What To Learn From The Japanese Decision-Making Process

I will say this upfront: this article is not written in a way to explain the way the japanese decision-making process works. In fact, I wouldn’t be able to do so, since I have never directly experienced it. And in my readings about it, I realized that it is so far off the Western understanding, that unless you directly take part in it, you will probably never understand  it.

In its essense, the ringi system is a process through which the decision-making process is initiated from the buttom to the upper levels of the hierarchy. It is a group-oriented process with the goal of achieving consensus. The idea is that a group of employees makes a suggestion, packages in form of a document, and then passes it on to the next level, until it reaches the final decision-maker. At the end of the process, every employee then has signed the document, and therefore committed him-or herself to the final decision. Logically, the process is much slower than the rational western-style decision-making processes, but at the end, each employee feels a sense of ownership. The result is, that the implementation goes much more rapidly, and without less problems.

At the same time, the idea of ‘nemawashi’ is implemented – a process of continous consultation among employees. This is a much more informal process, which takes place next to the formal discussion. Employees share their ideas, suggestions, and concerns through their informal networks. It is thus not uncommon that a major organizational decision can take 6 months to make, since the informal process of negotiating is taking place over long periods of time, and throughout the whole organization.

What I find particularly fascinating about all this is, that it would probably be impossible to implement in a western environment. All of this is possible due to a completely different organizational structure- and environment. Let’s have a look at a few of the factors that make a Japanese organization unique.

  • the basic unit of an organization is not an individual, but a group. With groups consisting of about 8-10 members, an individual’s identity is attached to the group to which he or she belongs
  • instead of being based on explicit organizational goals, and policies that come with it, the decision-making process is based on implicit shared assumptions in form of the organizational culture
  • there is an intensive process of socialization, through which new hirees are indocrinated with the organizational values. When new employees enter the company, there is a long period of time in which the goal is purely to create a sense of loyalty for the organization
  • as a result, there is not a clearly defined position of authority and responsibility. Instead, authority again comes from the structure that has implicitly developed through the organizational culture
  • for example, employees are not being promoted as such. They are not getting a salary increase for good performance. People from the same generation, stay in the same position. Instead, they are simply being assigned more responsibilities.
  • People are frequently assigned jobs with exceed their job descriptions, and they are being rotated between different departments. That way, they are developing a broad range of skills, which allows them to understand the problems faced by their co-workers in different departments, and they can thus easily support them. This creates a sense of interdependence between everybody.

As you can see, the whole Japanese organizational structure is almost incomprehensible for an outsider. Since it is so dependent on the socialization process, and since employees have a much broader understanding of their organization as a whole than their western counterparts,  people entering the company from outside are bound to fail, as they are not able to adapt to the internal processes. This is also the reason why external consultants are so unpopular in Japan.

Okay, but whats the point I am trying to make here?

Well, what really fascinates me about the Japanese system is how their loyalty to their groups leads to inter-group competition, instead of internal competition within a single group. Competition within a group is simply not encouraged, as is affects the harmony of the group. What is rewarded instead is the performance of the group the individual belongs to. So its not salespeople competing against their colleagues in their team, but one group of salespeople competing with another group. I am interested in the question of whether or not this can potentially be the solution to the so-called “sucker effect” developed by Johnson. It states that in teams, high-performers are often less productive, because they do not want to feel taken advantage off, and because there might be a sense of “let the others do it”. The sucker effect is a massive problem for organizations in terms of maintaining group productivity.

So, to end this discussion, I am interested in your opinion. What do you think about the Japanese way of making decisions? Do you think we can learn something from them? If you want to learn more about it, I encourage you to read this article by Rean J. Robin.

Tim

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