Japanese Into UK Industrial Relations
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We have looked at different HRM Ideologies, we shall look briefly discuss the effectiveness of how UK companies embraced Japanese production and personnel methods during the 1980's and 1990's.


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Whereas the Japanese model of industrial relations has remained relatively intact during the post war era, industrial relations in the UK have swung in a pendulum fashion. During periods of Labour government, high levels of legislation were introduced to maintain employee rights. Whilst the general tendency towards employer welfare has come under Conservative governments.

With the emergence of Japan as an economic power from the mid 1970's, UK industry has adopted a variety of Japanese style management techniques. We have in both the Operations and Quality sections of this web site discussed the various Japanese practices used in the UK workplace. Let us now examine how effective they have actually been.

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With the economic prominence of Japan during the later part of the 1970's, western countries, put increasing pressure on Japan to either open it's highly protectionist policies or face the consequences.

As a result of the 'Yen Crisis' of the early 1980's, and the fear of European nations using protectionist policies towards Japanese business, there was a great rush of outward investment from Japanese business, Elger & Smith (1994) describe the situation as:

'In general terms motivations for Japanese overseas investment relate to the need to recycle Japan's trade surpluses, the fear of growing protectionism in world markets, appreciation of the Yen which reduced the costs of overseas investment, increased prices of Japanese real estate and stocks which pushed investment out and the globalization of trade and corporate structures of Japanese multinational companies'

Against historical data, it can be seen that between 1985 and 1990, Japanese overseas investment ran at twice the level as for the entire 30 year period prior to this!. It appeared that Japanese companies were trying to get a foothold into UK and European markets prior to protectionist polices being implemented by the EC.

The bulk of Japanese overseas investment during the 1980's came to the UK particularly in the motor industry, as Strange (1993) states:

'All three of the major Japanese automobile manufacturers (Nissan, Honda & Toyota) have located their European assembly operations in the United Kingdom, in part because of the labour costs, but also in part because of the absence of a large volume indigenous manufacturer'

The bulk of the Japanese investment coming into the UK during the 1980's could be attributable the Conservative government of the time, which enforced a low wage policy.

With the influx of Japanese direct investment entering the UK, some of the obstacles facing Japanese business transplanting their operations into the UK, during the establishment phases, have not come from the ability of workers, moreover from traditions. Dunning (1986) states Japanese firms coming into the UK, face problems other than from the employees, which include:

'There are many obstacles .... these are more to do with inappropriate institutions, unhelpful work traditions and a tradition of adversary industrial relations, than with the differences in the technical and commercial competence of British managers or the innate ability of British workers.'

We shall now look at the three biggest Japanese companies which have have set up business in the UK:

NISSAN - This was the first to set up a Japanese car plant, with first plans announced in 1984. The Sunderland plant has been used as a focal point as it showed the conflicts that could arise as a result of trying to implement Japanese style management techniques.

Wickens (1987) describes the scenario at Nissan 'We have no inherited history. We have no inherited problems'

The Nissan plant decided to enter into a single union, no strike agreement with the Amalgamated Engineering Union (AEU). However the Transport and General Workers Union (TGWU) was against this agreement, arguing that it led to weaker employee representation.

Nissan operates what has been described as a rugged recruitment program, with the end result being employed in a job which paid significantly lower rates than the industry as a whole, but which was in an area of high unemployment.

One of the problems highlighted from the running of the zero defect regime has been the increased injury and stress problems for employees Wickens (1987) actually states that on the Nissan application form, it is stressed that the jobs on offer at Nissan, are of a very physically demanding nature. The notion of workers working at maximum capacity does suggest that this will result in higher incidents of health problems.

TOYOTA - At Toyota, the recruitment procedures have seen a rejection of industry specific in order to allow for a 'fresh' indoctrination. Winfield (1994) states:

'Applicants for assembly work who have had previous exposure to traditional UK motor manufacturing methods were screened out in the early stages. This is because traditional attitudes, allegiance to traditional job descriptions, and adversarial 'demarcation mentalities' were perceived as being too expensive to eradicate and to remove with new habits of working'

This could on the other hand be perceived as aiming for a less knowledgeable and un-reactionary workforce.

HONDA - Unlike the other two transplants, no specific training departments, and no union agreements are in use. Mueller (1992) states:

'There is no need for a training department, because it is the line managers responsibility to train their people ... No unions are recognised, and there is no company council'

The general consensus is that new greenfield sites provide the best means by which to implement the Japanese systems. This is based on the premise that greenfield sites offer a fresh platform, often based in areas of high unemployment, which can be utilized to install often controversial practices such as single union/no strike agreements.

However Newell (1993) suggests that the policy of using greenfield sites is flawed due to several factors such as:

  • EMPLOYEES - Where theory suggested greenfield sites recruit local long term unemployed, practice showed 'poaching' skilled employees from local employers.

  • TRAINING - Despite claims of high levels of training, Newell's survey showed dissatisfaction with training policies. Respondents felt training was of a too short nature, lacking any on-going formal process.

  • PAY & BENEFITS - Pay levels for greenfield sites have been either equal or below national levels. Management were shown to be unhappy that under single status, the gulf in differentials between them and shopfloor employees had been reduced by standardised benefits.

  • PROMOTION - One of the major attractions of joining a greenfield site, is improved chances of promotion. The Newell study showed that employees actually felt there was less chance of promotion as there were flatter organisation structure.

  • UNIONS - Although greenfield sites, via single union agreements have shown high levels of membership, the fact of no-strike agreements led employees to question the validity of their trade unions under the Newell survey.

  • INVOLVEMENT - The cornerstone of the success of Japanese manufacturing companies, has been in the high level of worker involvement. Newell suggests that although employees valued being asked questions, they actually felt that the vast majority of their suggestions were ignored.

  • MANAGEMENT - The study suggests that  a lot of employees felt that the new companies were badly managed.

We shall now look at the UK companies emulating Japanese management styles.

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In the UK, the rise of the adoption of Japanese style production and personnel practices came into common practice during the early 1980's. This was as a result of trying to achieve the same level of quality and productive output of their Japanese counterparts, in order to gain cost advantages.

Within the sphere of the motor industry, examples of the adoption of Japanese practices comes from Lucas Electrical, Ford, and Rover.

LUCAS ELECTRICAL - In it's introduction of Japanese style techniques, the company used a rather macho style of management, As Turnbull (1986) states:

'The letter ... a strong ultimatum to the workforce 'accept our survival plan or we will close the business' ... The company reorganised the need to maintain negotiations with trade unions once acceptance has been guaranteed.'

The company did not deploy the Japanese system as effectively as it could have, as there was a strike action threat. It did result in an initial decline in output. This in turn had a knock on effect for the users of Lucas products, with continual Just In Time production, if one element fails, then it can lead to detrimental effects on the rest of the processes, as Oliver & Wilkinson (1989) state:

'In 1986 a strike at Lucas Electrical rapidly led to 12,000 layoffs at Austin Rover ... Part of the reason for the speed and severity of the stoppage was the adoption of JIT deliveries'

A series of conflicts between workers and management existed for some time. However the re-organisation in terms of Lucas did result in increased profits.

FORD - From being the symbolic bastion of Fordism, Ford provides an interesting example of an organisation trying to make the transition from Western to Japanese management styles.

Ford realised the potential of Japanese techniques as far back as the late 1970's. The first phase of Japanisation came in the 'After Japan' campaign which saw the implementation of quality circles at Ford in 1979.

Starkey & Mckinlay (1989) point out that although the adoption of Japanese methods aimed at achieving similar cost advantages as the Japanese, were in stark contrast to the core philosophy of Ford. The shift in ethical practices of strong leadership and limited employee roles to a situation in which employee roles were paramount in the functioning of quality improvement.

The failure of 'After Japan' was attributed to Ford's unrealistic time scales for implementation, and the low level of trust in the scheme from employees.

The successor to 'After Japan' was 'Employee Involvement' and 'Participative Management', which aimed to address the problems of both employees and put forward new directions for management, with more realistic timescales.

The new 'Employee Involvement' began to take place in the 1985 Pay and Working Practices Agreement. Ford's 1985 deal cut job classifications from 550 to 52, and they adopted the notion of team working.

By 1988, the company was seeking to extend the process by getting employees involved in flexible working practices. This process led to a national strike with banners saying 'We're Brits not Nips'. This showed the rejection of the practices by the employees.

The 1988 strike the company aback, as with Lucas, there was a knock on effect, this time other Ford sites across Europe rejected the new working practice. The result was that Ford announced closures in its plants across Europe, Oliver and Wilkinson (1990) suggest that the strikes showed how the power bestowed on the workers via such processes could be rejected in the UK.

A further episode regarding the Dundee project arose, Ford signed a single union agreement, but this erupted into problems with other trade unions, who wished to see the same sort of deals as in other Ford sites in the UK. In the end the haggling between the unions and Ford's resilient stance on having a single union agreement resulted in the withdrawal of the Dundee project.

Since the Dundee and 1988 episodes, the pursuit of Japanisation by Ford's UK plants has received a mixed response, from outright acceptance  to outsight hostility. Some of the reasoning behind the attempts could be attributed to both lack of strategic foresight, and offering high pay increases initially for the acceptance of Japanese techniques.

ROVER - In quite stark contrast to the problems of implementation seen at Lucas and Ford, the experiences of Rover are quite unique.

According to Rose & Woolley (1994), Rover was during the 1970's stuck in both an inflexible production system, whilst also suffering from high levels of mistrust from workers. The opportunity for changing structure and culture came during the 1980's when Rover became part of the British Aerospace group.

The revival of the Rover group throughout the 1980's when it was actually under both a nationalised industry and limited company, was attributable to Graham Day, who initiated a process of revival which Rose & Woolley (1994) describe as:

'The transformation of union-management relations from one of perennial conflict to one of mutual accommodation'

Rose & Woolley (1994) looked into the situation at Rover during the 1980s via management and employee surveys. The results showed that although the traditional them and us ethos existed, all the parties involved wanted the business to succeed and were adaptable to embracing change, initial feelings towards Japanese methods were mixed, but over a short period, everyone realised they had to be adopted to ensure survival.

The key factors of the Rover system during the 1980's was that it had been implemented with relatively small union resistance. The results did see a dramatic upturn in the fortunes of Rover during the 1980s. It was unfortunate the way the business was handled by BMW.

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The success of the Japanese system can indeed be attributed to both the sustained political consensus, but also the production and personnel practices of Japanese companies.

The issue of transferability into the UK needs careful analysis, transferability is a difficult subject to deal with, as the substance of the new production and industrial relations techniques are undisputable in terms of generating increased productive output.

The debate is whether they should be used, because the industrial relations, cultural, political and economic conditions are different in the UK. Domestic firms practicing Japanese style production and personnel systems do find it more difficult than anticipated to costs continually without causing conflicting industrial relations.

Many firms in the past who have tried to emulate Japanese companies, have become concerned with one element, missing the totality of the Japanese system.

If UK firms are to learn from their mistakes, they should appreciate that the move from standardisation to flexibility lies at the heart of the problem. The success of cellular production depends vitally upon worker co-operation within the system.

The task for UK firms is to construct a more democratic framework in which a two way flow of information exists, and provide greater autonomy for the workforce. Management must progress beyond the macho techniques displayed by Lucas.

The success of the Japanese system over times of wavering demand is in the intricate usage of both temporary and permanent workers, together with the ethical practice of trying to engineer a culture in which people will do anything for the good of the company.

The cultural aspects will be a very much more long term process. As the shifting of national ideology from working simply for subsidence (as it has been since the days of Adam Smith) towards a new ideology being that of 'working for the team/company approach' cannot be achieved overnight.

The stigma of the 1970's industrial disputes era and the controversial 1980's trade union eradication and the 1990's stagnation will still ensure a sense of mistrust between workers and management exists, but within the next working generation we will see a shift of the them and us ethos.

Any strategy for business, needs to be done in a long-term approach. A one off approach as shown by Ford will not work. Any organisation contemplating moves towards Japanisation should be using long term time scales to fully utilise the benefits and carry out the desired cultural changes. Quality and JIT production systems are two vital elements of the Japanese system, which when imported into the West have had one initial burst of enthusiasm and then rather lamented usage, resulting in very short term benefits and adoption.

Successful adoption of any strategy which effects the workforce can only be achieved if employees are treated as strategic resources.

Successful companies are those which nurture and value their employees. UK industry should move towards more harmonious relations, with fully democracy at all levels taking place, in order to fully reap the benefits of future changes in strategic direction and sustain growth in productive output.

The adoption of Japanese style production and personnel practices and for that matter any competitor nation strategies which can result in enhancing competitive advantage should be investigated. However in trying to emulate such models, the social and cultural factors of that society must not be overlooked. 

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