産 業 關 係 硏 究

第16卷 第1號, 2006. 6, pp. 21～42

ⓒ 韓 國 勞 使 關 係 學 會

産業關係硏究 제16권 제1호

Alternative Forms, Same Emotions?(Aviad E. Raz)

Alternative Forms, Same Emotions?
Organizational Culture and Labor Relations in Contemporary Japan

Aviad E. Raz*

논문접수일 : 2006년 1월 3일, 심사의뢰일 : 2006년 3월 15일, 심사완료일 : 2006년 6월 5일

* Dept. of Behavioral Sciences, Ben-Gurion University, Beer-Sheva, Israel 84105, aviadraz@bgu.ac.il

The once-dominant organizational culture of Japanese-style management, which has been reserved for a minority of regular male employees from its start, is being gradually eroded. This organizational culture merged between the ‘three pillars’ of lifetime employment, seniority system and enterprise unionism, and a discourse of paternalism, benevolence and trust. Ethnographic research conducted in Japan during 1996-1997 and 2000-2001 on co-partnership management and the National Union of General Workers shows that while new forms of labor relations have been implemented, they are still informed by the psychological and social discourse characteristic of traditional organizational culture. Two complementary perspectives, contingency theory and internal labor markets, are discussed in order to explain the persistence of the traditional discourse.

▶ Keywords: Enterprise and Trade Unions, Japan, Organizational Culture, Co-patnership Management

Ⅰ. Introduction

There is general agreement that the role of enterprise unionism, previously one of the “three pillars”(together with lifetime employment and seniority system) of Japanese-style management, is being eroded. The editor of The Japan Labor Flash Journal recently wrote (#50, November 15, 2005) that “The current situation of labor unions in Japan is that, though fully aware of their own failure to sufficiently adjust themselves to changes, they are struggling to find any decisive steps to take. These changes include the ongoing diversification of employment and job patterns and ‘individualization’ of labor, which are beginning to make it impossible to work out labor-related issues within the framework of traditional, collective labor-management relations.” This paper sets out to examine possible paths of continuity and change for enterprise unionism today. In particular, I focus on new forms of labor relations that have been implemented, asking whether they are still informed by the traditional discourse.

In October 2001, Japan’s Trade Union Confederation (Rengō) decided that it would seek to maintain the present salary curve at the spring 2002 wage negotiations (shuntō). This decision marked the first time Rengō has not set a coordinated across-industry numerical target for basic salary raises. Instead of raises, the union opted for job security. Rengō's decision, which was made with difficulty, reflected the lingering recession, the growing differences in the performances of firms in different industries, and the growth in unemployment. The unemployment rate for September 2001 reached 5.3% ― the worst unemployment rate in post-WWII Japanese history.

The shift from wage bargaining to job security negotiations reflects a broader process of transformation. The once-dominant model of the “three pillars” of Japanese-style management (Odaka, 1984), which has been reserved for a minority of regular male employees from its start, does not seem so dominant any more. Seniority system (a complex mixture of both seniority and merit components in the first place) is increasingly under attack by the more fashionable performance pay. Lifetime employment has shrunk to characterize about 15 per cent of the labor force, and is persistently undermined by talk on “corporate re-structuring” that leads to early retirement. Estimated unionization rate in 2000 has fallen to about 20 per cent after a long and steady decline. The once-celebrated “core” of Japan’s labor force is gradually shrinking, as the “periphery” of contingent workers (female workers, part-timers, seasonal, sub-contractors and foreign workers) becomes larger. This situation is particularly characteristic of the service sector. Having entered its post-industrial stage about 20 years ago, Japan now has a large service sector consisting mainly of part-timers and temporary workers. The organizational culture of this sector does not follow the once-dominant culture of Japanese-style management. Or, more accurately, the service sector may subscribe to the organizational culture of Japanese-style management, while its workplace culture is actually torn between a minority of regular workers and an overwhelming majority of contingent workers (see Raz, 1999a,b). As Broadbent (2001: 138) argues, the low rates of unionization for part-time workers, the majority 73 percent of whom are women, has an important gendered aspect: “Male workers and unionists assume that part-time workers are not interested in union activities simply because they are often women with family responsibilities and not working full-time. As the history of the union movement in Japan is a history of male activity, little effort is made to increase union appeal to women or part-time workers. By excluding part-time workers from unions and marginalizing women workers, ‘core’ male workers maintain a privileged position and hence higher status as workers.”

The decline in estimated unionization rate is even more blatant if considered against the continuously growing number of employees (The Japan Institute of Labor, 2000: 42). The main factors behind the decline in unionization rate are probably the burgeoning of employment in the service sector and the increase in part-time and temporary workers.

The first part of this paper offers a brief overview of the dominant organizational culture conventionally termed “Japanese-style management.” I focus on the dominant forms of labor relations and their corresponding, socially-constructed, emotional discourse. “Japanese-style management” also represents a certain ‘psychological contract’ between employers and employees, the management and the company union (Rousseau, 1989). What happened to this psychological contract with the growing diversification of labor relations in contemporary Japan? While Japanese workers’ loyalty to their company has usually been studied in the context of life-time employment or company welfare, the enterprise union also represents a significant psychological and social framework. Members of enterprise unions see their prime loyalty as lying with the economic welfare of their own company (Miller and Amano, 1995). In addition, such membership is perceived as part of a privileged psychological and social relationship of paternalistic benevolence and ‘domestic unity’ in the firm-as-family, from which non-regular employees are excluded (Kumazawa, 1996).

The second part of the paper proposes that while new arrangements of labor relations have indeed been implemented, they are still informed by the psychological and social discourse of normative control that was characteristic of the dominant organizational culture. The analysis is based on ethnographic research conducted in Japan during 1996-1997 and later in 2000-2001. My analysis focuses on co-partnership management as it is currently practiced in three Japanese medium-size companies, and on the case of The National Union of General Workers.

II. The Ideology of Japanese-Style Management
and Labor Relations

Mainstream Japanese scholarship assumed that management in Japan is constructed on local traditions of hierarchy, collectivism, and group responsibility. The orthodox interpretation of the Japanese employment system is that the distinctive features of Japanese-style management – lifetime employment, seniority system, welfare capitalism, employee loyalty, teamwork, and workplace unionism – are modern expressions of traditional Japanese culture. Unlike the American legacy of scientific management, this perspective does not discard emotion. On the contrary, Japanese-style management fully appropriates emotion into its worldview. It is, like the American school of Human Relations, a perspective of devotion that stresses normative control.

The impressive list of scholars who support the emotionalist or culturalist view of Japanese-style management includes Odaka Kunio (1984); Hazama Hiroshi (1964, 1978, 1989); Hanami Tadashi (1979, 1981); Mito Tadashi (1994); Hayashi Shuji (1988); and Nakane Chie (1970). A more recent anthropological perspective, which nevertheless repeats the culturalist paradigm, can be found in Nakamaki (1992, 1999) and Nakamaki & Hioki (1997).

The American managerial ideology of “design”(rational systematization) contrasts, in its ideal type at least, with the Japanese ideology of “devotion”(emotional attachment). The gospel of design did, however, reach Japan’s shores in various periods and forms, and evidently left its rationalist mark on the development of Japanese management. Besides the implementation of rational systems by managers and engineers, there are Japanese scholars whose analysis of industrial relations in Japan is premised on design rather than devotion. Such scholars view Japanese industrial relations as progressive not due to cultural traditions of trust but because of their relative stability and functionality for capital as well as labor. According to Koike Kazuo (1988), Shirai Taishirō (1983) and their like-minded colleagues, pragmatic Japanese workers cooperated with post-war management to establish what we now know as Japanese-style management. In this reading, Japanese teamwork is actually framed by inter-worker competition over appraisal and promotion. Japanese workers are not “emotional creatures” but rather rational individuals characterized by long-range cost-benefit calculations, which explains the organizational use of lifetime employment.

The psychological and social discourse should therefore not be taken at face value.  Managers often talk about emotions while practicing rationalization. Studies and publications that revolve around “design” have been produced in Japan in large quantities, for example by Japanese practitioners, consultants and engineers. Japanese engineering associations were active in promoting systematization in the field of quality control, which was started with a clear rationale for design. Other engineering publications covered new rational arrangements of the production line, most notably the Just-In-Time inventory system, the work process and the U-shape assembly line. Japanese engineers and managers have also promoted rational systems of work performance, authority, workflow and payment as techniques for controlling labor. Even the hallmark of Japanese human relations, the quasi-autonomous work group, is underpinned by personnel appraisal (satei) that translates into personal remuneration.

The psychological and social discourse that came to be identified with Japanese-style management is a powerful rhetorical facade. Paternalism, benevolence, and mutual trust are among the major rhetorical components of that discourse. Paternalism (onjōshugi), widely regarded as the overarching ideology of Japanese-style management, is currently associated with the enterprise unionism of postwar Japan. However, the ideological roots of paternalism precede the postwar formation of enterprise unionism, going back to turn-of-the-century industrializing Japan. While some of the more culturalist explanations trace managerial paternalism back to Tokugawa feudal practices, we have historical reasons to doubt that paternalism has emerged peacefully as a cultural continuation. In fact, managerial paternalism was also instrumentally articulated to counter both workers’ demands and an early bureaucratic pressure for a western-style “factory law.” A coherent ideology of paternalism began to be articulated by the capitalist managerial elite in the late Meiji era. Paternalism was used, for example, to counter government pressure for factory legislation. Eventually, managers and bureaucrats have come to defend paternalism as a progressive concept which “took the best of Japan’s past and applied it to insure an economically and socially healthy future [....] As the special Japanese key to solving the labor problem”. (Gordon, 1985: 64-65).

On pre-war paternalism see Gordon (1985); Marshall (1967); and Fruin (1983). Hazama Hiroshi is one of the major proponents of this view in Japan, asserting that contemporary JMS is based on feudalist notions of paternalism, which for him mean “the beautiful customs” of “groupism, feelings of dependency, and a high regard for harmony and cooperation”(Hazama & Kaminsky, 1979: 104; see also Hanami, 1979, 1981).

A complementary view regards the consciousness of workers as supportive of and conducive to management’s usage of paternalism. Japanese-style management was made possible also because Japanese workers were seeking recognition and dignity, and appropriated the discourse of paternalism to support their own interests. Japan’s industrialization in the turn of the century provided jobs without matching statuses, and workers depended on their companies for status (Smith, 1984). Consequently, some of them bought into the managerial discourse of paternalism as a means of promoting their own interests. They appealed for self-definition by stressing their dependence upon the employer. Labor disputes were articulated in petitions that appealed not to natural rights but to sympathy and a record of loyal service. Hence, the dominant psychological contract that emerged in Japanese labor relations was primarily relational (i.e., long-term and diffused) as opposed to transactional (i.e., short-term and delineated). Relational contracts emphasize the importance of belonging and foster “membership motivation” in a way which is congruent with enterprise unionism (Morishima, 2000).

To sum up, economic and culturalist explanations of the commitment of the regular Japanese worker are complementary. Paternalism, as an emotionally-laden culturalist explanation, is complemented rather than opposed by an economic explanation that highlights the long-range cost-benefit calculations attributed to the Japanese worker. In a similar manner, paternalism was both a culturally conditioned choice and an instrument of management and labor relations. Perhaps it was this unique marriage of economic and cultural reasoning that made the view of Japanese-style management so prominent.

In what follows I focus on alternative arrangements of labor relations that have come to characterize the search for a new organizational culture in contemporary Japan. The first example is the National Union of General Workers, a cross-company Japanese union mainly for non-regular workers. This example shows the existence of a local stranger: an alternative, American-fashioned “trade” union alongside (and in conflict with) traditional Japanese company-based unions. The second example is co-partnership management, a German-inspired managerial philosophy that replaces unionization with joint consultation.

III. The National Union of General Workers(NUGW)

While the number of part-time jobs in Japan has grown tremendously over the past 15 years, it was never matched by unionization rates for part-time workers (Broadbent, 2001). In 1995, for example, unionization rates for part-time workers nationwide averaged 4 percent and 4.3 percent of women (Rodosho, 1996: 81; Rodosho, 1997; cited in Broadbent, 2001). More than half of the unions sampled by Salmon et al. (2000) reported no prioritization of woman, temporary, fixed term or agency workers, all of which have been among the fastest growing employment sectors in Japan. The common theme that unites the individuals in these diverse categories is that they have no expectations of long-term employment, receive little ore no social benefits, are excluded from the enterprise union and occupy a secondary position to the regular employees. Estimates for the current number of contingent workers vary since there is no accepted definition of the category. Houseman (1997) estimated that in 1997 31% of the U.S. labor force were non-regular. Non-regular workers accounted in 1997 for about 23% of the labor force in Japan (The Japan Institute of Labor, 2000). Part-timers, the largest category amongst non-regular workers (13.7%), are comprised mainly of housewives and used in three main industries: retail, food, and services. The increase in the contingent workers is therefore part of the process of post-industrialization or the turn from secondary to tertiary industries. As companies tend to combine the use of regular and non-regular workers to reduce personnel costs and handle specialized tasks, the hiring of more contingent workers is very likely to increase in the future. This increase may bring about a change in the social and psychological “contract” in the Japanese workplace. As more and more contingent employees join the labor market, sometime taking the place of regular workers, the periphery threatens the dominance of the core (Morishima and Feuille, 2000). Here lies a real potential for a trade union that would target general (non-regular) workers, such as the NUGW.

A different approach is that of Zensen, one of the unions in the mainstream, which has been trying to organize part-time workers (Kuwahara, 2000).

The National Union of General Workers (NUGW), or zenkokū ippan rōdō kumiai, targets contingent employees from all types of firms. It was formed in the 5th Annual Congress of Sohyo (General Council of Trade Unions of Japan) in 1954. This means that the alternative has existed for a long time, yet as long as enterprise unionism was dominant, the marginality of NUGW was taken for granted.  It was only recently, with the effects of the recession on the diversification of the labor market, that the dominance of enterprise unionism and the marginality of the NUGW have been questioned. From its start, the NUGW has concentrated its activities within small enterprises, since many of the workers in such firms are not organized. Increasing its membership from 40,000 in 1955 to 140,000 in 1978, the NUGW then underwent a gradual process of membership decline, which coincided with the general trend of union membership decline. In 1988 the NUGW even joined the unified union confederation Rengō, and later broke off from it. In 1999, the NUGW had about 50,000 listed members organized in about 1,500 branches (for comparison, Rengō currently has about 7.5 million members). Most of the branches are in small organizations, 70% of which have less than 100 employees. 65% of the members are male, and 35% are female. Not surprisingly, the NUGW organizing strategy is particularly attractive among workers in volatile, small businesses that are faced with unstable employment fluctuations.

The NUGW is also the parent organization of two interesting small unions, named the Managers Union and Network Union Tokyo. The former concentrates on the organization of middle managers, who were laid-off due to re-structuring, downsizing or bankruptcies. Since 1993, membership dues are automatically deducted from these ex-managers’ postal savings accounts and remitted to the union. In 1995, the union had more than 300 members. The Network Union Tokyo focuses on rank-and-file workers, organized mostly through consultation services over the telephone (“special hot lines”) and the Internet.

The NUGW has a unique style of action. In 1981, the union opened a telephone line consultation system to help part-time workers who are in distress. In 1984 it opened another line which responds to questions and recommends job opportunities. The emphasis is put on individual workers, rather than workers as a group. There is a one-off consultation charge of 1500 Yen (about $14) for these services, and the union expects many of those who contact the service to become future members.

In addition to consulting and representing workers, the NUGW also operates a “mutual aid society” whose activities include wedding and funeral gifts of money, loans for housing, workers credit sales, life insurance, retirement allowance, and so on. For a monthly membership fee of 300 Yen (about $2), the society guarantees services from “wedding to funeral.” According to the society’s 2000 brochure, it is natural for an organized worker to “have consciousness as a member of the working class” and thus “to think of his colleagues’ joy and sorrow.” The unorganized, non-regular worker is therefore encouraged to become organized in order to develop this consciousness. Workers are advised to let the mutual aid society help them take their future in their hands.  In 1999 the NUGW opened a homepage for its “cyber union” where general workers can register on-line and receive help and advice. The cyber union was declared “a return to the origins of the labor movement with the help of modern communication.” Interestingly, the rhetorical presentation of the cyber union emphasized its “open,” “common” and “free” nature. These denominators contrasted the “closed”, “insider” society of regular employees and enterprise unionism, as seen from the NUGW point-of-view.

The NUGW is interesting because it is exceptional. In Japan, where over 90% of the labor unions are comprised of enterprise-based unions and their industrial federations (JIL, 2000: 41), a general union is something of an outsider. It is a union fit for the unorganized, non-regular worker who also does not belong to the company-as-family. Being an outsider, the NUGW actually highlights ‘the system.’ Enterprise unionism traditionally implied several practices. First, employees of a single firm organize their own union where all employees, irrespective of their job categories (but excluding managers and temporary workers), can participate. Second, collective bargaining on wages, working conditions, and job security takes place at the firm level. Because the union is part of the company, its general mode of activity is supposed to reflect cooperation with management. Union officials often ‘cross the lines’ to become company managers. According to Japanese law, employers cannot interfere with the establishment of a union; in most cases, however, at the beginning of union formation, union organizers (usually sent by an industry-level federation of enterprise unions) visit employers to obtain their consent (Fujimura, 1997). In contrast, the NUGW organizes employees of different firms; it specifically targets contingent workers, irrespective of the consent of their employers; and while it negotiates at the firm level, too, its activity usually reflects adversarial relations with the management. From the point-of-view of the NUGW, the image of Japanese-style management (e.g., paternalistic management, the company-as-family) is very real. The psychological and social discourse of Japanese-style management is for the NUGW not a rhetorical facade but a building block of the wall between “them” (regular workers) and “us”(non-regulars).

What sort of emotions does this situation of otherness bring about? The NUGW’s psychological and social discourse lacks all the characteristic elements of Japanese-style management, such as trust, love of the company, benevolent paternalism, or group harmony. These elements have been appropriated completely by Japanese-style management for its management-labor dyad. In contrast, the NUGW self-identifies itself using a rational, civil-rights discourse, rather than through emotions. Instead of “trust”, the NUGW invokes “mutual aid.” Loyalty to the company is replaced by class-consciousness. The NUGW is very American, almost Marxist-oriented in its disposition. I am not implying that enterprise-based unions lack rationality and pragmatism, or do not have their share of labor-management adversity. However, the rhetorical self-presentation of the two types of unionization is quite different.

The NUGW also has its share of emotions. Feelings verging on desolation and despair were expressed very vividly by NUGW representatives in a session held at the annual congress of the International Industrial Relations Association (IIRA; co-organized by the Japan Institute of Labor) in May 2000, Tokyo. In regard to employers, Kusajima Manao (a representative of the Tokyo branch) lamented that the situation is tough with no prospects for bargaining. Employers do not approach the NUGW directly. When NUGW representatives seek to approach the employers, the latter are difficult to communicate with. “If we let the management know we’re coming in advance, they will postpone meeting us. But when we come without early notice, they say they don’t have time.” In regard to membership, representatives could not but look skeptically at the gradual decrease in their numbers. The decrease was explained as part of the general decrease in unionization rates (from 35% in 1975 to about 20% in 1999, see JIL, 2000). The relative decrease in the unionization rate is usually explained by the increase in the number of unorganized, contingent workers. Yet it is precisely these workers who are targeted by the NUGW. This riddle still requires an answer.

The NUGW takes much of its inspiration from American labor union activity. In the U.S., in a parallel manner to Japan, the percentage of the labor force in unions has declined: from 39% in 1954 to 10% today. There are currently about 13 million members in the AFL (American Federation of Labor) unions, including over 5 million women (Clawson and Clawson, 1999).  In the U.S., a great deal of union activity has been directed at female and minority ethnic workers in relatively low-paid service industries (Wever, 1998). Contingent workers faced by lower wages, job insecurity and few if any benefits are helped by the labor union as well as by independent labor agencies. Usually an industry union is involved, such as in the case of the construction industry where contingent work is common. Another interesting example is the hi-tech industry where temps are also common. Non-profit agencies and labor councils for temporary workers in hi-tech are now common sight in the Silicone Valley. In the summer of 1997, teamsters shut down UPS over the issue of part-time work, consequently winning thousands of full-time jobs for the part-timers. These stories were told in the NUGW session during the industrial relations annual congress by an invited guest speaker from the U.S. Meant to inspire, the stories nevertheless also threw into relief the relative disadvantage of the NUGW.

To sum up, while the case of the NUGW does not refer directly to the emotionalism of Japanese management, it is still important because the isolation of NUGW highlights the way in which the traditional enterprise system works. The creation of the NUGW reflects the growing gap between the traditional Japanese management and changes in the labor market, especially the increase in temporary workers and employees in SMEs. The NUGW, by demonstrating what it means to be a ‘local stranger,’ highlights the contours of the traditional ‘family’ of enterprise unions. Almost all Japanese enterprise unions have part-time workers employed at their workplace, but only 9 percent of these unions included part-time workers among their union membership (Furugori, 1997: 117). Facing the problem of declining membership, Rengō's 1989 policy platform called to “unionize the non-unionized” but in reality little has been done beyond rhetoric (Broadbent, 2001). The stubborn exclusion of part-timers, even when harmful to the goals of enterprise unions, thus highlights the psychological and social clutch of tradition.

IV. Co-Partnership Management

During the 1950s, Germany developed a system of cooperation between directors, managers and workers which was called co-partnership management. Two general financial features of co-partnership management included profit sharing and co-ownership of company assets. The social aspects of the concept included the cultivation of human relations, communication, and co-determination (the involvement of workers in company decision-making). Japanese companies became interested in the idea of co-partnership management in the late 50’s. In Japan, as in Germany, it is predominantly medium-sized companies, which are applying their version of co-partnership management. This is probably because in large companies the union is too strong, while in small businesses there is usually no need for formalities of management-labor relations. The Japanese adoption highlighted the social aspects of the concept while downplaying the original financial features. Great importance is attached to a formal signing of a co-partnership contract between management and employees, the issuing of a co-partnership certificate for every employee, and the formation of a co-partnership committee.

Ibaraki Mokuzai Sōgōichiba, a wholesale retailer of timber from Ibaragi prefecture, was established in 1955 and currently employs 46 regular employees and two part-timers. The workers are not unionized. Shareholders include the directors (30%), employees (8%), retired employees (8%) and customers and others (54%). In 1968 the company started to use “co-partnership management.” Since 1977, it has been sending employees for training in the Japan Institute for Co-Partnership (established in 1964). In an article entitled “running a company and human beings”, published in the magazine of the Japanese personality psychology research association (1994, 1:12), company president Ohsuga Hatsuzo explains that before the initiation of co-partnership management in 1968, the company suffered from a feeling of deep distrust, conflict and competition among factions, and accelerated confusion among employees. In 1962, seven year after its establishment, a vast amount of unaccounted expenditures by some employees was detected, causing serious unrest. The directors then reached the conclusion that distrust caused extreme deterioration of employee moral, which led to such an incident. Some of the loss was covered by the directors’ cash contribution, while only an admonishment was given to the employees.

The directors decided to enhance the confidence of employees by implementing the method of “employee counseling”(started in the U.S. in the 40’s following the Hawthorne Experiments and their interpretation by the Human Relations school). Co-partnership management was integrated, in 1964, with counseling. According to the president’s description, employees felt confident by the company’s new attitude of valuing human dignity and started to express their capabilities that were formerly suppressed. On May 17, 1968, the management and employees of Ibaraki Mokuzai Sōgōichiba signed a Declaration of Co-Partnership, whose core consisted of the following four statements (quoted from a translation of the original text):

－ Dialogue together (two-way communication)

－ Notice together (empathy and responsiveness)

－ Decide together (co-decision and responsibility)

－ Act together (motivated and enlightened activities).

The Ibaraki Mokuzai Sōgōichiba story, as told by the president, represents an emotional story of revelation. The exposition presents a period of distrust, seen as the root of all evil that eventually culminated in a “vast amount of unaccounted expenditures by some employees.” In other words, the problem of the company is explained as a case of demotivation at work. The logical solution, or denouement, is hence also presented as emotional, namely re-gaining the confidence of employees. This was achieved, first, through the benevolent responsibility expressed by the directors (who are said to have paid for the unaccounted expenditures from their own pocket), and then through the implementation of trust-building practices, namely employee counseling followed by co-partnership management. The story proves that psychological aspects of HRM such as trust and mutual responsibility are not necessarily bound to the discourse of enterprise unionism. Rather, they can be made use of by a management that seeks to establish normative control of its employees while keeping the labor union out.

Addressing the philosophy of work that characterizes his company, Toyama Takeshi (Managing Director) described how important a place the organization is for the people to live until death (2000: 9). Furthermore, “the purpose of business is not simply to achieve a profit, but it is to be found in its very existence as a community of persons… Where members establish their identity in maintaining harmony with the whole.” (p.9-10). All the rhetorical baggage of enterprise unionism is here, with one difference: there is no union. Bonuses and profit-sharing are treated in Ibaraki Mokuzai as part of the salary. There was no bonus apportioned since 1990. In 1998, employees’ salaries were reduced by 10% due to stagnation; this was also done “on the basis of understanding and trust of employees.”

The psychological discourse of co-partnership management also covers several examples of ostensible exploitation. For example, the “employee deposit system.” Money is “voluntarily” deposited by employees and becomes an interest-bearing company’s asset which is “enormously important for the liquidity of the company and cannot be ignored (ibid. p.13). Despite much talk about co-ownership, employees’ share is limited to 15%. Furthermore, only employees with more than five years of service are allowed to be shareholders. Finally, employees are not guaranteed lifetime employment and any form of organization other than through the practices of co-partnership is discouraged.

Mitsuwa Corporation is a Tokyo-based producer, retailer and caterer of noodle and rice food products. The firm is an example of the diversification of the labor market, employing 305 regular employees, 247 semi-regular employees, 201 fixed-term employees, 81 contractors, 38 casual employees, and 15 contract employees (total 877, as of March 1, 2000). It is a medium-scale company with five divisions, two factories, and about 100 stores in Japan, some of them are part of an employees’ independent store chain. In 1976, Mitsuwa company introduced co-partnership management. Ogawa Masamoto, chairman of the company, explained that the shift to co-partnership management was driven by his judgment that the apprentice system in the shop has serious problems in terms of human relations.

The process was not without problems. As the company grew, and many general employees joined it, they misunderstood the concept of co-partnership management, “taking only the comfortable side of it (respect of human beings) without being responsible and accountable”(interview with Ogawa Masamoto). In the words of the chairman, “everyone became buddies and thought they participate anyway.” In an attempt to correct this, management opened the “Mitsuwa Academy” where employees are taught the ways of co-partnership management. According to the chairman, the Academy is a kind of an “ethics center” (see Kondo, 1990) where workers undergo self-development in the traditional merchant spirit (Shōnindō). This ethics of work implies that self-development can only take place within the framework of organizational development and that “meaningful work” means “meaningful life.” For this purpose, the Academy provides training in “speaking together (two-way communication), feeling together (co-responsiveness), deciding together (co-decision) and taking responsibility together (co-responsibility).” Interestingly, one of the rules of co-partnership developed in the company is called “self-training” and stresses that all partners (i.e., employees) endeavor to build their character, self-development and self-discipline for becoming “attractive members of the company”(interview with Ogawa Masamoto). Self-training is a hallmark of normative control in Japanese-style management, an institutionalized form of self-inspection.

The Mitsuwa company, like Ibaraki Mokuzai, uses the “co-ownership” principle to capitalize on workers’ money to a certain extent. 70% of bonuses, for example, are retained in the company as employee “deposit.” If there is capital increase in the company’s performance, workers can convert this money to stocks and become share-holders. To further encourage trust-based relationship on the shop floor, the company emphasizes autonomous group activity at all workplace levels. The “tyranny of the team ideology” (Sinclair, 1992) is in full swing here. The company motivates its employees with performance bonuses, measured according to personal achievements of company-set targets.

My third and last example, the Shinano Pollution Laboratory Corporation, is a small-scale hi-tech company established in 1972. It currently employs 39 employees, 25 males and 14 females, including two dispatched workers. The company provides environmental measurement services related to water pollution, air pollution, noise and offensive odors, as well as work environment assessment services. Since 1996, the company has been involved in the process of introducing co-partnership management. Once again, the motto for this project is emotional: “creating an environment within the company where mutual trust prevails among all stakeholders.”

Abe Takao, Director of the Shinano Pollution Laboratory Corporation, in his report to the IIRA special session on co-partnership management, Tokyo, 30 May 2000.

The Shinano Pollution Laboratory Corporation represents a young, small-scale, hi-tech company undergoing a process of organizational change in the form of co-partnership management. On-going supplementary changes include a system for information sharing, fair distribution of gains, and co-determination. Yet like its elder brothers, Mitsuwa corporation and Ibaraki Mokuzai, Shinano also employs a predominantly psychological and social discourse in selling co-partnership management, while downplaying the fact the its employees are offered this arrangements as their only option. Trade unionism or enterprise unionism are forbidden. In fact, co-partnership replaces enterprise unionism by establishing an independent “locale” for labor-management relations within the company. It seems that this is the ultimate explanation for the support that co-partnership management has received from Nikkeiren (the National Federation of Employers). Japanese employers have found in co-partnership management a way of talking about industrial democracy without having to bargain with a union.

Co-partnership management is very similar in principle to Japanese-style management and enterprise unionism. Their emotional discourses reflect and emphasize that similarity. Co-partnership management was also tried by a much larger and more traditional Japanese company, Kanebo, originally a textile company. Kanebo managers have promoted the institution of a company union. After the war, as the textile industry underwent a series of recessions, Kanebo did not lay-off its employees, remaining loyal to its motto of “humanitarian love and justice” (Fujimori and Ouchi, 1996:37). In the 70’s, a form of co-partnership management was added to the existing labor-management situation. The dissolution of Kanebo’s enterprise union into a form of co-partnership management is intriguing. It shows that large Japanese companies, with their strong enterprise union, in fact resemble employee-managed firms. It therefore transpires that enterprise unions are not necessarily the representatives of employee interests, because the activities of employee-managed firms usually come to supersede the functions of labor unions. When employees and managers share core areas of management, labor unions with a confrontational attitude will lose their reason for existence or be forced to change (see also Kuwahara, 2000).

V. Conclusions

This research examines aspects of change and continuity in Japanese industrial relations by looking at the National Union of General Workers and co-partnership management cases in non-union firms. These different cases illustrate how important psychological and social elements of Japanese management practices are maintained on management initiatives in the form of co-partnership management and by excluding non-enterprise unions (such as the NUGW) even in the midst of significant changes in labor markets in Japan. The Japanese system is shown to respond to changes in the labor market by inducing employees’ commitment even in non-union firms by stressing emotions, psychological contracts and trust, embedded in traditional Japanese management culture. As with all case study research, the findings cannot be reliably generalized. The cases generate grounded theory that needs to be tested in other organizational contexts. However, with very little written in English on non-regular forms of unionization in Japan, and only a small amount of empirical data in Japanese, this exploratory ethnography provides a step in the direction of building a preliminary database of relevant case studies.

There is no Japanese law regulating the forms or functions of employee representation in the non-union sector (Tsuyoshi and Morishima, 1999). Non-conventional unions, such as the NUGW, or non-conventional forms of employee representation, such as co-partnership management, can therefore vary in form and function. Some can engage in collective bargaining with the management, while others can represent the workers in joint consultation forums. Still others can be “friendship societies” designed primarily for social purposes. The two different forms of employee representation discussed in this paper – the NUGW and co-partnership management – are both examples of the non-union sector. Indeed, Sato (1997) argued that the latter form － joint consultation and employee associations as exemplified by co-partnership management – is the most likely candidate to replace traditional unions. The joint consultation system is probably the best-known mechanism for protecting employee interests in non-union firms. According to a survey conducted by the Labor Ministry Secretariat Policy Research Department (1995), approximately 30 percent of non-union establishments in Japan have joint consultation committees.

The alternative forms of employee representation discussed in this paper show that while labor relations in Japan are becoming more versatile, the psychological and social discourse of the traditional Japanese-style management still maintains its prominence. Two complementary explanations can be offered for this phenomenon. First, the social and psychological discourse of Japanese-style management could have persisted even after the decline of lifetime employment and enterprise unionism because it reflects a basic emotional pattern that underpins Japanese culture. Such an explanation would be offered by contingency theory, which holds that organizations, in different institutional and cultural settings, will seek to maximize their “fit” with those environments and thereby enhance their viability (Scott, 1987). According to a perspective of ‘cultural contingency’ (Lincoln and Kalleberg, 1990: 18), the psychological and social nature of HRM policies that underlie Japanese-style management is fitted to Japanese norms and values.

Second, Japanese-style management could have persisted because the alternative forms of employee representations haven not really changed the dynamics of internal labor markets so characteristic of Japan (Koike, 1988). The two non-union employee representation mechanisms discussed here both strengthen the belief among managers and employers that workers exercise voice. However, since non-union mechanisms usually do not allow workers recourse to strikes, these alternative forms of employee representation are not related to outcome variables such as job security, wages or working conditions (Tsuyoshi and Morishima, 1999). Workers might therefore feel that the NUGW, or employee representatives in joint consultation, are not so powerful and cannot guarantee positive results when negotiating with the management. If this is the case, then the Japanese worker – regular as well as contingent – may still feel emotionally bound to the once-dominant benevolent paternalism of Japanese-style management. The God (Japanese-style management) may have failed, but the new idols are not yet powerful enough to provide protection for their followers.

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