in Osaka, who are more informal and outgoing. But even by Osaka standards, the LOS manager is exceptionally humurous and friendly.
From these two cases in two cultures we learn that a firm, in order to attain an exceptional success, must activate some of the basic characteristics of the local culture, and that an unusual approach must be employed, which is not in contradiction with cultural constraints.

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