“Unbelievable!” An executive whom I know well threw up her arms in dismay. “Why did they lay off their employees so abruptly? They are a leading Japanese company with a treasure chest of retained earnings that could carry them for years!”
She says with a voice of confidence that the renowned Japanese corporate executive that she admires would never make such a decision. When his company is under hard-times, management and employees buckle down together. And when things turn around, his people remember how they were treated, and loyalty to the company strengthens.
“That’s why his company has never recorded an annual loss since he established it while he was still in his 20’s,” she declares with admiration.
Perhaps drawing a direct parallel is not entirely accurate, since there are different circumstances that govern different industries and companies. However, especially during this most difficult hour, how an executive handles his company’s labor issues helps us to see the core values of corporate management.
Generally, a company that adjusts their labor costs accordingly to the rapid deterioration of their corporate environment is looked upon favorably from the markets. On the other hand, if a company is seen as continuing to carry excessive labor costs, thumbs go down across the global capital markets.
The general impression is this. So-called global standard is widely seen as a product of the western societies’ values of rational profitability and efficient use of capital. On the other hand, the Japanese standard still seems to place in high regard, life-time employment and other management practices that are based more on emotional and psychological values