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International Journal of Human Resource Management, Human Resource Management Journal, Organizational Dynamics and Asian Business and Management. In 2005 he co-edited a book entitled “Japanese Management: The Search for a New Balance between Continuity and Change” with Palgrave. Anne-Wil Harzing is Professor in International Management at the University of Melbourne, Australia. Her research interests include international HRM, expatriate management, HQsubsidiary relationships, cross-cultural management and the role of language in international business.

She has published about these topics in journals such as Journal of International Business Studies, Journal of Organizational Behaviour, Strategic Management Journal, Human Resource Management, and Organization Studies. Her books include Managing the Multinationals (Edward Elgar, 1999) and International Human Resource Management (Sage, 2010). Since 1999 she also maintains an extensive website (www. harzing. com) with resources for international and cross-cultural management as well as academic publishing and bibliometrics. Abstract The objective of this chapter is to develop suggestions as to how Japanese multinational corporations (MNCs) might best make use of foreign, here specifically American and German, HRM practices in order to reform their own HRM model. These suggestions are based on a large scale empirical study, encompassing responses from more than 800 HR managers. The learning possibilities for Japanese companies from abroad are analyzed on two different levels: at headquarters and at subsidiary level.

One obvious difficulty we are presented with if we wish to answer the question what Japan can learn from ‘the West’ is the selection of countries that are representative of ‘the West’. In this study we limit our empirical research to the inspirations Japan might receive from the USA and Germany. This selection has some merit, in representing the largest and the third 2 3 largest developed economies in the world (with Japan being the second largest economy), and the economically dominant nations of North America and Europe (with Japan being the leading economy in Asia).

In addition, the USA and Germany each embody the prime example of two of the three main varieties of market economies: the USA representing the free market economy of Anglo-Saxon countries and Germany the social market economy of continental Europe (with Japan embodying the third main variety of market economies, the government-induced market economy of East-Asia). Furthermore, according to Smith & Meiksins (1995: 243) the USA, Japan and Germany are most frequently referred to as role models, “as they provide ‘best practice’ ideals from which other societies can borrow and learn. Consequently, these country models have been subject to numerous comparative analysis (Thurow, 1992; Garten, 1993; Yamamura and Streeck, 2003; Pascha, 2004; Jacoby, 2005). As economic performance and growth paths vary over time the role of a ‘dominant’ economy also rotates among countries. In the 1950s, 1960s and most of the 1970s the American management style clearly was dominant and a common expectation was that it would spread around the world, gaining application in many foreign countries.

From the late 1970s to the early 1990s, this argument increasingly was applied to Japan (Mueller, 1994), and to a lesser extent and limited to the European context, to Germany (Albert, 1991; Thurow, 1992). Since the implosion of the Japanese economy, the stagnation of the German economy, and with the advent of globalization, the conventional wisdom over the last one and a half decades up to the current economic crisis has been that the American management model is particularly well suited to provide the necessary flexibility to cope with rapidly evolving economic and technological conditions.

Consequently, the USA became again the dominant role model (Edwards et al. , 2005). This study employs a very carefully matched design in which we investigate the same three countries (Japan, the USA and Germany) as home and host countries. We not only study HRM practices at headquarters (HQ) in each of these three countries, but also the practices of the subsidiaries of MNCs from each of the three countries in the two other respective countries. As a result, we re able to compare the HRM practices of nine different groups of companies: HQ in Japan, the USA and Germany, subsidiaries of Japanese and German MNCs in the USA, subsidiaries of Japanese and American MNCs in Germany and subsidiaries of American and German MNCs in Japan. This design will enable us to disentangle the inspirations companies seek from abroad to a far greater extent than has been possible in other studies. 3 4 The structure of our analysis is separated into two main sections. The first main section describes empirical results from HQ and the second main section depicts the situation at subsidiary level.

For each of the two main sections, first the context of existing research is summarized. Subsequently, the methodology of the empirical research is described. Findings are then presented and subsequently discussed. Finally, suggestions are made as to how the Japanese might best make use of foreign HRM policies to reform their own HRM practices and ultimately improve competitiveness. Research context As mentioned above, the Japanese HRM model has often been recognized as a key factor to the rise of the Japanese economy, particularly during the 1980s (see for example Inohara, 1990).

However, the same Japanese HRM which until recently has been much celebrated in the West, and presented as a role-model to be learned from (see for example Vogel, 1979; Ouchi, 1981; Peters and Waterman, 1982; Bleicher, 1982; Hilb, 1985), is now increasingly viewed as outmoded, and necessitating substantial reform (Frenkel, 1994; Smith, 1997; Yoshimura and Anderson, 1997; Crawford, 1998; Horiuchi, 1998; Ornatowski, 1998; El Kahal, 2001; Pudelko, 2005, 2007). Others, however, continue to stress its inherent strengths and warn against significant change (Kono and Clegg, 2001; Ballon, 2002; Ballon, 2006).

On the other hand, American understanding of HRM has traditionally been viewed by Japanese managers with skepticism. It is regarded as contradicting in many ways the broad concept of ‘respect for people’ (Kono and Clegg, 2001) and the aim of ‘human resource development’ (Ballon, 2002) that is ingrained into the Japanese management philosophy. In particular, the idea of defining the employees of a company as ‘resources’ (instead of members of the company ‘family’) that need to be managed (instead of ‘developed’) runs contrary to the key concepts of traditional Japanese HRM.

However, in response to the deep crisis of the Japanese economy and management model, which has lasted for more than a decade now, it is clear that some shift toward Western management principles is taking place 4 5 (Frenkel, 1994; Ornatowski, 1998; El Kahal, 2001; Matanle, 2003). Thus, mirroring the economic growth patterns, adoption of Japanese HRM principles seems in the USA to be largely an issue of the past, whereas the question of adoption of American HRM policies is more current in Japan than ever.

The key issue in Japan seems to be to find a new balance between the continuation of traditional (human resource) management principles and changes inspired largely by Western or more specifically American strategies. Regarding finally the specific German understanding of (human resource) management, it has to be concluded that this is a subject of no significant importance in Japanese business research, if it is considered at all (Pudelko, 2000a). Methodology Data collection and sample It may be noted from this brief review that existing literature in this field is in some respects inconclusive or somewhat contradictory.

Nor has it generally been informed by empirical examination of HR managers’ own views on cross-national adoption processes. As this group might be expected to constitute the chief change agent, empirical insight appears in this context all the more important. Accordingly, this chapter provides data on the perceptions of HR managers from three different countries on the possibility of learning from each other. In this task, a quantitative approach seemed to be the most appropriate.

The analysis is therefore based on empirical data which have been drawn together from an extensive survey (Pudelko, 2000a-c). The heads of HR departments from the 500 largest corporations of Japan – and for comparative reasons – the USA and Germany were selected as units of investigation. It was assumed that the heads of HR departments would have the highest degree of experience, knowledge and vision with regard to the issues being investigated, due to their senior positions within corporate hierarchies.

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