ISSN 2189-9592

Journal of Japanese Management
Vol. 5, No.1, November 2020

JFMRA
Japan Federation of Management Related
Academies

Editor-in-Chief （Vice President）
Yukio Takagaki (Japan Academy of Management, Surugadai University)
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Takabumi Hayashi (Japan Scholarly Association for Asian Management, Tokyo Fuji University)
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Hisamitsu Ihara (Japan Society for Applied Management, Tokyo Fuji University)
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University)
Yoshihiro Tokuga (Japan Accounting Association, Kyoto University)
Akira Uchino (Japan Society of Business Mathematics, Senshu University)

ISSN 2189-9592

Journal of Japanese Management
Vol.5, No.1, November 2020

JFMRA
Japan Federation of Management Related
Academies

Journal of Japanese Management Vol.5, No.1, November 2020
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Journal of Japanese Management Vol.5, No.1, November 2020

ISSN 2189-9592

Contents

Strategy and Management Behavior of Medical Malls: Focusing on Competition over Location
and Clinical Departments・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・p.1
Atsushi Ito

Effect of Empowering Leadership on Creativity and Ability of Employees: Comparison ofRegular and Non-Regular Employees ・・・・・・・・・・・・・・・・・・・・・・・p.18
Kou Kitano, Mikiyoshi Aoki and Masayoshi Toma

Government Evaluations in Japan’s Municipalities Based on Nationwide Survey Data

p.35

Yasutoshi Moteki

Recommended Paper by Japan Cost Accounting Association

Clarification of characteristics required for cost information: Building a framework of “Costinformation quality” ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・p.51

Keita Iwasawa

Journal of Japanese Management Vo.5, No.1, November 2020

ISSN 2189-9592

Strategy and Management Behavior of Medical Malls: Focusing
on Competition over Location and Clinical Departments
Atsushi Ito

Kitami Institute of Technology
Japan Academic Society of Hospitality Management
E-mail: iatsushi@mail.kitami-it.ac.jp
Abstract
Clinics across Japan are competing for location and clinical department. As an example of thisphenomenon, medical malls have recently been developed throughout Japan. In this study, we
conducted a comprehensive survey of medical malls in Japan, focusing on location and competitionin clinical departments, and then analyzed their strategies and management behavior. First, we
identified 2,501 medical malls, 9,539 clinics, and 1,869 pharmacies. Of the medical malls, 80% werelocated in Tokyo, Kanagawa, Osaka, Hyogo, Chiba, Hokkaido, and Saitama Prefectures. Second,
multiple regression analysis was conducted to examine whether the medical malls’ location choice
was based on strategic behavior. Population density had an affected but not related to hospital
location. Third, we analyzed the growth rate of 33 clinical departments from 2008 to 2019 in order toclarify the increasing effect of medical mall clinical departments. As a result, 28 clinical departments
including gastroenterology, allergy, pediatric dentistry, rehabilitation, orthodontics, etc. increased
remarkably. In light of the above, it can be said that medical malls are strategically clustered inurban areas with high population density and good access to transportation and living. In addition,these specialists may differentiate themselves from those in existing clinics by operating within a
medical mall. These findings point to the existence of inter-clinic competition.
Key words
Medical Mall, Clusters of Clinics, Strategy and Management Behavior, Competition over Location
and Clinical Department, Complete Survey(1) Introduction

been pointed out in the field of management

1. Identification of the problem

studies as a paradox to this trend. These issues

In recent years, amid the globalization ofare an important theme in the study ofthe economy and advancement of countries

competitive strategy, regardless of industry

toward an information society, geographical(Porter, 1998).

advantage in economic activities has become

Clusters are geographic concentrations ofless important than in the past. However, theinterconnected firms and institutions in aphenomenon known as “clusters,” in which

particular field (Porter, 1998). In Japan, clusters

firms are concentrated in specific regions, has

specializing in specific industries have been1

Journal of Japanese Management Vo.5, No.1, November 2020

ISSN 2189-9592

identified throughout the country (Yamawaki,

170,000 (Ministry of Health, Labour and2002). In particular, they are said to contributeWelfare, 2014). In other words, the clinic market

significantly to the competitiveness of Japaneseis saturated, with clinics having to compete forfirms and to economic development (Jankowiak,

location and departments (Yoshida and Kohno,2011). Meanwhile, to ensure equitable access to2007). One example of this phenomenon is thehealth care in Japan, the government has set a

medical mall, which is a cluster of clinics

policy of uniformity in the supply of health carestrategically formed to give specialists a

by defining medical areas based on the medical

competitive advantage. In Japan, SL Medical

plans of each prefecture. Therefore, the numberGroup was established in Nagoya City, Aichi

of hospitals and doctors per population is, to an

Prefecture, in 1972. However, if there is noextent, evenly distributed as far as the county

competition, then how can the formation oflevel is concerned. In addition, recent advancesthese clusters of clinics be explained? The

in ICT have improved access to health care,answer to this question is not self-evident and ismaking location less advantageous than in thetherefore open to debate.

past.

A medical mall is not a medical facility as
Furthermore, Health care is known as an

defined by the Medical Care Act; rather, it isindustry where the principle of competition does

generally an establishment where multiple

not work and the market mechanism does notclinics and pharmacies are concentrated in afunction effectively (Akerlof, 1970). As such,specific

health care clusters are unlikely to be formed.

management in Japan is generally inefficient,

However, does this premise apply to medical

andcare clinics in Japan? In principle, the domestic

management is strongly regulated to ensure

medical market is regulated under the public

quality, reliability, and safety. In particular,

medical insurance system, which does not allow

clinics are significantly less efficient andprice competition. Given that the number of

productive than hospitals because they are

hospitals and beds is regulated in the regional

primarily run by a single doctor. Moreover,medical care plans of each prefecture, there is

medical practitioners are not trained inlittle freedom in management compared withmanagement, and their knowledge in this area

ordinary companies (Matsuda, 2019).

tends to be poor. However, medical malls often

However, the market environment for

space

labor

(Ito,

2020).

productivity

isHealthlow,carebecauseinvolve multiple clinics and pharmacies, plus aclinics is vastly different. For example, sinceconsulting

organization

most clinics have no beds, the initial cost to open

management support for handling issues inthem is low compared with hospitals with apublichospitalization function, and the barriers toorganization, and facilities. Medical mallentry are likewise low. Therefore, doctors canpractitioners receive management support fromfreely open clinics in any region, and except forthis organization, which allows for division ofanesthesiologists, they can profess to be thefunction and collaboration, thus improving the

majority of clinics.

quality and efficiency of clinics. As the quality ofrelations,thatfinance,providesaccounting,

In recent years, the number of clinics

health care improves, costs can be controlled

nationwide, including dental, has reached(Porter and Teisberg, 2006). Therefore, medical
2

Journal of Japanese Management Vo.5, No.1, November 2020

ISSN 2189-9592

malls may be superior to existing clinics insupportedthedevelopmentofclusters

terms of management.

(Motoyama, 2008). In particular, medical malls

Medical malls are advantageous tohave emerged as clusters of clinics in the healthphysicians, such as enabling the provision ofcare sector, but the role they play remains

high-quality medical care in a comprehensive

unclear. Clinics may form clusters as a strategicmanner and the sharing of expensive testing

intention to gain advantages in the sector’sequipment by establishing a network system incompetitive market environment. This is thewhich multiple physicians work together toresearch question of our present study.

practice group medical care. This is expected toComprehensive discussion of inter-clinic

improve ability to attract customers andcompetition is scarce. We assumed that if

profitability (Ito, 2014; Lin and Chen et al.,competition is working, the medical mall should

2006).

act on a different strategy from existing clinics.

Meanwhile,the

For example, multiple specialists working

plurality of clinical departments with hightogether to practice group medical care havespecialization, as in the outpatient department

advantages that cannot be obtained throughof a hospital. Therefore, users can access moreindividual practice, such as a reduced burden on

highly specialized medical care more efficiently

doctors and improved quality of medical care.

compared with other clinics (Bobbitt; 2011, Ito,

Therefore, doctors operating their own clinics

2016a) 1 .

Thus, if medical malls benefit both

may consider forming a cluster (Zwiep et al.,doctors

andinter-clinic2018). Meanwhile, if there is no competition, thecompetition, there is some economic rationality

behavior of the medical mall is the same as thatto their operation (Hill and Hack, 1985).

of existing medical clinics; that is, the medical

However, only 28.9% of medical malls are linked

mall is merely a specific space that happened toto one another, so the case may be that multiple

have multiple clinics. In other words, theclinics happen to be gathered in a specific space

existence of competition is reflected in theby chance (Ito, 2016b). To confirm the existencelocation and clinical departments of the medicalof competition among clinics, we sought tomall. Therefore, the purpose of our research was

examinemanagement

to clarify the strategies and management

behavior of medical malls in terms of location

behavior unique to medical malls, paying

and clinical departments.

attention

the

users

users

strategy

benefitthrough

and

from

to

the

locationandclinical

departments of distribution.
2. Study objectives

Regarding the actual number of medical

Despite the accumulation of cluster

malls in Japan, no official government statistics

research, the explanation and discourse arehave been prepared. A survey by the Japanlacking regarding the actors and roles that have

Institute of Management showed that 1,500

Problems with medical malls have also been
pointed out. One is that cooperation among doctors
is difficult because of the large number clinics thatare independent from management, which meansthat transaction costs are incurred. Another isthat malls are located in areas with high land
prices, leading to high rental costs and the risk ofincreasing management burden unless a certain
level of profit can be expected.

1

3

Journal of Japanese Management Vo.5, No.1, November 2020

ISSN 2189-9592

medical clinics were open in 2005, using four

version of shopping malls, then it is desirable toclinics as the unit of calculation，it’s estimate

narrow the area of analysis, as competition forgave 375 locations (JMA Research Institute Inc.,

shopping malls is inherently occurring in a2012). A later survey showed 418 locations (Ito,limited area. However, it is not clear whether

2010). A survey conducted by Yano Research

the clustering of clinics is occurring in a specific

Institute in 2012 calculated two or more clinics

area or is a phenomenon that is occurring acrossinto medical malls and found 925 locations.

Japan. This must be considered because

However, these surveys do not necessarily

medical regions are, in principle, constrained bycapturebasic

medical planning and, with the exception of

information on the national medical mall is

Hokkaido and Nagano Prefectures, are definednecessary to shed light on the strategy andbased on prefectures. Further, since we collected

management behavior of the medical mall.

statistics covering the number of medical malls

Therefore, we attempted to uncover the medicalin the country, we attempted to compare themall by conducting a complete survey.

number of medical malls by prefecture as a pilotthepopulation.

As

such,

study.
(2) Method

Next, using the database of medical

1. Survey method

facilities (WBS) 2 compiled by the Wellness

The definition of group practice, which is

Medical Information Center in November 2019,

commonly adopted in primary care in Western

we confirmed the address, specifically thecountries, was used as a reference, given thelongitude and latitude, of the clinics andnecessity to establish evaluation criteria forpharmacies in the same space. By doing so, weinvestigating medical malls. Group practice hasdeveloped a directory for medical malls.

been defined as follows:

Group practices were defined as being a
medical practice with any specialisation whereat least three physicians work together in ateam (Josi and Pietro, 2019, p. 1).

2. Analytical method
As mentioned earlier, clinics are more
vulnerable to management than hospitals, but
two strategies may give them an edge in this

Therefore, we defined the medical mall ascompetitive environment, as shown in Table 1.

a “location where three or more clinics,

The first is the cluster strategy. The

including dentists, are located in the sameformation of these clusters is believed tospace.” In the United States, as of 2011, groupincrease productivity, access, and motivation,

medical care consists of more than 50 doctors,

reduceaccounting for 35.6% of the total (Welch et al.,innovation (Porter, 1998). In the health care

2013; Wald et al., 2018). In Japan, however,market, the larger the economy and the denser

clinics are operated mainly by one doctor, andthethe minimum number of doctors in a medical

competition.

mall is three.

competitive advantage, they must provide

If medical malls are viewed as the medicaltransaction

population,
For

the

costs,

more

physicians

andpromoteintense
to

have

the
a

patients with opportunities for efficient access.

2 We have been provided with wellness data baseby WELLNESS.Co., Ltd.
4

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Table 1 Competitive relationship between existing clinics and medical malls over location andclinical departments
Existence ofcompetition
No

Yes

Medicalfacility
ClinicLocation

Clinical department

・Proportional to population

・Advocating internal medicine,

medical policy

Medicalmall

density but somewhat evenly pediatrics, surgery, etc.
distributed
・Clinical department is the・Located near hospitals
same between the clinics andmedical malls

Clinic・Proportional to the・Advocating internal medicine,・Adaptation to

population density + Equal
distribution

pediatrics, surgery, etc.

medical policy
・Comprehensive・Adaptation to

medical carestrategy

・Located near hospitals
Medicalmall

Strategy

・Urban areas located in the・Advocating specialized clinical ・Cluster strategy

economic zone
・Located in a good space

departments
・Establishment centered onwith access to traffic andliving spaces

specialists

・Differentiation
strategy

Source: Compiled by author.

Therefore, it is reasonable for clinics to cluster

clusters is specialization. When organizations

strategically in the most convenient places forwithin a cluster exhibit specialization andtransportation and living spaces.

complement one another, they can maintain aIndeed, if medical malls are acting

competitive advantage as a whole (Yamawaki,

strategically, they will be more biased of the2002). Typically, Japanese medical practitioners

location compared with existing clinics because

have a wide range of medical abilities andthey are located where patients prefer.

careers as primary care physicians while

Therefore, the existence of the cluster strategy

practicing on-site in the front line, after working

can be verified by comparing the number ofas hospital specialists. In recent years, to adapt

clinics, stations, and shopping centers, as wellto the policy trend in medical care, doctors haveas population density and other relatedsought to strengthen the family doctor function

indicators in each prefecture with the number ofand improve home medical care in support of

medical malls（MM）. However, because MM aredischarged patients at hospitals. Consequently,

not facilities defined by the Medical Care Act,the range of medical treatment offered is wide,

and the permission to open a MM differs greatly

and clinic management needs to be stable.

depending on the prefecture, the presence of

Therefore, existing clinics tend to be locatedmedical-related companies, such as medicalaround hospitals, although they are evenly

management consultants (MC), pharmacies

distributed in each prefecture (Yoshida and(Ph), and drug stores (DS), which have expertise

Kohno, 2007).

in opening of MM, may influence the

Meanwhile, securing a stable number of

establishment of MM. Therefore, these factors

patients is difficult because the scope of medical

were also considered.

care becomes narrower as specialists provide

The second strategy is differentiation.

highly specialized medical care at clinics.

One of the benefits that can be gained from

However, given that medical malls are located5

Journal of Japanese Management Vo.5, No.1, November 2020

calculated the descriptive statistics after

Table 2 Variables used
Variable

ISSN 2189-9592

compiling data for each prefecture regarding theAbbreviation

Medical malls

MM

ClinicsC

number of hospitals (H), number of clinics (C),

Hospitals

H

including dental clinics, Ph, and DS, population

Pharmacies

Ph

DrugstoresDS

density (PD), ratio of the population aged 65

Percentage of population aged over 65 years

P65

years or older (P65), and intersection of the

Population density

PD

Medical management consultant

MC

number of stations and number of shopping

Station × shopping center

StSC

centers (StSC) 3 . An ABC analysis was also

Percentage of clinical departmentsYp

conducted to clarify the regional distribution of

Growth rate of clinical departments

Yd

Medical mall dummyMD2019 dummy

D19

DM × D19

DMD19

MM, C, and H.
Second, the model with MM as objective
variables and C, PD, StSC, and MC as

Source: Compiled by author.

independent variables was set as 1). Multiple

in urban areas, particularly in areas withregression analysis was attempted by setting

convenient transportation and residence, they

the model in which the objective variable was C

are preferred by patients who need regularand the independent variables were H, P65, PD,

outpatient care (Pines and Mehrotra et al, 2013).

and MC as 2). Note that α is a constant term,

Therefore, it is possible that a specialist could

and u is an error term.

open a practice in a medical mall to attract more

MM = α + β1C + β2PD + β3MC + β4StSC + u 1)

customers and differentiate itself from existing
clinics. To confirm this fact, we needed to clarify

C = α + β1H + β2P65 + β3PD + β4MC + u

the increase in number of clinical departments

2)in the MM. In this study, the tendency that a
specific clinical department is increasing in

The medical facility data used this timenumber in the MM was called the increase

were adjusted for the population of 100,000 toeffect.

account for the large errors among prefectures.

To test these hypotheses, we used the

The correlation between the explanatory

variables that could explain the competitive

variables was confirmed beforehand, andenvironment surrounding number of MM, asvariables with a positive correlation wereshown in Table 2. In addition, the following

selected. Moreover, if an endogenous problem

three analyses were performed. First, we

was suspected, the instrumental variable

The number of hospitals and clinics (including
dentistry) was collected from the Ministry of
Health, Labour and Welfare’s “Medical Facility
Survey (2016)”; the number of pharmacies wascollected from the Ministry of Health, Labour andWelfare’s “Overview of Fiscal 2018 HealthAdministration Report”; the ratio of the population
aged 65 years to the total population and the
population density were collected from “2015Census” of the Statistics Bureau, Ministry ofInternal Affairs and Communications; the numberof stations was collected from “Ranking ofprefectures with many stations in Japan”; thenumber of shopping malls was collected fromJapan Shopping Center Association’s “List of
shopping centers by prefecture and municipality”;
and the list of medical management consultants
was collected from Japan Medical Management
Consultants Association’s “List of approved
registered medical management consultants.”

3

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Journal of Japanese Management Vo.5, No.1, November 2020

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Table 3 Basic information of medical malls and other variables
Prefecture

Hokkaido

Number of
Number of Number of all
medicaloffices inclinics inmalls medical mall
medical
malls
118
579
489

Number ofpharmacies
in medical
malls
90

Number of Number of all
hospitals
clinics

Number ofpharmacies

562

6348

2323

Aomori

6

28

21

7

96

1432

615

Iwate

2

7

6

1

93

1490

590

Miyagi

33

160

131

29

139

2731

1159

Akita

5

24

20

4

69

1254

531

Yamagata

0

0

0

0

68

1420

587

Fukushima

2

7

6

1

128

2233

874

Ibaraki

14

63

52

11

178

3115

1295

Tochigi

6

22

20

2

107

2413

892

Gunma

3

13

11

2

129

2538

903

Saitama

114

518

434

84

342

7771

2888

Chiba

134

609

494

115

286

7034

2448

Tokyo

667

2913

2450

463

651

23842

6702

Kanagawa

392

1807

1508

299

341

11700

3888

Niigata

10

39

32

7

131

2856

1142

Toyama

1

4

3

1

106

1211

456

Ishikawa

4

16

12

4

95

1353

528

Fukui

2

6

6

0

68

873

293

Yamanashi

1

4

3

1

60

1139

451

Nagano

3

11

9

2

130

2592

979

Gifu

9

31

27

4

102

2549

1032

Shizuoka

15

71

57

14

181

4494

1857

Aichi

72

345

293

52

323

9005

3368

Mie

7

27

22

5

100

2373

820

Shiga

10

48

37

11

57

1620

611

Kyoto

27

119

100

19

170

3784

1085

Osaka

339

1566

1325

241

523

13940

4170

Hyogo

219

1058

876

182

350

8044

2640

Nara

38

181

148

33

77

1897

558

Wakayama

8

29

26

3

83

1603

488

Tottori

0

0

0

0

44

760

276

Shimane

2

7

6

1

51

998

333

Okayama

11

50

41

9

164

2661

831

Hiroshima

77

378

314

64

244

4138

1615

Yamaguchi

3

11

10

1

147

1962

801

Tokushima

1

3

3

0

112

1177

390

Kagawa

8

40

32

8

90

1308

539

Ehime

0

0

0

0

141

1937

602

Kochi

4

26

22

4

130

935

391

Fukuoka

88

403

333

70

461

7749

2914

Saga

1

4

4

0

107

1112

519

Nagasaki

19

75

66

9

151

2128

738

Kumamoto

1

3

3

0

212

2305

856

Oita

4

16

13

3

157

1505

573

Miyazaki

1

4

3

1

140

1399

602

Kagoshima

4

15

12

3

252

2230

890

Okinawa

16

68

59

9

94

1511

570

Nationwide

2501

11408

9539

1869

8442

17046959613

Note: Display the survey results of 47 prefectures. The numbers are real data.

7

Journal of Japanese Management Vo.5, No.1, November 2020

ISSN 2189-9592

1

C
0.9

B

0.8
0.7

A

0.6
0.5
0.4
0.3
0.2

病院
Hospital
総診療所
Clinic0.1

医療モール
MedicalMall0
1 2 3 4 5 6 7 8 9 10 1112 13 141516 1718 1920 2122 23 242526 272829 30 31 323334 3536 3738 39 4041 42 4344 4546 47

Figure 2 Pareto chart of hospitals, all clinics,

Figure 1 Pareto chart of medical malls

and medical malls(ABC analysis)

Note 1: The cumulative frequency distribution of

Note: A = Tokyo, Kanagawa, Osaka, Hyogo, Chiba,

hospitals and all clinics has been added to the ABC

Hokkaido, and Saitama. B = A + Fukuoka, Aichi, andanalysis of the Medical Mall Criteria.

Hiroshima. C = Prefectures other than A and B.

Note 2: All clinics = general clinics + dental clinics.

method (2SLS) was adopted in addition to theused as the objective variable and DM, D19, andleast squares method.

DMD19 as the independent variables was set,

Third, we used a difference-in-differences

shown in Equation 3). We ran multiple

design (DID) using regression analysis to verify

regression analysis using an equation 4) inthe increasing effect of clinical departments inwhich the objective variable was the rate of

medical malls. By subtracting the growth ratechange (Yd) in the clinical department and theof clinical departments in all clinics from that ofindependent variable was DM.

clinical departments in medical malls from 2008
to 2019, we clarified the effect of the increasing

Yp = α + β1DM + β2D19 + β3DMD19 + u

3)

Yd = α + β1DM + u

4)number of clinical departments in medicalmalls.
In implementing DID, the following two
conditions had to be satisfied. First, the trend(3) Results

for the number of entries in the clinic and

1. Basic Information and Regional Distribution

medical mall groups had to be the same. Second,of Medical Malls

no other changes should be affecting theFirst, the results of the survey on thenumber of entries in the clinic and medical mallnumber of medical malls are shown in Table 3.

groups. Both trends were the same, and no

We identified 2,501 medical malls in Japan, andspecific events had affected the increase or

it was found that there are 11,408 businessdecrease in the number of clinics in the country

establishments. Of these establishments, 9,539

as a whole. Thus, we deemed these conditions towere clinics and 1,869 were pharmacies. For an

have been cleared.

overview of the prefectural distribution, theBased on the above, the model in which

descriptive statistics are shown in Table 4. The

the ratio of clinical departments (Yp) could beaverage number of medical malls in each8

Journal of Japanese Management Vo.5, No.1, November 2020

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Table 4 Descriptive statistics on the number of medical institutions
Number of
medical
malls
n

47

Number of Number of Number ofoffices in all clinics in pharmacies
medicalmedical in medical
mall
malls
malls
47
47
47

Number of
hospitals

Number of Number of
all clinics pharmacies

47

47

47

Average

53.21

242.72202.9639.77

179.623627.00

1268.36

Standard deviation

123.11552.83463.9888.96

139.914209.76

1267.12

Min

0.00

0.00

0.00

0.00

44.00

760.00276.00Max

667.002913.00

2450.00

463.00651.0023842.00

6702.00

Median

7.00

28.00

22.00

4.00

130.002230.00

820.00Coefficient variation

2.31

2.28

2.29

2.24

0.78

1.16

1.00

Note: Display the survey results of 47 prefectures.

prefecture was 53.21, the standard deviation

2. Factors associated with the location of

was 123.11, and the minimum value was 0. The

medical malls

maximum value was 667, in Tokyo. The average

The data used this time had large errors

number of establishments in a medical mall was

between prefectures. Thus, we corrected the242.72, with a standard deviation of 552.83, adata in advance of the multiple regression

maximum of 2,913, and a minimum of 0.

analysis. Basic information adjusted to theSecond, the results of the ABC analysis of

population of 100,000 was prepared andthe number of medical malls by prefecture arepresented in the Table 5. The descriptive

shown in Figure 1. Of the medical malls

statistics are shown in Table 6 and thecorresponding to A, 80% were concentrated incorrelation analysis is shown in Table 7. In

Tokyo, Kanagawa, Osaka, Hyogo, Chiba,

Table 7, three variables, namely, PD, MC, andHokkaido,

To

StSC, were positively correlated with MM,

examine the degree of bias in the location ofwhereas five variables, namely, H, Ph, P65, PD,

medical malls compared with hospitals andand MC, were positively correlated with C.

clinics, we investigated the location distribution

However, PD, MC, and StSC were positivelyof three medical facilities, with the resultscorrelated with one another. P65 was negatively

shown in Figure 2. The Pareto chart in Figure 2

correlated with PD, MC, and StSC.

and

SaitamaPrefectures.

shows that the closer the distribution is to the

The results of the trial of 2SLS in addition

45-degree line, the smaller the distribution,

to OLS are shown in Table 8. Model 1) used thewhereas the farther the distribution is from theleast

45-degree line to the left, the larger the

explanatory variables associated with MM, but

distribution. The coefficients of variation, as

Constant term, C, PD, MC, and StSC wereshown in Table 4, namely, 2.31 for medical malls,

statistically significant with a degree of freedom

0.78 for hospitals, and 1.16 for all clinics,

adjusted coefficient of determination of 0.650.

suggested that the location variation of medical

However,malls was three and two times greater than thatoverestimated, model 1)’ was estimated usingof hospitals and clinics, respectively.

2SLS. In the results, only PD was statisticallysquaresasmethodthistoestimate

coefficient

may

the

be

significant, and the degree of freedom adjusted
9

Journal of Japanese Management Vo.5, No.1, November 2020

ISSN 2189-9592

Table 5 Number of medical institutions per 100,000 population by prefecture
Prefecture

MM

H

C

Ph

DS

P65

PD

MC

StSC

Hokkaido

2.22

10.59

119.60

43.90

12.79

29.1

69.00

66

86296

Aomori0.46

7.36

109.84

48.70

11.66

30.1

136.00

7

4611

Iwate

0.16

7.39

118.46

47.50

14.23

30.4

84.00

9

7486

Miyagi

1.44

6.06

119.15

50.00

11.95

25.7

321.00

26

11993

Akita

0.49

6.82

124.00

54.10

11.47

33.8

88.00

5

4410

Fukushima

0.10

6.71

117.10

46.90

9.86

28.7

139.00188550

Ibaraki

0.48

6.16

107.82

45.00

12.25

26.8

478.0079248

Tochigi

0.31

5.50

123.94

45.80

12.07

25.9

308.00

21

3658

Gunma

0.15

6.66

131.02

46.30

14.66

27.6

310.0023

4692

Saitama

1.58

4.75

107.95

39.40

13.85

24.8

1913.00

32

31787

Chiba

2.18

4.65

114.27

39.10

12.48

25.9

1207.00

25

51597

Tokyo

5.09

4.96

181.78

48.50

12.99

22.7

6169.00

452

235893Kanagawa

4.37

3.80

130.39

42.40

11.57

23.9

3778.00

54

76383

Niigata

0.44

5.78

126.05

50.80

13.42

29.9

183.0025

12390

Toyama

0.09

10.07

115.02

43.40

14.44

30.5

251.0018

8448

Ishikawa

0.35

8.36

119.02

46.20

14.34

27.9

276.00

29

3542

Fukui

0.26

8.75

112.31

37.90

15.82

28.6

188.008

3120

Yamanashi

0.12

7.28

138.27

55.20

16.63

28.4

187.006

1606

Nagano0.14

6.25

124.55

47.50

10.72

30.1

155.00

41

13250

Gifu

0.45

5.09

127.12

51.70

19.60

28.1

191.0015

12342

Shizuoka

0.41

4.94

122.78

50.80

12.76

27.8

476.00

32

14820

Aichi

0.98

4.41

123.08

44.70

12.57

23.8

1447.00

73

118286

Mie

0.39

5.60

132.82

45.80

12.82

27.9

315.00

11

13630

Shiga

0.72

4.09

116.29

43.30

12.99

24.2

352.00

7

6250

Kyoto

1.08

6.78

150.99

41.90

11.41

27.5

566.00

28

15376

Osaka

3.93

6.06

161.51

47.30

10.60

26.1

4640.00

146

121068

Hyogo

3.99

6.38

146.64

48.10

10.68

27.1

659.00

46

70485

Nara

2.79

5.66

139.49

41.70

8.90

28.7

370.00124192

Wakayama

0.83

8.57

165.47

52.20

8.26

30.9

204.0002500

Shimane

0.29

7.46

146.01

49.00

10.24

32.5

104.005

2124

Okayama

0.58

8.65

140.42

43.80

9.29

28.7

270.0030

8183

Hiroshima

2.75

8.71

147.76

57.30

10.39

27.5

335.0084

21238

Yamaguchi

0.22

10.65

142.09

58.50

13.18

32.1

230.00197020

Tokushima

0.13

14.90

156.55

53.00

9.98

31

182.0016

1155

Kagawa0.81

9.17

133.24

56.00

12.12

29.9

520.00

22

2346

Kochi

0.55

18.03

129.68

55.40

11.37

32.8

103.007

2768

Fukuoka

1.74

9.11

153.15

57.10

13.36

25.9

1023.00

123

44982

Saga

0.12

12.93

134.36

63.40

10.51

27.7

341.0043

1296

Nagasaki

1.39

11.03

155.43

55.00

8.55

29.6

333.0033

3944

Kumamoto

0.06

11.94

129.80

48.70

9.80

28.8

241.00

42

8150

Oita

0.35

13.57

130.05

50.10

10.37

30.4

184.0024

2523

Miyazaki

0.09

12.65

126.46

55.70

10.94

29.5

143.0013

1368

Kagoshima

0.24

15.30

135.40

55.10

11.66

29.4

179.0038

2772

Okinawa

1.10

6.46

103.77

39.40

4.19

19.6

628.0018600

Note: It was excluded because there are no medical malls in Yamagata, Tottori, and Ehime.

10

Journal of Japanese Management Vo.5, No.1, November 2020

ISSN 2189-9592

Table 6 Descriptive statistics on the number of medical institutions per 100,000 population by
prefecturen
AverageStandard deviationMin
Max
MedianCoefficient variation

MM
44
1.06
1.27
0.06
5.09
0.47
1.21

H
44
8.09
3.30
3.80
18.03
7.05
0.41

C
44
131.61
16.99
103.77
181.78129.74
0.13

Ph
44
48.72
5.90
37.90
63.40
48.30
0.12

DS
44
11.90
2.49
4.19
19.60
11.81
0.21

P65
PD
MC
StSC
44
44
44
44
28.14 688.09 39.9773 24281.32
2.80 1228.34 70.0885 44382.50
19.60
69.00
0.00
600.0033.80 6169.00 452.00 235893.00
28.50 292.00 23.50 7818.00
0.10
1.79
1.75
1.83

Note: It was excluded because there are no medical malls in Yamagata, Tottori, and Ehime.

Table 7 Correlation matrix
MM
H
C
Ph
1
-0.4359**1
0.19620.27501-0.2528 0.5484** 0.4874**1-0.1250 -0.2765 -0.3467* -0.1117-0.5067** 0.6501**
0.1474 0.4452**
0.6141** -0.5301**
0.1459 -0.3116*
0.3897**-0.0783
0.2777 0.0056
0.5498** -0.5697** -0.0011 -0.3317*

MM
H
C
Ph
DS
P65
PD
MC
StSC

DS

P65

PD

MC

StSC

1
-0.17371
0.0241 -0.8045**
1-0.0606 -0.4764** 0.5169**10.2653 -0.4908** 0.4698** 0.6058**1

Note: Tests for rank correlation coefficients, * P <0.05, ** P <0.01.

coefficient of determination was 0.408. In

Therefore, although medical malls andaddition, in 1)’’, Constant term and PD wereexisting clinics are commonly affected bysignificant, and the freedom adjusted coefficient

population density, they differ in that onlyof determination was 0.599, suggesting that 1)’’clinics are affected by the location of hospitals.

would be suitable and affected by population
density.

3. Increasing effect of clinical departments inModel 2) then used the least squares

medical malls

method to estimate the explanatory variables

Table 9 shows the results of DID in

associated with C; Constant term, P65, and MC

whichwere statistically significant with a degree ofattempted to verify the effect of increasing thefreedom adjusted coefficient of determination of

number of clinical departments in a medical

0.3990.

model 2)’, whichmall. In model 3), DM was statistically

employed 2SLS to address endogeneity, threesignificant but the parameter was negative.

variables were statistically significant, namely,

This was because the proportion of clinicalConstant term, H, and PD, and the degree of

departments was low overall owing itself to thefreedom adjusted coefficient of determination

overwhelmingly smaller number of medical

was 0.2056.

malls compared with the number of existing

In calculating11

multipleregression

analysiswasJournal of Japanese Management Vo.5, No.1, November 2020

ISSN 2189-9592

Table 8 Results of multiple regression analysis
MM

Objective variable

C

1)

1)'

1)"

2)

2)'

OLS

2SLS

2SLS

OLS

2SLS

0.655605

5.470**（0.749156）(1.567)

H
C
PD

0.01454†-0.0345(0.008248)(0.02912)

0.0004979*

0.001153**

0.0009006**

0.00314497

0.01202**(0.0001934)(0.0002624)(0.0001157)（0.00318154）(0.003104)

P65

2.31193*(0.952345)

MC-0.006847†

0.130861*(0.003888)(0.0516788)

StSC

1.748e-05*(6.499e-06)

Const
Adj. R2lnL
n-1.35104.80600.4359**53.8455**

79.08**(1.051)(3.6920)(0.1464)（25.4512）（14.23）

0.650

0.408

0.599

0.399075

0.2056-47.370-671.200

44

Hausman Test

−173.199

44

448.207543.02738

20.7165(0.0165103)(0.08187)（3.17293e-005）

Sargan Test
IV List44

44

2.59189

0.00270829( 0.107412)（0.998647）

Const, StSC, MC Const, StSC, MC

Const, StSC,
MC, P65, Ph

Note: **p <0.01%, *p <0.05%, †P <0.10%. Numbers in parentheses are standard errors.

clinics.

fields: obstetrics and gynecology (-4.76%),

The proportion of clinical departments

pediatrics

was also generally low because the number of(-1.51%),

otorhinology(-1.37%),diabetes medicine (-1.57%), and breast surgery

medical malls was overwhelmingly smaller

Table 9 Results of regression analysis

than that of existing clinics. Further analysis of3)

the growth rate (difference) of DM showedstatistical significance. The growth rate ofDM

clinical departments in medical malls increased
an average of 3.41% over the past 11 years, even

D19

4)

OLS

OLS

−0.0368820*

0.0341241**(0.0192202)(0.00688930)

0.0018300(0.0192202)

after excluding the effect of the growth rate of

DMD19

clinical departments in all clinics. As shown in

0.0306549(0.0271815)

Table 10, there was an increase in 28 out of 33

Const

fields in the number of clinical departments of
Adj. R2

medical malls, with large increases in thelnL

following: 9.01% in gastroenterology, 8.92% innallergology, 8.93% in pediatric dentistry, 8.28%

0.0673062**

0.0008(0.0135907)(0.00487147)

0.018

0.237

151.346

143.389

132

66

Note: **p <0.01%, *p <0.05%. Numbers shown inin rehabilitation, and 8.43% in orthodontics.

parentheses are standard errors.

Meanwhile, decreases were recorded in five12

Journal of Japanese Management Vo.5, No.1, November 2020

ISSN 2189-9592

Table 10 Increasing effect of clinical departments in medical malls (difference-in-differences
design)Clinical department
Gastroenterology

Clinics (%)

Medical malls (%)

20082019 Difference

2008

2019 Difference

11.45

10.33

-1.11

2.40

10.30

Difference indifferences

7.90

9.01

Allergology

3.78

3.95

0.18

0.00

9.10

9.10

8.92

Pediatric dentistry

23.18

25.15

1.97

0.00

10.90

10.90

8.93

Physical medicine and rehabilitation

7.53

6.66

-0.88

0.00

7.40

7.40

8.28

Orthodontic dentistry

12.72

13.89

1.17

0.00

9.60

9.60

8.43

Internal medicine

37.77

36.75

-1.02

20.00

26.60

6.60

7.62

Dermatology

7.44

6.55

-0.89

7.00

13.10

6.10

6.99

General surgery

9.16

7.49

-1.67

1.00

5.80

4.80

6.47

Psychosomatic medicine

2.26

2.52

0.26

0.00

6.70

6.70

6.44

Oral and maxillofacial surgery

11.85

15.15

3.30

0.00

9.10

9.10

5.80

Cardiology

7.77

7.44

-0.32

1.00

6.40

5.40

5.72

Psychiatry

3.37

3.72

0.35

2.00

6.80

4.80

4.45

Respiratory medicine

4.66

4.45

-0.21

0.00

3.90

3.90

4.11

Dentistry

39.81

39.02

-0.78

16.00

19.40

3.40

4.18

Rheumatology

2.42

2.42

-0.01

0.00

3.90

3.90

3.91

Gynecology

1.28

0.92

-0.36

0.00

3.10

3.10

3.46

Ophthalmology

5.02

4.30

-0.72

8.00

10.90

2.90

3.62

Colorectal surgery

2.12

1.76

-0.37

0.00

1.90

1.90

2.27

Radiology

2.98

1.93

-1.05

0.40

1.50

1.10

2.15

Aesthetic plastic surgery

0.59

0.59

0.00

0.40

2.60

2.20

2.20

Orthopedic surgery

7.74

7.11

-0.63

7.00

8.40

1.40

2.03

Neurology

2.03

1.65

-0.38

0.40

1.90

1.50

1.88

Plastic and reconstructive surgery

1.11

1.01

-0.10

2.00

3.70

1.70

1.80

Neurosurgery

0.94

1.01

0.07

0.00

1.30

1.30

1.23

Obstetrics

0.24

0.16

-0.08

0.00

0.90

0.90

0.98

Urology

2.32

2.03

-0.29

3.00

3.60

0.60

0.89

Anesthesiology

1.36

1.12

-0.24

1.00

1.40

0.40

0.64

Pediatric surgery

0.20

0.21

0.01

0.00

0.10

0.10

0.09

Breast surgery

0.22

0.48

0.26

0.40

0.00

-0.40

-0.66

Endocrinology and metabolism

1.14

2.31

1.17

0.40

0.00

-0.40

-1.57

Otorhinolaryngology

3.51

3.08

-0.43

9.00

7.20

-1.80

-1.37

Pediatrics

13.47

11.28

-2.19

12.00

8.30

-3.70

-1.51

Obstetrics and gynecology

2.12

1.68

-0.44

7.00

1.80

-5.20

-4.76

Overall average

7.08

6.91

-0.16

3.04

6.29

3.25

3.41

Note: We targeted 33 clinical departments that can capture data from clinical departments in medical malls.

(-0.66%).

leading economic zones. As of November 2019,Japan had 2,501 medical malls, with 11,408(4) Discussion

business establishments operating in them

We focused on inter-clinic competition and(Table 3). Of these establishments, 9,539 wereanalyzed the location and distribution of clinicalclinics, including dentists, and 1,869 weredepartments in medical malls and existing

pharmacies, accounting for 5.6% of all clinics

clinics.

and 3.1% of all pharmacies in the country.

First, through a thorough survey of

In addition, we conducted an ABC

medical malls, we uncovered the fact thatanalysis on the number of medical malls byclusters of clinics were formed around Japan’s

prefecture to clarify the location distribution of13

Journal of Japanese Management Vo.5, No.1, November 2020

ISSN 2189-9592

these malls. The results showed that 80% were

inevitably tend to be located around hospitals,

located in prefectures with large economies,

to promote smooth cooperation with hospitals.

such as Tokyo, Kanagawa, Osaka, Hyogo, Chiba,

However, medical malls are also likely to

Hokkaido, and Saitama. The distribution ofopen strategically in locations where hospitals

locations was clearly biased compared with thehave not entered the market to avoid

existing clinics (Figs. 1 and 2). As discussedcompetition from hospitals. These locations areabove, clusters of clinics can be interpreted as

those near stations and shopping malls that

occurring mainly in urban areas rather thanhave high levels of human traffic and areequally across the country. Given that medical

convenient for living and transportation.

malls

government

Another reason for clinics becoming clusters is

subsidies, medical malls may have economic

that clustering is a strategic way to reverse therationale and may offer incentives to attract

problem of transaction costs that arise in clinic

physicians within these areas.

management (Macher and Richman, 2008). In

areopening

without

Second, our analysis of the factors

Japan, under the government’s leadership, theinfluencing the number of medical malls

high hurdles of setting up hospitals and hospitalsuggests that the magnitude of the population

beds to control the country’s overall health caredensity is related to the number of malls. To

costs, fluidity of hiring medical staff, high cost of

examine whether the location of a medical mallmaintaining physician personnel and medical

was accidental or a consequence of strategic

equipment, and other factors, make thebehavior, we ran a multiple regression analysis

transaction

on factors related to the number of medicalorganizations very high. Meanwhile, thesemalls. The results suggested that both medical

regulations can work to the advantage in clinics.

malls and existing clinics were affected by

As a rule, management resources traded in

population density, whereas existing clinics

health care are limited to goods and services

were also affected by the location of hospitals

that have undergone rigorous review and(Table 8). Thus, although the impact ofapproval by the state. Thus, the cost of

population density on both medical malls andprocuring them through the market is low.

existing clinics is only a natural consequence,

Clinics can be expected to strengthen their

medical malls are not affected by the location ofmanagement while controlling transaction costs

hospitals.

by purchasing the necessary resources from the

Recently, to cope with the aging of the

costs

of

expandinginternal

outside (market). This situation can explain the

population, the Japanese government has been

incentives

shifting its strategy to the provision ofgeographically and is reflected in the results ofcomprehensive medical care by many clinics. It

these analyses.

has

been

givingincentives

for

for

clinicstoconsolidate

medicalThird, our analysis of the growing number

treatment fees with the aim of strengtheningof clinical departments in the medical malls

the functions of primary care physicians andrevealed that there is an increase in the number

enhancing home medical care as receivers ofof specialty departments that are different frompatients discharged from hospitals (Kaneko andexisting clinics. To verify the effect of increasing

Matsushita, 2017). Therefore, existing clinics

the number of clinical departments in medical
14

Journal of Japanese Management Vo.5, No.1, November 2020

malls,

wecomparedandanalyzedtherelationships

ISSN 2189-9592

with

other

specialists

anddistribution of clinical departments in medical

pharmacies. This is expected to stabilize themalls and existing clinics. In the past 11 years,

ability to attract customers and revenue

the number of clinical departments in medical(Epstein, 2016). By maximizing the strengths ofmalls increased by an average of 3.41% (Table

these medical malls, these medical practitioners

9). For example, among 33 departments, themay be developing a differentiation strategy

number increased in 28 departments, including

against existing clinics.

gastroenterology, allergology, pediatric dentistry,rehabilitation, and orthodontics. In 2008,(5) Conclusion

medical malls consisted mainly of the major

We conducted a thorough survey ofclinical departments existing in existing clinics,

medical malls in Japan to explore the factors

such as internal medicine, general dentistry,that contribute to the clustering of clinics. The

and pediatrics. In 2019, however, the clinicalresults of the analysis indicated the following.

expertise was increasingly distributed among

In the Tokyo metropolitan area, Osaka, andmultiple clinical departments in addition to

Hokkaido, where competition among clinics isthese major ones (Table 10).

fierce, medical malls have been developed under

Based on the above results, specialists ina cluster strategy in order for specialists inthese departments may establish themselves inclinics to have a competitive advantage; 80% of

medical malls to differentiate themselves fromall medical malls are concentrated in theseother clinic doctors. Presently, the number ofareas. Considering that the medical mall isclinics, including dental clinics, has reachedlocated

170,000, indicating the market is saturated.

transportation and overall access in the city, it

The government’s fiscal restraint on health carecan be expected to improve the access to medical

fundingtocare on the patient side, which is particularly

reimbursement rates have made the operation

advantageous for specialists as well. Therefore,of clinics even more difficult.

if a medical specialist opens a clinic in a medical

andnegativerevisions

If general practitioners have a competitive

in

a

place

with

convenientmall, then they may be able to differentiate

advantage in these market conditions, they

their practice from existing clinics.

should have an incentive to choose a location

Based on the above, the medical mall canwith high population density and efficient

be construed to operate strategically in terms ofcustomer acquisition potential, or to choose alocation and clinical departments, confirming

specialty with fewer competitors. However, thethehurdle for a specialist who has worked as a

However, the findings obtained from this

hospital doctor to open a new practice in ananalysis only revealed parts of the strategy andurban area is extremely high. The initial cost of

management behavior of medical malls fromaccessible locations is too great owing to highthe difference in distribution of location andland prices and rents. However, practitioners

clinical departments. In addition, we have notcan open a medical mall with low initial costs

clarified that competition between clinics works

and provide high-quality, highly specialized

effectively, and it does not guarantee low cost,

medical care by building complementary

quality medical care, or soundness of clinic
15

presenceoffunctioning

competition.

Journal of Japanese Management Vo.5, No.1, November 2020

ISSN 2189-9592

management. However, we would emphasize

control ， The Journal for Hospitalthat the value of the present study as a pilot

Governing Boards，38(2) ，pp.21-23.

study demonstrating the need for empirical

Ito, A. (2010). Wagakuni ni okeru Iryoumo-ru no

studies in each local area in the future is not

Suishin Seibi Zyoukyo to Manegimento

compromised by the fact that it illustrates well

Kadai(Current

the national cases where clusters of clinics arecomplexoccurring. It is necessary to analyze in detail the

managerial problems)， Jiyugaoka Sanno

management behavior of medical malls in aCollege bulletin ， 43 ， pp.49-68. (inlimited area in the future.

Japanese)

For a long time, research has noted thatinsituation
Japan:

itsofmedicalgrowthandIto, A. (2016 a). Medical Malls: Assessing

the formation of industrial clusters contributes

Willingness

significantly

Anticipated，Health Economics & Outcome

to

the

enhancementofto Consult

and Services

Research: Open Access,2(2), pp.1-9.

competitiveness and growth of firms andeconomies, and a similar phenomenon has been

Ito, A. (2016 b). Medical mall founders’discovered in the clinic health care market. In

satisfaction and integrated management

particular, the formation of clusters of clinics

requirement ， International Journal of

could solve efficiency and productivity problems

Health Planning and Management，32(4),by

pp.449-466.

strengthening

management.

Furthersurveys must be conducted to clarify these
problems,

andfutureresearchIto, A. (2020). Identifying Motivational Factors to
Visit a Medical Mall by Conjoint Analysis，

shouldInternational Journal of Japan Academic
Society of Hospitality Management,6(1)，undertake empirical analyses.

pp.1-10．
Jankowiak, H. Anna. (2011). Cluster models inJapan on the example of Toyota cluster,
Research Papers of Wroclaw University of
Economics,191, pp.173-181.
Jennifer, B. (2011) ．What Opportunity Does

Acknowledgements
The author would like to thank anonymousreferees for their useful comments. This work was
supported by the Japan Society for the Promotionof Science KAKENHI grant number 18K12831. It
was also subsidized by the 2019 discretionary

the Medical Mall Healthcare Model

research grant from the president of Kitami

Present? ，https://.daviswince.com/2011

Institute of Technology.

medical-malls/(accessed on 8 May2020)．
JMA Research Institute Inc., Medical Malls，MDB
Market Research Report, https://www.jmar-bi.
com/report/00060I.html(accessed on 8 May2020)．(in Japanese)

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Redefining Health Care Creating ValueBased
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Results,
17

Journal of Japanese Management Vo.5, No.1, November 2020

ISSN 2189-9592

Effect of Empowering Leadership on Creativity and Ability of
Employees: Comparison of Regular and Non-Regular Employees
Kou Kitano

Graduate School of Business Administration, Daito Bunka University
Japan Academy of Business Administration
E-mail: kasya1028@yahoo.co.jp
Mikiyoshi Aoki

Faculty of Business, Daito Bunka University
Japan Academy of Business Administration
E-mail: aoki@ic.daito.ac.jp
Masayoshi Toma

Faculty of Economics and Business, Wako University
Japan Academy of Business Administration
E-mail: m-toma@wako.ac.jp
Abstract
The aim of this paper is to clarify the effect of empowering leadership on the exertion of
employees’ creativity and ability from comparison of regular and non-regular employees. Basedon the results of the literature review, we set the hypothesis that empowering leadershipinfluences creativity and ability through mediation of psychological empowerment. In order toverify the hypothesis, multiple-group structural equation modeling (Structural Equation
Modeling: SEM) was performed using questionnaire survey data obtained from 423 employees
working in the wholesale and retail industries. From the analysis results, the mediating effectof psychological empowerment was confirmed only for the ability of regular employees. The
mediation effect of psychological empowerment on the exertion of employees’ creativity andability of non-regular employees was not confirmed. From the results of this study, it has beenclarified that the influence of empowering leadership on employee's creativity and ability
depends on the employment type of the employee.
Keywords
Regularemployees,

Non-regular

employees,

Empowering

leadership,

Psychologicalempowerment, Multiple-group SEM(1) Introduction

following research questions: "Is empowering

The aim of this paper is to clarify theleadership by managers effective for exertion18

Journal of Japanese Management Vo.5, No.1, November 2020of employees’ creativity and ability when(2)

comparingResearch

regularandnon-regular

employees?"1
In

OutlineISSN 2189-9592

ofEmpowering

Leadership

1. Definition of empowering leadership

recentenvironment

years,

hasthechangedbusiness

Originally, leadership research focusedsignificantly.

on the principles of leadership represented by

Therefore, not only the top management of

trait

companies but also general employees arecontingency theories. In recent years, therequired to exert their creativity and ability.

focus has shifted to building leadership styles

Toma and Okamoto (2005, 2006) and Toma

for application in the field. Among them,(2006,

empowering leadership is the representative2013)

revealsthatmanagerial

leadership behavior plays an important role

theories,behavioral

theories,

andleadership style2.

in these.

Empowering leadership is a leadership

Specifically, many studies have shownstyle that promotes the autonomous behavior

that empowering leadership is effective. And,of employees. It is defined as "this leadershipit has been clarified that the execution ofstyle empowers employees psychologicallyempowering leadership indirectly influencesand encourages their autonomous behavior. "creativity and abilities employees.

There are various views on the concept ofTheeffectsof

thisexecutionofempowering leadership. A common feature of

empowering leadership will be examined inthese studies is the view that "leadershipmore detail. Therefore, it is necessary toaims

verify the effect based on the difference inempowerment of employees3."

industries, occupations and employment type.

toenhancethepsychologicalAs an example, Aoki (2013) and Sharma

However, there are not so many such studies.

and Kirkman (2015) pointed

In other words, there are few studies thatempowering leadership is the leadership that

demonstrate how the effects of the execution

makes employees perceive themselves to beof empowering leadership differ due to these

psychologicallydifferences.

wasleadership means more than just involving

reexamined by focusing on the effects of theemployees in delegation and decision making.

execution of empowering leadership and theRather, this leadership involves a wide range

employmentof motivations, such as the employees

Therefore,

type

this

(especiallystudy

comparing

regular and non-regular employees).

empowered.

out

that

Empowering

themselves setting goals and changing their
willingness and behavior.
It was Thomas (2000) who pointed out

Currently, there are more than just two types of
employment in Japan: full-time and part-time. For
example, regular employees, rehired regular employees,
temporary employees and part-time employees, etc.
Because of this situation, the terms regular employees
and non-regular employees are used in this paper.
2 In addition to empowering leadership, there areseveral leadership styles. For example, typical styles
are transformational leadership and servant
leadership.
1

3

The psychologically empowered state is that theemployee recognizes himself/ herself as a powerfulperson. In order to recognize in this way, it is said thatthe following specific psychological states need to beenhanced. That is, (1) sense of meaning, (2) sense of
self-determination, (3) competence, and (4) sense of
influence. These four psychological states arecollectively called “psychological empowerment”.

19

Journal of Japanese Management Vo.5, No.1, November 2020

ISSN 2189-9592

that empowering leadership is a leadership

Hon and Chan (2013) studied the creativity ofthat encourages autonomous behavior of

the team as a result. And finally, Dewenttinck

employees. In recent years, companies need to

and Ameijde (2007) studied variables relatedacquiresustainable

to employee attitudes. This study specificallycompetitive advantage. Therefore, it is more

addressed job satisfaction and emotionaland more necessary for employees to think on

commitment as outcome variables.

andmaintainatheir own, make their own decisions, and act.

Interestingly, all of these studies had

And these needs for employees have recently

similar validation results. It was that thebeen

execution

demanded

due

to

the

lack

of

of

empowering

leadership

independence of young employees. Based onindirectly influenced the outcome through thethe above points, this research defines

psychological empowerment of employees.

empowering leadership as follows. That is, itThis means that psychological empowerment

is "empowering leadership is a leadershipfunctions as a mediation.

that psychologically empowers employees andIn order to produce results such as

promotes their autonomous behavior."

creativity, it is necessary to enhance thepsychological empowerment of employees.

2. Effects of the execution of empowering

And empowering leadership plays a role in

leadershipmaking the employees perceive that they are

In the late 2000s, not only theoretical

psychologically empowered. In other words,

research but also empirical research has been

empowering leadership does not directly

focused and conducted in relation to theaffect achievements such as the exertion ofeffects of empowering leadership exercise. As

employees’

creativity

mentioned at the beginning, empoweringsatisfaction

andleadership exertion is said to indirectly

However, this means that by psychologically

influence the exertion of creativity and ability

empowering the employee, it indirectly

by psychologically empowering employees.

influences.

Some

researchthathighlights

empowering

leadershipexerciseemotional

ability,job

commitment.

theexertion of creativity and ability as an effectofand

3. Analysis framework of this researchareBased on the results of the previous

surveyed. As a result, two studies are foundstudies that have already been described, thisout. That is, 1. Research that targets

study constructed an analysis framework as

individuals, 2. Research that targets teams. It

shown in Figure 1. Here are the following

has been pointed out that the effect of thisquestions.

exercise is not limited to innovation-related

empowering leadership make employees

variables. And, because of exercising these,exert the creativity through the psychologicalstudies have also pointed out variables

empowerment?

related to employee attitudes.

increasing their performance? An empirical

How

does

And

the

is

it

executioneffectiveofin

Here, specifically, some research will beanalysis of these two questions will be madepresented. Zhang and Bartol (2010) studied

clear for regular and non-regular employees

the creativity of each employee as a result.

within the same company.
20

Journal of Japanese Management Vo.5, No.1, November 2020

ISSN 2189-9592

Figure 1 Analysis framework of this research
The model in Figure 1 shows that: The

sense that the person has the option to

manager executes of empowering leadershipinitiate and control his/her actions.

for the employee. Then, the psychological(c) Competenceempowerment of the employee increases. As a

Competence is the ability of an organism

result, the exertion of employees’ creativity

to interact effectively with the environment

and ability are promoted. An overview of eachby an individual. In other words, competence

variable in Figure 1 is shown below.

is the degree of confidence that one's actions

3.1 Psychological empowerment

can influence the environment. It is a concept

Psychological empowerment is a concept

similar to self-efficacy. Some researchersthat represents a specific psychological state

consider these two to be the same concept.

of an individual. This concept consists of four

The difference between this competence anddimensions:self-

self-efficacy is that the belief in one's own

determination, (c) competence, (d) impact.

behavior is defined in its interaction with the

The contents of these four dimensions areenvironment.

explained below.

(d) Impact(a)meaning,(b)(a) Meaning

Impact is the degree of confidence that

A sense of meaning is the value of the goal

one's actions make a difference from others

or purpose of a task judged from thefrom the viewpoint of achieving the purpose

perspective of individual ideals or standards.

of the task, or that it produces the intended

The degree of meaning decreases when theeffect in the task situation.

ideals and standards of an individual deviate

In this research, three of these four

from the role requirements of work. On thedimensions as the constituent dimensions ofcontrary, the degree of sense of meaning

psychological empowerment was set. That isincreases when the ideals and criteria of thea sense of meaning, a sense of self-

individual and the role requirements of thedetermination, and competence.

work match.

In this study, the concepts of meaning,(b) Self-determination

self-determination, and competence among

A sense of self-determination means

these four dimensions were focused on. The

responsibility for individual behavior. It is thereason is why these three concepts are the21Journal of Japanese Management Vo.5, No.1, November 2020

ISSN 2189-9592

preconditions for the exertion of employees’enhance its sense of meaning.

creativity and ability. In addition, Bandura(d) The feedback is that the manager explains(1995)

the result of the exercise by the employee.

pointsout

that

self-efficacy(competence) is a prerequisite for a person to

Employees

be in a state of influence. In other words, the(competence) unless feedback information is

impact is considered to be a psychologicalobtained. And without it, he / she cannot

state as a result of human behavior. Therefore,know the business meaning for his / her own

this is excluded in this paper.

work. Thus, it is expected that correct

3.2 Empowering leadershipfeedback will affect competence and a sense ofThe

dimensions

that

make

up

cannotmeaning,knowenhanceempowering leadership were captured from

empowerment.

four dimensions with reference to the

3.3 the creativity exertion

theirabilities

psychologicalresearch by Thomas (2000). These are (a)The creativity was captured from four

support actions, (b) delegation of authority, (c)dimensions with reference to Takaishi andpenetration of management policies, and (d)Furukawa (2008). That is, (1) problem

feedback.

discovery(a) Support actions is to provide specialized

information action, (3) customer priority

knowledge, skills, and know-how in order toaction, and (4) ideas and suggestions. Amongenable employees to perform their jobs well.

these, three are (1) problem discovery andThis, of course, includes the manager's own

solution, (2) important information action,

illustration of exemplary behavior to theand (3) customer priority action, which areemployee. These actions would be expected toactionsenhance competence.

improvement / reform to an individual's work(b) Delegation of authority is a leadershipor plan. (4) Ideas and suggestions are actions

action that was generally taken up in pastin the process of promoting innovative

empowerment research. As its name implies,

proposals from the individual level to thedelegation of authority would be expected toorganizational level.

enhance self-determination.

3.4 the ability exertion

and

in

solution,theprocess(2)

ofimportantbringing(c) Permeation of the management policy is to

The ability exertion is captured from four

make employees understand the philosophy

dimensions with reference to Okubo (2011).

and vision of the company. And this includes

These are (1) interpersonal ability, (2) self-

articulatingtheability, (3) task ability, and (4) specialized

employee's job. Clarifying the philosophy,

ability. Of these, competency expressed asvision, and concrete goals will clarify the

behavioral characteristics is the three: (1)areas of action of the employees themselves.

interpersonal ability, (2) self-ability, and (3)At the same time, it is expected that thetask ability. This is the ability to manifest by

employees themselves will be able to work on

acting. (4) specialized ability is the ability totheir jobs without feeling anxiety. The

have the knowledge, skills and know-how

penetration of management policy, thinking

necessary for work.

thespecific

goals

of

from its content, would be expected to22

Journal of Japanese Management Vo.5, No.1, November 2020

4. Hypothesis

ISSN 2189-9592

adopted as the analysis method. multiple-

The hypothesis of this research derived

group SEM is an analysis method thatfrom the above analysis framework is ascompares different populations such as

follows.

regular

4.1 Hypothesis 1

employees.

For regular employees, the execution of
empowering

leadershipbyemployees

andTherefore,

non-regularin thisresearch,

empirical research is conducted using thismanagers

analysis method.

influence the exertion of their creativity and

By

the

way,

the

population-based

ability by enhancing their psychologicalanalysis is an analysis method similar to theempowerment.

multiple-group

4.2 Hypothesis 2

analysis has the following two problems

For non-regular employees, the execution(Toyota,2007).

SEM.
First,

Population-based
population-basedof empowering leadership by managers

analysis can assess differences between

influence the exertion of their creativity andpopulations at different parts of the model.

ability by enhancing their psychologicalHowever, the differences in the model cannot

empowerment.

be easily evaluated. Second, when analyzed

Hypothesis 1 targets regular employees.

by population, the number of samples per

As in previous studies, the execution of

population decreases. Then, the stability of

empowering

the estimated value in each population may

leadershipisexpectedtoinfluence the exertion of their creativity andabilitybyenhancing

be impaired.

psychological

Multiple-group SEM is the simultaneous

empowerment.
Hypothesis

analysis of different populations. Therefore, it
non-regularis possible to judge the difference between

employees. Few studies have been conducted

populations in the entire model based on theon non-regular employees. Aoki and Kitano

model goodness-of-fit index 4 . Furthermore,(2019)

increased

after the data are extracted from different

psychological empowerment of non-regular

populations, an analysis that considers theemployees promotes the exertion of theireffects of the population is performed.

creativity and ability. Therefore, in this study,

Therefore, the problem that the number ofeven for non-regular employees, it is expected

samples decreases can be solved. Therefore,that the execution of empowering leadershipfor the above reasons, multiple-group SEM is

influences the exertion of their creativity andadopted in this study.

ability

have

by

2

targets

revealedenhancingthat

psychologicalempowerment.

2. Survey method
A questionnaire survey was conducted to(3) Method

verify these two hypotheses. The outline is as

1. Analysis method

follows.

In this study, multiple-group SEM was

4

GFI, AGFI, CFI and RMSEA are the most commonlyused model suitability indicators.

23

Journal of Japanese Management Vo.5, No.1, November 2020

2.1 Survey implementation period

ISSN 2189-9592

2.7 Department

The survey was conducted from 24

Regarding the departments to which they

November 2017 to 11 January 2018.

belonged, there were 216 root sales employees

2.2 Implementation location(regular) and 207 sales and customers (non-The survey was conducted on employees

regular).

in "Company A," who runs the ice creamwholesale business and the supermarket

3. Question items

business.

For

the

purposeofverifyingthe

2.3 Questionnaire distribution and collection

hypothesis presented in this research, themethodquestion items of the following four variables

The

surveywas

distributed

as

a

were

created.

These

were

empowering

questionnaire through a person in contact

leadership (3.1), psychological empowermentwith “Company A”. And it was collected at a(3.2), the creativity exertion (3.3), and thespecific place.

ability exertion (3.4). (Refer to List of question

2.4 Questionnaire collection rate

items)The questionnaire recovery rate was 84%.

All items were rated on a 6-point scale,For details, 525 were distributed and 441

from "exactly" to "totally different".

were collected. The final survey subjects were

3.1

423 people who did not have missing values

leadership

Measurement

scale

of

empowering

for the question items used in the analysis of

As a measure of empowering leadership,

this study. The details were 216 regular

A total of 22 items were cited from the studies

employees and 207 non-regular employees.

of Thomas (2000), Nakahara (2010) and

2.5 Attributes of regular employees

Matsuo (2013). As for details, there were 7

Regarding sex, there were 216 males anditems for support actions, 5 items for0 females. Regarding age, 57 were under 25delegation

years old, 62 were 26-35 years old, 73 were 36-

penetration of management policy, and 4

45 years old, 19 were 46-55 years old, and 5

items for feedback.

were 56 years old or older. The number of

3.2 Measurement scale of psychologicalyears of service was 149 for 5 years or less, 52

empowerment

for 6 to 15 years, 11 for 16 to 25 years, and 4ofauthority,

6

items

for

A total of 13 items of psychologicalfor 26 years or more.

empowerment

2.6 Attributes of non-regular employees

measurement scale of Thomas (2000). As for

Regarding sex, there were 42 males andwerequotedfromthedetails, 5 items were meaning, 3 items were

165 females. Regarding age, 60 were under 25

self-determination,

and

5

items

years old, 28 were 26-35 years old, 39 were 36-

competence.

45 years old, 44 were 46-55 years old, and 36

3.3 Measurement scale of creativity

were

were 56 years old or older. The number ofA total of 16 items of creativity wereyears of service was 131 for 5 years or less, 54

quoted from Takaishi's (2013) measurementfor 6 to 15 years, 21 for 16 to 25 years, and 1

scale. The details were 4 items for problem

for 26 years or more.

discovery and solution, 4 items for important24

Journal of Japanese Management Vo.5, No.1, November 2020

ISSN 2189-9592

information action, 4 items for customer

values were deleted. Then, confirmatory

priority action, and 4 items for ideas andfactor analysis was performed again. For thesuggestions.

question items that make up each variable,

3.4 Measurement scale of ability

the α coefficient was calculated based on 0.7

A total of 12 items of ability were quoted

or more. Its reliability was confirmed. The

from the measurement scales of Okubo (2010)

results ofand Motomura and Kawaguchi (2013). The

follows.

these factor analyses are as

details were 4 items for interpersonal ability,

Empowering leadership was a three-

2 items for self-ability, 4 items for task ability,

factor structure with a total of 13 items.

and 2 items for specialized ability.

Psychological empowerment was a threefactor structure with a total of seven items.

(4) Analysis result

Exertion of creativity was a four-factor

1. Factor analysis results

structure with a total of 16 items. It was found

It is necessary to verify that the datathat the exertion of the ability was a two-collected by the questionnaire survey has afactor structure with a total of 12 items.

factor structure according to the model

Regarding empowering leadership, thisassumed in advance. Therefore, exploratory

study did not identify support actions andfactoralldelegation. Therefore, it is newly named as aemployees. This exploratory factor analysis

delegation support action. Also, regarding thewas carried out until the structure became

exertion of ability, no distinction was madesimple. In addition, with the eigenvalue of 1

between (2) self-ability, (3) task ability, and (4)or more as the factor extraction criterion,

specialized ability. Therefore, it was newly

question items showing a factor load of lessnamed personal ability. (Shown in Table

than 0.4 or multiple factors of 0.3 or more

1~Table5).

analysis

wasconducted

forwere deleted.

The value of the α coefficient for eachThen, a confirmatory factor analysis wasfactor extracted by factor analysis was 0.7 or

performed based on the results of thehigher in all cases. Empowering leadership

exploratory factor analysis. This verified the(delegation authority support action = .906,

goodness of fit of the model and the data. The

management policy penetration = .931,

model fitness index used here is as follows:

feedback = .941). Psychological empowerment

GFI (Goodness of Fit Index), AGFI (Adjusted(meaning = .879, self-determination = .821,

Goodness of Fit Index), CFI (Comparative Fit

competence = .907). The creativity exertion

Index), RMSEA (Root Mean Square Error of(problem discovery and solution = .900,

Approximation).

important

information

action=.917,

In addition, it is considered that thecustomer priority action = .927, ideas andmodel goodness of fit indexes does not show asuggestions = .937). The ability exertion

sufficient value. Therefore, for the purpose ofDemonstrate ability (interpersonal ability

standardizing the coefficient from the latent= .877, personal ability = .887).

variable of each factor to the observed
variable, the items showing relatively low
25

Journal of Japanese Management Vo.5, No.1, November 2020

ISSN 2189-9592

Table 1 Results of the exploratory factor

Q3-7

-.087

.920

-.072

-.100

analysis (EL)

Q3-8

.023

.698

.197

.128

Q3-9

.020

.139

.613

.008

Q3-10

-.060

.019

.734

.060

Q3-11

.082

-.103

.898

-.100

Delegation
supportactionPenetration ofmanagement
policyFeedback

Q1-1

.776

.214

.189

Q3-12

-.032

.061

.619

.128

Q1-3

.548

.263

.200

Q3-13

-.093

.145

.077

.743

Q1-4

.566

.219

.069

Q3-14

.048

-.040

-.035

.954

Q1-6

.594

-.250

.188

Q3-15

.173

-.124

.032

.856

Q1-8

.702

.039

.096

Q3-16

-.039

.249

-.045

.645

Q1-9

.873

.021

.007

Q1-11

.709

-.031

.018

Q1-14

.135

.746

-,014

Q1-15

-.105

1.005

-.013

Q1-16

-.067

.955

-.003

Q1-19

.223

-.150

.800

Q1-20

-.046

-.018

Q1-21

.077

.094

Table 4 Results of the exploratory factor
analysis (Ability)
Interpersonal ability

Personal ability

Q6-1

.787

-.082

.915

Q6-2

.792

-.049

.869

Q6-3

.738

.018

Q6-4

.824

-.077

Q6-5

.110

.501

Q6-6

.205

.580

Q6-7

.224

.523

Competence

Q6-8

.184

.564

Q6-9

.245

.529

Q6-10

.280

.501

Table 2 Results of the exploratory factor
analysis (PE)Meaning

Selfdetermination

Q2-1

.709

-.056

.100

Q2-3

.877

.020

-.005

Q6-11

-.129

.969

.045

-.067

Q6-12

-.048

.919

Q2-4

.884

Q2-7

.083

.656

.019

Q2-8

-.058

1.015

.005

Table 5 Results of the confirmatory factor

Q2-10

.050

.023

.762

analysis

Q2-11

.027

.001

.966

Table 3 Results of the exploratory factor
analysis (Creativity)
Problem
discovery
andsolution

ImportantCustomer

information

priority

actionactionIdeas
andsugges
tions

GFI

AGFI

CFI

RMSEA

EL

.887

.843

.906

.078

PE

.921

.897

.943

.065

Creativity

.916

.874

.957

.081

Ability

.898

.854

.914

.071

Next, two populations, regular employees
and non-regular employees, need to make

Q3-1

.868

.075

-.099

-.022

Q3-2

.801

.047

.079

-.079

Q3-3

.687

-.004

.023

.079

structure can be assumed. For this reason,

Q3-4

.606

-.096

.054

.178

configural invariance was examined in a

Q3-5

.193

.660

.073

.008

multiple-group SEM 5.

Q3-6

.015

.869

-.062

.060

sure that a factor model with the same

Configuration invariance is the following hypothesis.
Even if the path diagrams are the same between

groups, the estimated values may be different.

526

Journal of Japanese Management Vo.5, No.1, November 2020

As a result, the goodness-of-fit index was

ISSN 2189-9592

Table 7 Fitness index of each model

shown as a good model in any scale. The
results are shown in Table 6. Thus, theconfigural invariance was confirmed.
Table 6 Goodness-of-fit index for placement-

GFI

AGFI

CFI

RMSEA

AIC

Model 1

.757

.716

.881

.056

2381.691

Model 2

.755

.720

.880

.052

2371.240

Model3

.753

.720

.878

.055

2387.213

invariant model
Please refer to Figure 2 and Figure 3.

GFI

AGFI

CFI

RMSEA

EL

.855

.791

.938

.065

multiple-group

SEM

of

PE

.971

.925

.983

.033

employment

type.

For

Creativity

.905

.852

.931

.055

empowerment, which is a mediating variable,

Ability

.894

.831

.917

.065

the 95% confidence interval was calculated by

These figures show the results of the
Model

2

by

psychologicalthe bootstrap method (1,000 re-samplings),
and it was examined whether the indirect

2. Results of model analysis by employment

effect was significant.

type

We also confirmed the extent to which

The aim of this research was to make a

the path coefficient from the empowering

difference in each model due to the difference

leadership of the independent variable to thein employment type. To examine these, it was

creativity and ability of the dependentnecessary to perform a multiple-group SEM.

variable were changed by interposing the

In the multiple-group SEM, the following

mediating variable. Based on this, it was

three models were set.

examined whether the mediating effect ofModel 1：all path coefficients are unconstrained

psychological empowerment is a complete

Model 2：assuming equal path coefficients frommediation or a partial mediation. The indirect

latent variables to observed variables

effect is significant if 0 is not included in the

Model 3：in addition to Model 2, it is assumed

95% confidence interval. And, if 0 is included,that the path coefficients between latent

it becomes insignificant. Also, when the value

variables are also equalof the path coefficient becomes insignificant,It was examined whether a model of theit becomes a complete mediation. If it remains

same structure was assumed. Note that GFI,

significant, it is a partial agent.

AGFI, CFI, RMSEA, and AIC (Akaike's
Information Criterion) were used as thefitness index of each model. As a result, thegoodness-of-fit index of Model 2 was the best
overall. (Shown in Table 7). For this reason,
Model 2 was adopted in this study. Then, thesubsequent analysis was conducted.

27

Journal of Japanese Management Vo.5, No.1, November 2020

Psychologicalempowerment.233*/.172*

Empowering
leadership

ISSN 2189-9592.923***/.706***

Creativity.186*→－.054/.376***→.259***(* Pass coefficient values are regular on the left and non-regular on the right)＊＝p<.05，＊＊＝p<.01，＊＊＊＝p<.001
95％CI［－.134，.674］/95％CI［－.027，.256］

Figure 2 Mediation model of creativity with objective
variables
Psychologicalempowerment.377***/.142.829***/.656***

Empowering
leadership

Ability.345***→.020/.370***→.184***(* Pass coefficient values are regular on the left and non-regular on the right)＊＝p<.05，＊＊＝p<.01，＊＊＊＝p<.001
95％CI［.040，.693］/95％CI［－.053，.260］

Figure 3 Mediation model of ability with objective
variables
The results of the analysis partiallyemployees’ creativity and ability, throughsupported Hypothesis 1. And, the result

psychological empowerment.

supporting Hypothesis 2 was not obtained.
For

regularemployees,

In regular employees, the relationshipmanager's

between empowering leadership and theempowering leadership was influenced byexertion of employees’ ability did not include

psychological empowerment to exert their

0 in the 95% confidence interval (.040, .693).

abilities.

The value of the path coefficient from

However,creativity

was

not

influenced by psychological empowerment.

empowering

On the other hand, for non-regular
employees,

themanager's

leadershiptoabilitydevelopment changed from .345 (p <.001)

empowering

to .020 (non-significant). Therefore, theleadership had no effect on the exertion ofmediating28

effectofpsychologicalJournal of Japanese Management Vo.5, No.1, November 2020

empowerment was complete mediation.

routine. It would, of course, be expected to

On the other hand, when the objective

havevariable was creativity, 0 was included in the95%

confidence

Therefore,

intervalthepsychological(-.134,ISSN 2189-9592

different

resultswhen

targeting

employees whose tasks are complex.

.674).

A study of non-regular employees foundmediatingeffectofnoempowerment

was

not

empowermenton

performance.

However,confirmed.
The relationship between empowering

mediatingmagnitude

effectofofpsychologicaleitherthecreativity

looking

pass

or

at

the

coefficientforleadership and the exertion of employees’

creativity and performance of abilities fromcreativity

the

and

abilityinnon-regular

model

for

non-regular

employees,

employees is as follows. When the objective

psychological empowerment had a great

variable was creativity, 0 was included in theinfluence. It was found that psychological

95% confidence interval (-.027, .256). Whenempowerment needs to be enhanced tothe objective variable was ability, 0 was

promote the creativity and ability of non-included in the 95% confidence interval

regular employees. That is, the reason why(-.053, .260). In all of the above cases, thethemediatingempowerment

was

examined.

shows

effectofpsychologicalempowerment was not confirmed.

mediatingIteffectofnotpsychologicalconfirmed

that

was

empowering

leadership is not effective for non-regular(5) Conclusion of this study

employees.

1. Discussion of analysis results

The reason why empowering leadership

Here, the analysis results of this research

did not affect the psychological empowerment

are summarized.

of non-regular employees will be considered.

In short, the effects of empowering

The first reason is that when compared withleadership were different for regular and non-regular employees, the purpose of work andregular employees.

the opportunity for vocational training were

In a conventional study of regulardifferent. Non-regular employees and regular

employees, it was said that empowering

employees

leadershipofopportunities for in-house training. The lesser

employees’ creativity and ability throughopportunities for in-house training, such as

psychological empowerment. In the present

non-regular employees, make them lessstudy, similar results were obtained withconfident that they will be able to performregard to the results of verification of

their actions well, even if they are assigned

employees’ ability exertion. However, thethe job. Therefore, it becomes difficult tomediating

improve the competence.

influences

effecttheofexertion

psychologicalempowerment was not confirmed in the resultofverificationdifferent

The most common reason for non-regular
employees to work under the status of non-exertion. This was thought to be because theregular employment is to earn supplementary

dataincome. In a comprehensive fact-finding

employees

collected

employees’

havecreativity

was

of

generally

andwhose tasks

analyzed

forwere relatively

survey29(2014)

ondiversificationofJournal of Japanese Management Vo.5, No.1, November 2020

ISSN 2189-9592

employment styles, the Ministry of Health,regular employees. Regarding these points, itLabor and Welfare shows the reasons foris necessary to empirically clarify thechoosing the employment style of non-regular

relationshipemployment. Most often I was able to work at

system (job design and reward system) andmy convenience (37.9%). And the next mostpsychological empowerment as a factor

thing I wanted to do was get home assistancedifferent from empowering leadership. The

and tuition (30.6%). When working for this

above is the subsequent subject.

betweenthe

management

purpose, even if delegated to the power of theSecondly, there may be a bias in theorganization, they would only see it as ancollected data. For example, even employees

increase in the amount of work if they could

with the same employment pattern may havenot increase the income. In other words, thedifferent

non-regular employee thinks that the purpose

However, the data collected in this study didof the work and the role demand of the

not have any female regular employees. The

company are divergent. That means that theeffect of empowering leadership could not besense of meaning does not increase. As

verified by gender comparison. In thedescribed above, in order to enhance thesubsequent studies, it is necessary to verify

psychological empowerment of non-regular

the effect of empowering leadership from theemployees, not only empowering leadership

combination of employment type and gender.

but also a management system that supports

In addition, it was the wholesale / retailthem within the company (changes in job

industry that was the subject of this study. It

design and compensation system, etc.) is

was necessary to conduct a similar survey fornecessary.

other wholesale / retail and restaurant

results

dependingongender.

businesses where non-regular employees
2. Subsequent issues

often carry out core business. These are

Finally, the issues in this paper are

indispensable

verifications

becausetheysummarized below. First, we could not clarify

serve as the basis for examining thethe process of non-regular employees to thepossibility of generalizing the theory. It will be

exertion of their creativity and ability. The

the subject after that.

starting point of this research was theresearchquestion,

"Is

the

empowering

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Journal of Japanese Management Vo.5, No.1, November 2020

Appendix
Questions about empowering leadership (22items)
Support actions
Q1-1 Your boss often provides specialized
knowledge, skills, and know-how that will
improve your work.
Q1-2 My boss often dispatches a help boat
when you are in trouble.
Q1-3 Your boss patiently takes time to discuss
your business problems.
Q1-4 My boss is trying to lead his
subordinates by setting an example.
Q1-5 Your boss will give you an objective
opinion about your work.
Q1-6 Your boss is encouraging you to come up
with a way to work when your job goes wrong.
Q1-7 My boss treats his subordinates equally.
Delegation of authority
Q1-8 My boss listens to the ideas andsuggestions given by his subordinates.
Q1-9 My boss often gives my subordinates achance to express their opinions.
Q1-10 The boss basically entrusts you withthe work.
Q1-11 Your boss will let you do the work you
can do if you work hard.
Q1-12 My boss entrusts me with a task thatis slightly higher than your ability.
Penetration of management policy
Q1-13 Your boss will explain how meaningful
your work is for you.
Q1-14 Your boss will explain how meaningful
your job is for your company and workplace.
Q1-15 Your boss will explain to you thepolicies, policies and goals of the company.
Q1-16 Your boss will explain to you themeaning of the company's policies, policies
and goals.
Q1-17 Your boss will explain your workplacevision and role in relation to company-wide
policies, policies and goals.
Q1-18 My boss is focusing on a few important
items about your workplace issues.
Feedback
Q1-19 My boss will always give me hard work
regardless of the success or failure of yourwork.
Q1-20 Your boss first tells you what is goodabout your work and then points out the
problem.

purosesu moderu ni kansuru ichi kosatsu:
Riidaashippu to forowaa no sougosayo
kankei wo cyuushinni (AStudy on theProcess Model of the Organizational
ClimateChange:CenteredontheInteraction of a Leader and a Follower),

Wako-Keizai, Vol.45, No.3, Institute ofSocio-Economic

Research,

Wako

(Ed.)

(2007).

University, pp.33-40.
Toyoda,H.

Kyoubunsankozobunseki

ISSN 2189-9592(Covariance

Structure Analysis), Tokyo: Tokyo Tosyo
Co., Ltd..
Tuckey, M. R., Bakker, A. B. and Dollard, M. F.
(2012). Empowering Leaders Optimize
Working Conditions for Engagement: A
Multilevel Study, Journal of Occupational

Health Psychology, Vol.17, pp.15-27.
Zhang, X. and Bartol, K. M. (2010). Linking
Empowering Leadership and Employee
Creativity: The Influence of Psychological
Empowerment, Intrinsic Motivation, andCreative Process Engagement, Academy ofManagement Journal, Vol.53, pp.107-128.

33

Journal of Japanese Management Vo.5, No.1, November 2020

Q1-21 Your boss will tell you the parts you feel
have grown up in your regular work.
Q1-22 Your boss will honor your growthhonestly.
Questions about psychological empowerment(13 items)
Meaning
Q2-1 You value your current work.
Q2-2 You think that your work is useful for
important things.
Q2-3 The work you are doing is important toyou.
Q2-4 It is meaningful to you that you try toachieve it at work.
Q2-5 You are doing something worthwhile.
Self-determination
Q2-6 How you deal with things is up to you.
Q2-7 You decide for yourself what to do atwork.
Q2-8 You decide a lot of things yourself.
Competence
Q2-9 I am good at your current job.
Q2-10 You are now proficient in what you aredoing.
Q2-11 You can work efficiently.
Q2-12 You can do your job well.
Q2-13 You can manage your job well.
Question items about creativity (16 items)
Problem discovery and resolution
Q3-1 You solve work problems efficiently.
Q3-2 You work while improving daily.
Q3-3 You clarify work issues / problems.
Q3-4 You work more efficiently.
Important information action
Q3-5 You are collecting information related tothe company and workplace.
Q3-6 You are deepening your knowledge of theindustry and competitors.
Q3-7 You are studying a field that you thinkis necessary for your company or work.
Q3-8 You are collecting the informationnecessary to carry out your work.
Customer priority action
Q3-9 You respond based on the requests andinterestsofcustomers
andrelateddepartments.
Q3-10 You often hear the needs andcomplaints from customers and related
departments.
Q3-11 You give priority to customers andISSN 2189-9592

related departments.
Q3-12 You give an opinion from thestandpoint of the customer and related
departments.
Ideas and suggestions
Q3-13 You are giving out an idea that you
have never seen.
Q3-14 You come up with a better way.
Q3-15 You come up with a more efficient way.
Q3-16 You are explicitly proposing ideas for
new projects and work style reforms.
Question items about demonstrating ability(12 items)
Interpersonal ability
Q4-1 You can respect the opinion of the otherperson more than before.
Q4-2 You can be more interested in the otherperson's facial expression, appearance,
physical condition, etc.
Q4-3 You can talk to any person from thesame point of view than before.
Q4-4 You can honestly praise the good pointsof the other party.
Self-ability
Q4-5 You can stabilize your mind and work
more everyday than before.
Q4-6 You are more confident that your work
will be accomplished better than before.
Task ability
Q4-7 You can investigate the causal
relationship of problems and clarify what is
the real problem than before.
Q4-8 You are not distracted by past cases andemotions and do not offer easy solutions than
before.
Q4-9 You can make solutions and deal withproblems faster than before.
Q4-10 You can act with the belief that you canalways achieve it more than before.
Specialized ability
Q4-11 You are able to work faster than before.
Q4-12 You are able to work more accurately
than before.

(Received: July 3, 2020)(Accepted: October 10, 2020)34

Journal of Japanese Management Vo.5, No.1, November 2020

ISSN 2189-9592

Government Evaluations in Japan’s Municipalities Based on
Nationwide Survey Data
Yasutoshi Moteki

Graduate School of Humanities and Social Sciences, Hiroshima University
Nippon Urban Management and Local Government Research Association
E-mail: moteki@hiroshima-u.ac.jp
Abstract

Government evaluations in Japan are linked to business culture. This study investigated
the government evaluations in cities and towns/villages using primary survey data. The
surveys were conducted by the author and Hiroshima University in 2006, 2014, and 2015.
The 2006 and 2014 surveys (Nationwide Survey of Japanese Cities Regarding Government
Evaluations) were on city municipalities in Japan, and the 2015 survey investigated town andvillage municipalities (Nationwide Survey of Japanese Towns and Villages). This study, basedon the survey data, intends to identify the changes in government evaluations in Japan’s local
municipalities over time and attempts to determine the differences among municipalities ofdifferent sizes.
A dominant method of government evaluations in Japan’s municipalities is Jimujigyo
Hyoka, a cross-sectional evaluation of programs via performance measures, which is
implemented by 80% of municipalities with government evaluations. The survey datasuggested the differences between the cities and smaller municipalities in terms of
implementation and challenges. Cities were more likely than smaller municipalities toimplement evaluations (84.6% vs. 37.4%). Some of the differences were with regard to
implementation rates, the reasons for implementation, and the types of problems they wereencountering. Thus, smaller municipalities needed different approaches of evaluationcompared with cities.
An important finding of this study is that the smaller municipalities were relatively lessinterested in conducting government evaluations owing to their limited resources. Fiscal
constraints tend to limit the number of public officials in small municipalities, and those
officials tend to lack the expertise needed to conduct evaluations. Thus, officials in relatively
small municipalities need focused training to obtain the skills necessary to implement
evaluations.

Keywords: Government Evaluations, Local Municipalities, Urban Management, Public
Officials, Jimujigyo Hyoka,

35

Journal of Japanese Management Vo.5, No.1, November 2020

ISSN 2189-9592

had evaluated national research and development
projects in the 1960s through to the 1980s. It was not
until the Mie prefectural government introduced
Jimujigyo Hyoka and other evaluation measures thatJapanese policy circles considered evaluation an
important activity.
After the introduction of the system in Mie
Prefecture, evaluations, referred to as Gyosei Hyoka(government evaluations), boomed in Japanesemunicipalities in the 1990s and improved governmental
efficiency and effectiveness. Gyosei Hyoka also helped
raise awareness of the importance of effective and costeffective government policies among public officials. The
concept of government evaluations as used in the UnitedStates means simply "evaluations by government." In
contrast, Gyosei Hyoka in the Japanese context
generally means "evaluations by local governments inrelation to administrative reforms."
This definition of government evaluations in local
government practice and research as well as thedefinition used by the Ministry of Internal Affairs andCommunications (MIC) differ. First, the term Gyosei
Hyoka is used in the title of the MIC’s Administrative
Evaluation Bureau (Gyosei Hyoka Kyoku). This Gyosei
Hyoka of the MIC is often referred to as Gyosei Hyoka Kanshi in Japanese, meaning administrativeevaluations and oversight. Second, the MIC conducts asurvey of the implementation of Gyosei Hyoka by local
municipalities about every three years. The broad
definition of Gyosei Hyoka used in the survey is takenfrom https://www.soumu.go.jp/main_content/0005017
50. pdf) and reads as follows:(1) Introduction

In Japan, Jimujigyo Hyoka, a cross-sectional
evaluation of programs, is based on the method of
performance measurement. This evaluation method
focuses on the performance of each Jimujigyo (programand project) in all departments and creates evaluation
results sheets in a unified format based on ex-post
evaluations. Its use has spread throughout Japan’smunicipal governments under the influence of New
Public Management (NPM), and, in particular, thereinventing government movement (Osborne &Gaebler, 1992) in the United States. Azuma (2002)
proposed that fiscal deterioration, such as increases inlong-term debt, was the background of NPM, arguingthat emphasizing efficiency or effectiveness promoted
the implementation of policy evaluation systems in
Western countries.
There may also be a relationship between program
evaluation and auditing. For example, Yamamoto and
Watanabe (1989) explained performance auditing inJapan by linking it to deteriorating financial conditions.
Hatry (2013) described the history of and relationshipbetween program evaluation and performancemeasurement in the United States. Kudo (2015)
employed literature reviews to analyze the association
between conventional public administration and NPM
theories, including post-NPM, New Public Governance(NPG), and administrative reforms. Yonezawa (2007)
discussed evaluations in the context of reforms in higher
education.
Theories and evaluation techniques became a focus
for practitioners and scholars of Japanese public
administration in the early 1990s. Morisugi (2000)
examined manuals on evaluating transit projects suchas roads, railways, airports, and seaports, and found thatinconsistencies among the manuals across policy areas
led to difficulties in preparing universal evaluation
frameworks. Earlier, Tanaka (1989) had discussed how
the Ministry of International Trade and Industry (MITI)

The term Gyosei Hyoka in this survey isdefined as judging the relevance, achievement andresults of policies, measures and administrative
programs, regardless of whether they are
implemented before, during or after the event,based on certain criteria and indicators. The scope
36

Journal of Japanese Management Vo.5, No.1, November 2020of policies to be covered corresponds to the scope ofpolicies of ‘policy evaluations’ in the national
government level and ‘Administrative Program
Review (Gyosei Jigyo Review)’ of the central
government.

ISSN 2189-9592

have to tailor their evaluation methods to meet theirneeds and human resources.
(2) Literature review

Several quantitative studies of government
evaluations in Japan have been conducted. Japan’s
Ministry of Internal Affairs and Communications
conducts a mail survey (Status of Government
Evaluations in Local Municipalities) of all municipal
governments, including prefectures. These surveys arecarried out once every three years, and the response
rates are very high (e.g., the response rate in the 2016
survey was 100%). However, the reports are limited totabulations of responses, although the raw data from theindividual answer sheets of each respondent areavailable in Excel format (Ministry of Internal Affairs
and Communications, 2017). The ministry has notanalyzed trends, patterns, or other changes over time.
Tabuchi (2010) analyzed the 2009 survey datacollected by Mitsubishi Research Institute. Thesesurveys were carried out from 1998 until 2009 to clarify
the state of municipal governments’ administrativeevaluations. Tabuchi (2010) summarized the survey
findings across time and organized the evaluations into
four stages, each lasting roughly three years. As thetiming differed across municipalities, “the municipalities
introducing the evaluation system are mixed on the fourstages” (Tabuchi, 2010, p. 33). They faced various
challenges, including finding ways to eliminate theburdensome feeling of engaging in the evaluation work,
ways to use the evaluation results, and ways to moveaway from evaluations performed by the government
alone.
Other papers and reports based on survey data
mostly reported simple tabulations of the questionnaire
item responses. The relationships between variables
have not been statistically tested. Sato’s (2013a) crosssectional survey of Japan’s municipalities in 2012(excluding prefectures, towns, and villages) aimed to

These two uses differ from the concept of Gyosei
Hyoka in the study of local administration and its
practice. Gyosei Hyoka were often adaptations of theevaluation methods used by private enterprises. They
tended to ignore the organizational differences between
public and private entities. Japanese academic
supporters of Gyosei Hyoka often introduced methods
that had been successfully implemented by private
enterprises into municipal governments without
carefully considering the differences. The lack ofattention to these differences may have had unintended
harmful consequences, such as evaluation fatigue
related to the large amount of paperwork involved inthese activities.
This study analyzed the opinions of public officials
managing municipal Gyosei Hyoka by using primarynational-level survey data on implementation andproblems related to government evaluations in cities
and towns/villages. The national survey on towns andvillages was conducted in 2015, and its data werecompared with those of a survey conducted on cities in2014 (Moteki, 2015). This paper discusses government
evaluations in Japan at the municipal level using survey
data gathered by the author in 2014 and 2015 inaddition to the definitions and status of government
evaluations in the Japanese context. This paper has fourparts. A review of the literature on the evaluation
methods used by Japan’s municipal governments isfollowed by a description of the survey methods used inthis study. A comparative analysis of the 2014 and 2015
surveys is presented next. The conclusion summarizes
the differences between the cities and smaller
municipalities, and I argue that smaller municipalities
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Journal of Japanese Management Vo.5, No.1, November 2020

ISSN 2189-9592

usually comprising scientific policy evaluations. Seisaku
Hyoka has three aspects: the Jigyo Hyoka (project
evaluation), the Jisseki Hyoka (performance evaluation),and the Sogo Hyoka (comprehensive evaluation) (Koike
et al., 2007).
Gyosei Hyoka usually concerns municipal
governments and is often about government downsizing
or inefficiencies. It has two approaches: (1) Jimujigyo
Hyoka, which uses benchmarking and policy indicators
for public works’ (infrastructure) evaluations; and (2)Gyomu Tanaoroshi (work process analysis), started by
the Shizuoka Prefecture under the guidance of Professor
Kitaoji of Meiji University in FY 2003. The dominant
methods of evaluation used by the Gyosei Hyoka ofmunicipal governments is the Jimujigyo Hyoka Crosssectional Program Evaluation System.
Jimujigyo Hyoka became popular in Japan mainly inresponse to the United States’ 1993 Government
Performance and Results Act (GPRA) and thereinventing government movement (Osborne &Gaebler, 1992). The GPRA triggered a boom ingovernment evaluation activities in the United States.
Since the GPRA Modernization Act of 2010 (GPRAMA),
federal departments and agencies have developed
strategic plans, goals, and indicators to implement the
GPRAMA. A system for evaluating and improving
policies based on these indicators was introduced. In
1996, Mie Prefecture was the first Japanesemunicipality to implement Gyosei Hyoka based on the
US experience, and other Japanese municipalities
followed suit. Eventually, Seisaku Hyoka was
implemented at the national level through theGovernment Policy Evaluations Act (Act No. 86 of 2001;
Act 86).
Along with the law, policy evaluations by the central
government have been governed by the Standard
Guidelines for Policy Evaluation published by theGovernment Council for Policy Evaluation in 2001. The
roles of each ministry’s managing department areclarify the structure and function of government
evaluations for the administrative management system.
The 810 municipalities included the Tokyo Metropolitan
District and had a response rate of 73.8%.
According to Behn (2003), public managers measureperformances in order to evaluate, control, budget,
motivate, promote, celebrate, learn, and improve.
Among these reasons, Jimujigyo Hyoka in municipal
governments has been focused toward making
improvements in the budget mostly because of financial
crises. Other program evaluation methods (particularly
the logic model) that are considered important by theAmerican Evaluation Association (AEA) are notwidespread in Japan.
Noutomi and Nakanishi (2007) analyzed thecharacteristics of NPM reform movement started in the
mid-1990s in Japan’s municipal governments byfocusing on performance budgeting, total quality
management, and target-based budgeting. They
concluded that the performance measure used by themunicipal governments was similar to conventional
budgetary control. However, implementing aperformance measure led to the diffusion of the notion ofprogram evaluation, including logic models, which is an
ongoing process. The Ministry of Internal Affairs andCommunications recently added this to the national
training in policy evaluations for government officials.
Uchida (2009). Uchida (2009) discusses the disruptions
that NPM-type government evaluations cause to small
municipalities. This study’s questionnaire of the survey
also focuses on small municipalities and aims to identify
differences in the situation between small and large
municipalities.
(3) Government evaluations in Japan

Gyosei Hyoka is Japan’s main evaluation tool.
Although it is sometimes interchangeably used with
Seisaku Hyoka (policy evaluation), the latter mostly
indicates evaluation activities in the central government,
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Journal of Japanese Management Vo.5, No.1, November 2020

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Gyosei Hyoka became closely linked to management

described in Section 1 under Chapter 3. Two of the fiveroles are “planning and formulation of basic mattersrelated to policy evaluation of administrative work incharge (development of implementation guidelines andmanagement policies for evaluation implementation)”and “promotion of training and securing humanresources capable of policy evaluation.” Training people
to be policy evaluators is an important foundation forachieving effective evaluations; however, only one study
on evaluators’ competencies has been conducted inJapan (Sato, 2013b). The Ministry of Internal Affairs
and Communications regularly conducts trainings onpolicy evaluation methods for both national andmunicipal public officials. National-level trainings takeplace in Tokyo, and municipal-level trainings are held inregional central cities. It is not easy for municipal officials
to participate because the venues, Tokyo or the central
regional cities of each area, are located far from local
municipalities.
Yamaya (2002) pointed to academic research andgovernment practices while focusing on the influences ofthe evaluation methods used by private enterprises on
government evaluations and argued that policy
evaluation in Japan “has been ‘evaluation’ far from themodel drawn by the theory of evaluation” caused by thelack of “interpersonal exchanges” between academics
and practitioners (p. 337). Yokoyama (2009) proposedthat when the policy evaluation system began inmunicipalities in the 1990s, its main purpose wasadministrative reform. She used Nihon Keizai Shimbun(a Japanese newspaper) data to analyze therelationships between implementation by municipalities
and possible predictors such as the extent ofadministrative reform. Two of these variables were “theintroduction of evaluation systems” and “making thebalance sheet, evaluation results, and committee
meeting minutes publicly available.” She found a
statistical relationship between the independent
variables and “improvement of administrative services.”

reform and was significantly influenced by the
management practices of private enterprises. Former
automaker employees employed at government offices
were often asked to help guide administrative reforms
and improvements. Private enterprise management
tools were directly applied to improve governmental
operations, perhaps related to the NPM movement.
Applying the practices of the private sector contributed
toward the dissemination of Gyosei Hyoka, the gaps
between the evaluations being used and program
evaluation theory, and the evaluation fatigue andformalization (ritualization) of the systems.
Gyosei Hyoka by municipal governments often
related to efficiency through Gyosei Keiei (publicmanagement) and Gyosei Kaikaku (administrativereform). However, it is not clear whether the evaluations
benefitted the public officials or the stakeholders.
Observations in the current study revealed that
implementation was a heavy burden on public officials
in the central evaluation departments because
evaluations at the municipal level tended to bechallenging for the officials on account of negative public
opinion of government and public demand for efficiency.
The public and stakeholders tended to mistakenly
perceive evaluation as a means of achieving
administrative reform by reducing waste in public
expenditure. Some business management scholars
persistently argue that business theory may easily apply
to public administration, which encourages this type ofmisunderstanding. Ueyama (1998), considered as one of
the most influential authors by practitioners and citizens,wrote “Gyosei Hyoka” no Jidai (Era of Gyosei Hyoka).
The subtitle of this text is “Perspectives fromManagement and Customers.” In short, Gyosei Hyoka
in Japan seems overly focused on efficiency and on
downsizing administrative organizations. As Yamaya(2002) explained, Gyosei Hyoka is very different fromthe original notion of program evaluation accepted39

Journal of Japanese Management Vo.5, No.1, November 2020

around the world and the concept of “government
evaluation” used by western academic societies,
including the American Evaluation Association, theCanadian Evaluation Society, and the European
Evaluation Society.
Many Japanese public officials have recently come toemphasize on Hyoka Zukare, a negative aspect ofgovernment evaluation, which means “evaluation
fatigue.” This and another similar term, “evaluation
exhaustion,” has come to be used by the Organisation for
Economic Co-operation and Development (OECD,1997). Blackmore (2003) argued that the problem of
evaluation exhaustion exists among students as well. A
previous study on program evaluations pertaining tointernational comparison focused on Sweden (Johnsen,
1999). Furthermore, there have been studies by Lahey
and Nielsen (2013), who have presented the Canadiancase, and Arthur et al. (2012), who have examined
performance auditing in Norway.
Although many Japanese municipalities haveevaluated programs based on Jimujigyo Hyoka under
the name of Gyosei Hyoka, some practitioners andresearchers have been pointing out at the negative
effects concerning the costs of the systems and the sideeffects on staff, such as evaluation fatigue (Sawada,
2010). Consequently, the logic model is attracting
attention as a framework for visually grasping the
logical relationships between the overall goals (mission)and the activities implemented (programs). Logic
models are increasingly being used by municipalities toimprove Jimujigyo Hyoka. For example, in FY 2013, theMinistry of Internal Affairs and Communications held
lectures on logic models as a part of national training inpolicy evaluations for practitioners. It focused on logic
model theories and their application. In FY 2014 and FY
2015, the logic model became a theme for the nationallevel training in Tokyo.

ISSN 2189-9592(4) Evaluation exhaustion and evaluation anxiety

Discussions in Japan on the negative aspects ofevaluation are common. Recently, evaluation fatigue
has been considered a problem of Gyosei Hyoka inJapan. Evaluation exhaustion as a negative outcome
receives little attention in other countries. Until recently,
evaluation anxiety was mostly linked to testing andlearning anxiety in pedagogy. Blackmore (2003) is one of
the few scholars who was interested in evaluation
fatigue as a broad academic topic. The OECD (1997, p.
23) has referred to “evaluation exhaustion” in the context
of scientific research evaluation.
The concepts are important because the behavioral
and psychological results of evaluation anxiety among
officials under evaluation create psychological andtemporal burdens for the entire municipality, including
evaluators and the central divisions of evaluation
activities, especially after the dissemination of theevaluation systems when the original meanings ofevaluations become unclear. After the booms of theintroduction, the burden on officials was focused among
the Japanese municipalities. Related to the concept, theadverse effects of the excessive evaluation anxiety werediscussed in the American Journal of Evaluation(Donaldson et al., 2002).
Evaluation anxiety entered Western scholarship in
about 2000 (e.g., Bechar & Mero-Jaffe, 2014; Donaldson
et al., 2002; Taut & Brauns, 2003). Donaldson et al.
(2002) described the nature of evaluation anxiety andthe excessive evaluation anxiety being addressed in the
United States and Europe, concluding that “evaluation
anxiety refers to the set of (primarily) affective, and also
cognitive and behavioral responses that accompany
concern over possible negative consequences contingent
upon performance in an evaluative situation” (p. 262).
According to these scholars, excessive evaluation anxiety
is a response to an excessively anxious situation.
The following analysis of surveys does not deal directlywith these concepts. However, it discusses how the40

Journal of Japanese Management Vo.5, No.1, November 2020

ISSN 2189-9592

183 villages as of April 1, 2015) asking about theirgovernment evaluation practices. The questionnaire
comprised 26 closed-response questions, some of which
had follow-up questions, and 4 open-ended questions. By
the deadline (December 25, 2015), 396 valid
questionnaires had been returned (response rate of
42.7%).

significance of government evaluations in Japan has beenchallenged since the initial introduction of the systems by
the local government more than 20 years ago and how each
aspect of the systems has changed.
(5) Methods
1 Nationwide surveys of Japanese Cities

This study analyzed data on Japanese municipalities
derived from surveys conducted by the author andHiroshima University in 2006, 2014, and 2015. The
2006 and 2014 surveys (Nationwide Survey of JapaneseCities Regarding Government Evaluations) were on city
municipalities in Japan, and the 2015 survey
investigated town and village municipalities(Nationwide Survey of Japanese Towns and Villages).

(6) Results
1 Implementation of government evaluations

In 2006, the survey of cities was conducted in October.
As of January 2006, there were 764 cities in Japan,
excluding the ordinance-designated cities such as Osaka,
Nagoya, and others. The targets of the survey were 764
city officials. The response rate was 71.1% (n = 543). A
summary of the 2006 survey results was published in
the Regional Economic Studies of Hiroshima University(Ito, 2007). The following tables referring to the 2006
survey use the data of Ito (2007).

Tables 1 and 2 show the population distributions ofmunicipalities. The towns and villages were most likely
to have 10,000 to 19,999 residents (n = 129, 32.7%),
followed by those with 1,000 to 4,999 (n = 87, 22.1%).
The cities were most likely to have 30,000 to 49,999
residents (n = 113, 22.0%), which was closely followed bythose with 100,000 to 199,999 (n = 108, 21.1%) andthose with 50,000 to 69,999 (n = 107, 20.9%) residents.
Table 3 shows that 84.6% of the cities were engaged in
implementing Gyosei Hyoka. About 37.4% of thesmaller municipalities were engaged in conducting
Gyosei Hyoka and about half (49.2%) of them were not,which was markedly different from the situation among
the cities. Figures 1 and 2 show the years in which themunicipalities introduced Gyosei Hyoka. The mostcommon period was 2004 through 2007 for cities andNationwide Survey of Japanese Cities Regarding
Government Evaluations, 2014

Table 1 Population Distribution of Cities in the Nationwide

Nationwide Survey of Japanese Cities Regarding
Government Evaluations, 2006

Survey of Japanese Cities on Government Evaluations,
2014
Level
Count
Ratio
Less than 30,000
43
8.4%
30,000 to 49,999
113 22.0%
50,000 to 69,999
107 20.9%70,000 to 99,999
72 14.0%
100,000 to 199,999
108 21.1%
200,000 to 299,999
22
4.3%
300,000 to 499,999
29
5.7%
500,000 and more
19
3.7%
Total
513 100.0%

In 2014, the author conducted the survey of cities in
November and December. As of January 2014, there
were 790 cities in Japan, including ordinance-designatedcities. The targets of the survey were 790 city officials.
The response rate was 65.1% (n = 514). A summary of
the 2014 survey results was published in a Japanesejournal (Moteki, 2015).
2 Nationwide Survey of Japanese Towns and Villages
Data on smaller municipalities were collected via mailin 2015. In November, questionnaires were mailed to alllegally designated small municipalities (745 towns and41

Journal of Japanese Management Vo.5, No.1, November 2020

ISSN 2189-9592

Table 2 Population Distribution of Cities in Nationwide

Survey of Japanese Towns and Villages on Government
Evaluations, 2015
Level
Count Ratio
Less than 1,000
16
4.1%
1,000 to 4,999
87 22.1%
5,000 to 6,999
43 10.9%
7,000 to 9,999
57 14.5%
10,000 to 19,999
129 32.7%
20,000 to 29,999
34
8.6%
30,000 to 39,999
20
5.1%
40,000 and more
8
2.0%
Total
394 100.0%

Figure 1 Introduction of Government Evaluations in Cities(Nationwide Survey of Japanese Cities on Government
Evaluations, 2014)

Table 3 Implementation of Government Evaluations (Cities

and Small Municipalities)
Cities (2014)

Implementing
Planning to
implement
Not
implementing
Suspended orabolished
Total

Towns/Villages(2015)

Numberof
cases

Percentage

Numberof
cases

Percentage

435

84.6

148

37.4

17

3.3

29

7.3

21

4.1

195

49.2

41

8.0

24

6.1

514

100.0

396

100.0

Figure 2 Introduction of Government Evaluations in Towns

and Villages (Nationwide Survey of Japanese Towns andVillages on Government Evaluations, 2015)

smaller municipalities. A comparison of the two
distributions suggests that implementation in towns
and villages occurred a little later than they did in cities.
Table 4 presents the types of evaluations of cities in2014 and smaller municipalities in 2015. The Jimujigyo
Hyoka (n = 356, 81.8%), Citizen Participation andCitizen Needs Evaluation (n = 80, 18.4%), Cost
Management Method (n = 52, 12.0%), andBenchmarking and Policy Indicators (n = 43, 9.9%) werethe most common types. Multiple answers were allowed.
The Jimujigyo Hyoka was implemented in 356 cities,
representing 81.8% of the cities that were engaged in
implementing Gyosei Hyoka. Kaizen Program Total

Quality Management Method, also known as Quality
Circle, is an effort to examine and discuss ways toimprove operations at Japanese automobile
manufacturing facilities. The Kaizen Total Quality
Management Method was implemented in 17 cities,
representing 3.9% of the cities that were engaged in
implementing Gyosei Hyoka (n = 6, 4.1% for towns andvillages). The Kaizen Total Quality Management
Method itself is implemented less than other methods.
The concept of Kaizen is introduced as Hoshin
Kanri (policy deployment) in the United States as aJapanese-style method of business improvement (Akao,
42

Journal of Japanese Management Vo.5, No.1, November 2020

Table 4 Types of Government Evaluations in Cities (2014)1991). Kaizen- related terms such as Management
Cycle and Plan Do Check Action (PDCA) Cycle are often
mentioned for introducing Gyosei Hyoka, including
Jimujigyo Hyoka. National training in policy
evaluations by the Ministry of Internal Affairs andCommunications held in FY2019 stressed theimportance of the Management Cycle, including the
PDCA cycle as functions of Gyosei Hyoka in slidematerials
forE-Learning,
Chapter
1(https://www.soumu.go.jp/main_sosiki/hyouka/seisaku_n/seisaku_forum.html). Some practitioners andresearchers in Japan seem to believe that such a PDCA
cycle originated in Europe and the United States
because these words seem to be English and areabbreviations of alphabets. However, these concepts
originated from the Kaizen movement in Japan, and theevaluation community in Europe and the United States
rarely mention the importance of evaluation by referringto the Management Cycle or PDCA. Yamaya (2016)
stated that PDCA, unfamiliar to overseas evaluation
practitioners and scholars, has roots in the Japanesestyle QC activities Kaizen at the production site,emphasized in corporate management.
Jimujigyo Hyoka, the standard evaluation method,is usually intended to be a side-by-side cross-sectional expost (evidence-based) evaluation of all municipalorganizations and programs. These ex post evaluations
use a performance measurement method that differsfrom program evaluation concepts, which mainly takes
an ex ante (forecasting) approach to evaluation. The
2015 questionnaire (towns and villages) asked the
respondents about when they implemented their Gyosei
Hyoka. The question allowed for multiple responses,
and 94.6% (n = 140) of the smaller municipalities that
had implemented evaluations (n = 148) had followed theex post approach, whereas 18.0% (n = 31) conductedevaluations during their programs and 25.0% (n = 43)
implemented evaluations before their programs began.
As for the frequency with which municipalities

and Towns/Villages (2015)
Cities with Implemented Evaluation Systems (2014; n =435)aTypeofsystem

Numberof
cases

Percentageof
implementing
cities

356

81.8

5

1.1

43

9.9

80

18.4

17

3.9

52

12.0

13

3.0

Jimujigyo Hyoka: Crosssectional program evaluation
system
Evaluation of publicconstruction program bymunicipalities
Benchmarking and policy
indicators
Citizen participation andcitizen needs evaluation
Kaizen Program Total Quality
Management Method
Cost Management Method
Logic models

Other
28
6.4
Towns and Villages with Implemented Evaluation Systems(2015; n = 148)a
Typeofsystem

Numberof
cases

Percentageof
implementing
municipalities

140

94.6

4

2.7

13

8.8

22

14.9

6

4.1

12

8.1

Logic models

2

1.4

Other
aMultiple responses were accepted.

13

8.8

Jimujigyo Hyoka: Crosssectional program evaluation
system
Evaluation of publicconstruction program bymunicipalities
Benchmarking and policy
indicators
Citizen participation andcitizen needs evaluation
Kaizen Program Total Quality
Management Method
Cost Management Method

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43

Journal of Japanese Management Vo.5, No.1, November 2020

Table 6 Reasons for Non-implementation of Government

conducted evaluations, almost 90% of cities and smaller
municipalities conducted annual evaluations (Table 5).
About 4.9% of the cities implemented biannual
evaluations, compared with only 2.3% of towns andvillages, suggesting differences between cities andsmaller municipalities in terms of personnel and otherresources allocated to evaluation activities.

Evaluations in Towns and Villages in 2015 (n = 248
Municipalities Not Implementing Government
Evaluations)a
ReasonPercentage

Numberof
cases

Percentage

Biannual

23

4.9

4

2.3

Annual

424

89.8

151

87.8

Biennialortriennial
Other

13

2.8

4

2.3

12

2.5

13

7.6

Total

472

100.0

172

100.0

Numberof

Percentage

cases

Themunicipality isbusy managing
municipalmergers.
Nostaffwithexpertise inconducting
governmentevaluations.
Localgovernmentsdonothaveenoughresourcestoallocate thenecessary
personnelor toestablishorganizationsto
conductevaluations.
Thetop official(the mayor) doesnot
perceivea needto conductgovernment
evaluations.
Staff membersareresistantto
governmentevaluations.
Theeffectofgovernment evaluationis
notclear.
Other.

Table 5 Frequency of Government Evaluations
Variable
Cities (2014)
Towns/Villages (2015)
Numberof
cases

ISSN 2189-9592

3

1.5

128

65.6

185

94.9

2

1.0

10

5.1

47

24.1

11

5.6

a Multiple responses were accepted.

Table 6 indicates the reasons why 248 towns andvillages had not implemented evaluations. The
respondents had seven options, and they were allowed
to choose multiple reasons. The most common reason
was the lack of resources for evaluation, which waschosen by 94.9% of the municipalities, followed by thelack of knowledgeable staff, which is also a resource.
These results indicate that towns and villages could noteasily implement evaluation systems because they
lacked the necessary resources to do so.

anticipation of a change in the evaluation system. In
2006, the respondents were most likely to expect toenhance their systems, whereas in 2014 they were most
likely to expect to maintain their current level of
evaluation. In 2015, the respondents from towns andvillages were most likely to expect to maintain theircurrent levels and the distribution of responses was
similar to that of cities in 2014. Table 8 presents thesimilarities and differences across time for cities andbetween cities and smaller municipalities. In 2006,
78.6% of the cities wanted to expand Gyosei Hyoka, but
in 2014, it was down to 39.9%. As for towns and villages
in 2015, 29.5% wanted to expand Gyosei Hyoka, which
was lower than what it was in the previous year. The
largest item for the column was the intention tomaintain Gyosei Hyoka (58.9%). To consider the reasonsfor this increase, I examine the result of Q20 (“Do you
think that the government evaluation in your city is

2 Reasons to abolish or suspend government evaluations

Table 7 presents the reasons why municipalities
abolished or suspended government evaluations. The
most common reason was that the evaluations involved
too much work (43.9% of cities and 24.0% of smaller
municipalities).
3 Intentions to enhance government evaluations

The 2006 and 2014 surveys of cities also asked about the44

Journal of Japanese Management Vo.5, No.1, November 2020

working?”) in 2006 and 2014.. In 2014, 1.7% of
respondents answered that “It works pretty well” and45.0% said “It works reasonably well.” In 2006, thesepercentages were 5.1% and 36.5%. The total percentage
of local governments choosing either response has thus
declined, suggesting that the role played by thegovernment evaluation system in each city is reducing
over time. As a result, the number of local governments
wishing to expand the system has decreased.

4 Reasons for implementing government evaluations

Table 9 compares the reasons for implementing
evaluations between cities and smaller municipalities.
“Improving fiscal efficiency” was the most common
reason and “Increase employees’ knowledge” was thenext most common among cities and smaller
municipalities. However, the city respondents weremore likely than those from smaller municipalities tochoose the two items regarding citizens, and the
respondents from the smaller municipalities were more
likely than those from cities to choose “Improveadministrative efficiency.”

Table 7 Reasons for theAbolition or Suspension ofGovernment Evaluations in 2014 (Cities) and 2015
(Towns/Villages)
Variable

CitiesTowns/Villages

Table 9 Reasons for Implementing Government

Evaluations (Multiple ResponsesAllowed)

Numberof
cases

Percentage

Numberof
cases

Percentage

8

19.5

4

17.4

Weakens
administrative
improvements
Requires too much
employee work
Change of mayor

18

43.9

5

21.7

4

9.8

3

13.0

Criticism from thelocal assembly
Other

0

0.0

0

0.0

11

26.8

11

47.8

Total

41

100.0

23

100.0

Variable

Table 8 Intentions to Enhance Government Evaluations;

Cities in 2006 and 2014 and Towns and Villages in 2015
Variable(Intend
to …)

2006(Cities)

2014(Cities)

ISSN 2189-9592

2015(Towns/Villages)%#%

Cities (2014)

Towns/Villages(2015)

#

%a

#

%b

Accountability to
citizens
Improvement of
citizen satisfaction
Increase
employees’knowledge
Improveadministrative
efficiency
Improve fiscal
efficiency
Other

213

49.8

48

32.4

80

18.7

22

14.9

215

50.2

78

52.7

133

31.1

70

47.3

217

50.7

115

77.7

22

5.1

3

2.0

Total

880

336

aProportion of cities implementing government evaluations

#

%

#

Extend/expandMaintain

276

78.6

168

39.9

43

29.5

64

18.2

208

49.4

86

58.9

Simplify/
downsize
Total

21

6.0

45

10.7

17

11.6

351

100.0

421

100.0

146

100.0

(n = 435)
bProportion of small municipalities implementing

government evaluations (n = 148)

About half the city and the town/village respondents
indicated that one reason for implementing evaluations
was to increase employees’ knowledge. A secondary
question asked the respondents about the aspects of45

Journal of Japanese Management Vo.5, No.1, November 2020

ISSN 2189-9592

employees’ knowledge that the evaluations were
expected to improve (Table 10). “Finances” and “Setting
goals and managing policy progress” were particularly
important aspects. Respondents from cities were moreinterested than those from smaller municipalities interms of citizen satisfaction.
In 2014 and 2015, the respondents were asked
about problems with government evaluations. The mostcommonly reported problems in cities in 2014 were
“Results of evaluations are unclear despite theburdensome evaluation activities” and “Quality ofcontents of evaluation sheets varies across departments
and officials in charge,” which were indicated by about
two-thirds of the city respondents (Table 11, numbers 3
and 9). “Evaluation activities rather than the results are
becoming the goal” was considered a problem for morethan half the city respondents (Table 11, number 1). The
most common problems among the 2015 respondents intowns and villages also were numbers 1, 3, and 9 inTable 11. The percentage of these three items for towns
and villages are less than that ofTable 11 Problems with Government Evaluations Reported

Table 10 Reasons to Increase Employees’Knowledge

9

Variable

Cities (2014)

%a

#

%b

Manage finances

170

79.1

64

82.1

Improve citizens’satisfaction
Improve productivity /efficiency
Set goals and manage
policy progress
Improveadministrative
efficiency
Total

129

60.0

37

47.4

138

64.2

41

52.6

199

92.6

66

84.6

4

1.9

2

2.6

ProblemNo.

Citiesn
Governmentevaluationactivities

1 ratherthantheresultsare
becomingthegoal.

2

3
4
5
6
7
8

Towns/Villages(2015)#

640

by Cities in 2014 (n = 514) and Towns and Villages in 2015
(n = 396)

10
11

12

13

210

14

aProportion of cities implementing government evaluations(n=435)Governmentevaluationactivities
arenotwellknowntothepublic,
andthereislittleresponsewhen
theyarereleased.
Resultsofgovernment
evaluationsareuncleardespite
theburdensomeevaluation
activities.
Asitisaninternalassessment,it
tendstobeusedtojustifybudgets
andorganizationalactivities.
Uniformlydealingwithareas
suitableforevaluationandareas
notsuitableforevaluation.
Itisimpossibletocompareandevaluatedifferentfieldsusinga
uniformmethod.
Themissionandpurposeof
governmentevaluationis
unclear.
Agovernmentevaluation
methodisnotestablished.
Thequalityofthecontentsof
evaluationsheetsvariesacrossdepartmentsandofficialsin
charge.
Governmentevaluationisnot
reliedonforbudgeting,reviewing
programs,andsoon.
Itisdifficulttoevaluateprograms
annuallybecausethereare
programsthatdonotproduce
resultswithinasingleyear.
Thereisatimelagbetween
organizinggovernment
evaluationsandbudgeting
process.
Astherelationshipbetween
governmentevaluationsand
administrativeoversight
performedbylocalcouncilsisnot
clear,problemshavearisen.
Budgetchangesaloneareemphasized,andprogramsthat
shouldbeenhancedareignored.

15 Other.

bProportion of small municipalities implementing

government evaluations (n = 148)

46

Towns/Villages

%

n

%

233 55.7

73

42.4

120 28.727

15.7

277 66.3

86

50.0

35

8.4

17

9.9

188 45.0

53

30.8

89 21.3

30

17.4

56 13.4

14

8.1

62 14.834

19.8

264 63.2

93

54.1

114 27.3

18

10.5

25

6.0

11

6.4

80 19.1

36

20.9

12

2.9

5

2.9

26

6.2

10

5.8

24

5.7

5

2.9

Journal of Japanese Management Vo.5, No.1, November 2020

the cities in 2014. Here, two-sample tests for comparing
proportions for number 3, “Results of evaluations areunclear despite the burdensome evaluation activities,”
are conducted. The population ratio of the cities isgreater than that of towns and villages, statisticallysignificant at the 1% level. The differences between thecity and smaller municipalities suggest that the public
and the applicability to specific programs were relatively
less important problems and applicability to internalfinances and lack of a standard method were relatively
more important problems in the smaller municipalities.

ISSN 2189-9592

employees understand the method. In addition,evidence-based policymaking systems, which are
attracting attention in Japan, sometimes incorporate thelogic model method as a component (as is the case in
Hiroshima Prefecture).
One important finding was that the smaller
municipalities were relatively less interested in
conducting government evaluations because of theirlimited resources. Fiscal constraints tend to limit the
number of public officials in small municipalities, andthose officials tend to lack the expertise needed to
conduct evaluations. Thus, officials in relatively small
municipalities need focused training to obtain the skills
necessary to implement evaluations.
One of the major limitations of this study is that it
took four years to write this paper in English after thesurvey conducted in 2015 and the conference
presentation in the United States in 2016, partly
because of the author’s intra-university transfer. Hence,
this study was unable to capture the changes in these
five years. The MIC report published in June 2017,
which examined the situation in each municipality as of
October 1, 2016, is the latest result of the government’s
research. According to this research, the number of cities
and Tokyo’s 23 special wards implementing
government evaluations increased slightly from 82.8%
in 2013 to 83.5% in 2016. By contrast, the percentage oftowns and villages increased by four percentage points
from 34.9% in 2013 to 38.9% in 2016, but it is still below
40%.
The report of the MIC survey published in 2017
examines why no government evaluation was planned
to be introduced. The small size of the local government
and its difficulty in organizing staff to implement theevaluation (Taisei ga Torenai) was the most common
answer (61.0%), followed by that no evaluation method
and criteria have been established (31.4%). These results
are in line with the findings of this study. In the recent
literature, two studies dealing with municipal(7) Conclusion

This study revealed the characteristics andproblems of Gyosei Hyoka in Japanese municipalities.
The dominant method was Jimujigyo Hyoka (Crosssectional Program Evaluation System), and more than
80% of the municipalities that had implemented
evaluations were using Jimujigyo Hyoka. Cities tended
to implement evaluations first, and the survey datasuggested differences between cities and smaller
municipalities in terms of implementation andchallenges. Some of the differences found were withrespect to the implementation rates, reasons for
implementation, and the types of problems they wereencountering. Thus, smaller municipalities needdifferent approaches towards evaluation. Instead of
Jimujigyo Hyoka, which significantly demands workrequiring specialized human resources, the logic model
method may be effective in smaller municipalities forevaluating outcomes and results because it needs fewer
resources to accomplish evaluation activities. The logic
model method differs from Jimujigyo Hyoka in that it
does not cover all the programs in principle, but rather
concentrates on a specific program. This method wasincorporated into the national training in policy
evaluation by the MIC from 2013 to 2015. Officers fromtown and village governments are included in the
training and an increasing number of town and village
47

Journal of Japanese Management Vo.5, No.1, November 2020

government evaluations published after 2017 haveincluded the word restructuring (Sai-kochiku) in theirtitles. Future work should aim to research this topic
again by reviewing and replacing some of the question
items used in this survey to understand the current
trend of municipalities abolishing, reintroducing, andsignificantly revising government evaluation systems.

ISSN 2189-9592

http://doi.org/10.1111/1540-6210.00322
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Donaldson, S. I., Gooler, L. E., & Scriven, M. (2002).
Strategies for managing evaluation anxiety: Toward a

Acknowledgements

psychology of program evaluation. American Journal of

Funding from an affiliated institution (grants foryoung researchers, Hiroshima University) supported
this study. A version of this article, titled “Government
Evaluations: Tailoring Evaluations for Public
Organizations and Evaluation Fatigue,” was previously
presented at the American Evaluation Association
annual meeting, “Evaluation 2016” in Atlanta, GA, on
October 28, 2016. I am grateful to the session chair andparticipants for their helpful comments.

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261–273.

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(Received: July 3, 2020)(Accepted: October 17, 2020)

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Journal of Japanese Management Vo.5, No.1, November 2020

ISSN 2189-9592

Clarification of characteristics required for cost information:
Building a framework of “Cost information quality”
Keita Iwasawa

Graduate School of Business and Commerce, Keio University, Japan
Japan Cost Accounting Association (JCAA)
Email: atk.m@keio.jp
Abstract
This study clarifies and deciphers characteristics required for cost information. It is not
sufficiently clear why characteristics other than accuracy are required, despite theirimportance being suggested. It is because previous studies have focused mainly on accuracy,and empirical evidence on other characteristics is limited. To explore the requirements of cost
information in the usage phase, this study building a framework of “Cost information quality”
using the concept of information quality from information systems theory. Concretely, basedon Wang and Strong (1996), cost information quality is assumed to composed of four quality
dimensions: intrinsic, accessibility, representation, and context. A field study presented inthis paper confirms that multiple characteristics are required in the case organizations.
Moreover, required characteristics depend on the purpose of use and organizational contexts.
As the main contribution, this paper demonstrates the existence of a variety of characteristics
required for cost information. This study confirms that the accuracy is intentionally reduced
to ensure usefulness of information due to a trade-off with other characteristics. Therefore,
the study highlights the importance to provide high quality cost information with various
characteristics including but not limited to accuracy.
Keywords
Cost information, Cost accounting, Information quality, Accounting information, Field study(1) INTRODUCTION
The purpose of this study is to clarify
and decipher the characteristics required forcost information. Companies use cost
information for various purposes, andprevious studies discussed its usefulness.
Recent studies have focused on overhead
cost allocation and accuracy (Arai et al.,2010; Brierley, 2008). Accuracy of cost
information is the realistic reflection ofmanagement and production costs. Accurate

cost information can be provided only bysophisticated costing that appropriately
maps daily activities and causal flows(Horngeren et al., 2015; Kataoka 2011).
Since traditional costing is criticized forbeing less accurate and encouraging
erroneous decision making, previous studies
elucidated factors improving accuracy andimpacts of accurate costing (Kataoka, 2011).
Activity-Based Costing (ABC) intended to
improve accuracy through a greater number

51

Journal of Japanese Management Vo.5, No.1, November 2020

ISSN 2189-9592

of activity cost centers (Drury, 2015, p.311),
became one of the main topics inmanagement accounting research in the
1990s. However, ABC is not widely used inpractice, and the results of studies on theeffects of ABC are not consist (Gosselin,2006).
However, some studies demonstrated
the importance of characteristics other thanaccuracy. Brierley (2008) found thatcharacteristics such as understandability
and completeness are required, suggesting aproblem in previous studies focused on
accuracy. Pizzini (2006) found that the levelof detail and frequency of reporting affected
the usefulness of cost information. Other
studies suggested the importance of rapidity
and relevance.
Previous studies have some limitations.
First, we have little known how and why
characteristics other than accuracy are
required. As previous research has been
focused on accuracy, empirical evidence onother characteristics is limited. Second, instudies that focused on characteristics otherthan accuracy, such as Brierley (2008), there
is no clear understanding of thecharacteristics required for cost information
becausetherelationshipbetweencharacteristics of the cost information is
unclear. Some characteristics, including
completeness and detail or relevance anddecision usefulness, may have inclusive or
causal relationships. However, since studies
based on various theories and used several
dependent variables, it is difficult toorganize the relationships between thecharacteristics discussed in previous studies.
Additionally, previous studies focused on
specific characteristics independently, but it
is necessary to clarify the relationshipbetween these characteristics, as there may
be cases where characteristics are required
simultaneously. Therefore, we should clarify

empirically the characteristics required for
cost
information
and
why
those
characteristics are required, based on aframework including multiple information
characteristics.
This study achieves this researchquestion through two steps. First, this study
builds a research framework based on
information quality (Section 2), whichmeasures conformity of information withrequirements. Previous studies clarify thecharacteristics required of management
information. This framework allows toorganize and investigate a variety ofcharacteristics. Second, this study conductsa field study (Section 4) and empiricallyconfirms the characteristics required for cost
information and their determinants (Section
5).

Although Wang and Strong (1996) describe
it as "data quality," we discuss it as"information quality" in this study.
According to Sekiguchi (2013, pp.28-39),
information is the addition of knowledge andmeaning to data. Therefore, in Wang andStrong (1996), information corresponds todata, because it includes characteristics
related to knowledge and meaning, such asease of understanding. They later use theterminology of information quality (Lee et al.,2002); therefore, there is no problem.

(2) BUILDING A FRAMEWORK
1. Information quality
According to Lee et al. (2002),
Sekiguchi (2013), and Yakuwa (2010),
information quality is defined as "fitness foruse" and means the degree to which
management information provided isconsistent with requirements. The technicalmodel, which had received a lot of attention
in information systems theory, could notshow what useful management informationis, and researchers realized the importanceof other aspects of information accuracy andtechnics of management systems.
This study is based on Wang andStrong's (1996) information quality model1.
This model measured and evaluated
information quality by presenting thecharacteristics required for management
information in a comprehensive andsystematic manner. Concretely, it showedthat information quality has four quality
dimensions, and they can be measured andevaluated by the consistency of the152

Journal of Japanese Management Vo.5, No.1, November 2020

information used with the requirements forlower characteristics that make up eachquality dimension. For example, if the
management
information
meets
the
requirements
forconciseness
andunderstandability,
which
are
subcharacteristics of "representational quality
dimension," it can be evaluated as"representational quality is high." Thesefour quality dimensions will be discussed
later in subsection 3.

ISSN 2189-9592

information quality is assumed to consists ofnine sub-characteristics in four dimensions:intrinsic, accessibility, representational, andcontextual quality dimension2 (Table 1). To
fit this model to cost information research,each quality dimension and the implicationsof each sub-characteristic are discussed,
based on previous research on cost
information.
Table 1: Cost information quality, component
dimensions, and sub-characteristics

2. Modeling cost information
Wang and Strong’s (1996) model
contributes to the study of cost information
for two reasons. First, it is based on a largescale survey and careful statistical analysis;
therefore, its structural concepts arecomprehensive. Hence, using this model
provides a broad view of research on cost
information. This enables us to discovercharacteristics that have not received muchattention in cost information research.
Second, the systematic nature of themodel overcomes the unclear relationships
between characteristics presented inprevious studies, as they did not have aunified framework and developed in various
ways. This model organizes characteristics
required of information in four dimensions,making it possible to organize the findings ofprevious studies.

Sub-characteristics

Examples of Prior Research

Intrinsic quality dimension
accuracy
objectivity

ABC studies and manyothers.
Myers et al. (2017)

Accessibility quality dimension
ease of access－ease of operation－

Representational quality dimension
understandability

Brierley (2008)

concisenessCardinaels (2008)

Contextual quality dimension
relevance

Mia and Chenhall (1994)

completenessPizzini (2006)

timeliness

Chenhall and Morris (1986)

3.1 Intrinsic quality dimension
The intrinsic quality dimension, i.e., thenumerical dimension of information, isassumed to be composed of two subcharacteristics: accuracy and objectivity.
The accuracy of cost information means
the values of cost information realisticallyreflect the actual situation of management
and production. Some argue that inaccurate
cost information, based on the allocation
calculation that deviates from the actual
management situation, leads to erroneousdecision making (Dater and Gupta, 1994),
and its importance has been elucidated
mainly in ABC studies.

3. Cost information quality and its
component
dimensions
andsubcharacteristics
In this study, the concept of information
quality is used to measure the conformity torequirements of cost information in theusage phase, which is called "costinformation quality." High quality cost
information meets user requirements.
Furthermore, this study relies on Wangand Strong's (1996) information quality
model to elucidate the characteristics that
constitute cost information quality. Cost
Among the sub-characteristics included in
Wang and Strong (1996), reliability,
reputation, value-added, interpretability,
consistency, and safety are excluded, as they

are judged to be of little relevance in cost
information or are encompassed by othersub-characteristics.

2

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Journal of Japanese Management Vo.5, No.1, November 2020

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The objectivity of cost informationmeans that cost data are not biased andarbitrary.
Arbitraryallocations
andsubjective estimates reduce the reliability of
cost information. Myers et al. (2017) foundthat informal cost information without theapproval and monitoring of the IT
department is not used often, even if theresults of the calculations are the same due
to low objectivity and verifiability.

Merchant and Shields, 1993).
The conciseness of cost informationmeans the format of cost information isstraightforwardly organized. Cardinaels(2008) showed that providing concise
graphical cost information based on users'
accounting knowledge improved decision
making. Moreover, accounting information
overload reduces the quality of decision
making (Chewning and Harrell, 1990).

3.2 Accessibility quality dimension
Accessibility quality dimension, i.e., thedimension related to the convenience ofusing the information, consists of ease ofaccess and ease of operation. Ease of accessof cost information means users can retrieve
information without hassle. For example,
the usefulness of the cost information to
make managerial decisions is low if
managers must go through complicatedprocedures to obtain information. Managers
are not willing to use the cost information ifsuch complicated procedures are present.
Ease of operation of cost informationmeans ease of process such as aggregation,
extraction, and transfer of cost information.
For example, when making decisions,managers need to divide costs into relevant
and sunk costs, or to classify costs. Therefore,
when cost information is difficult toaggregate, the operability of the cost
information is poor, and its usefulness isremarkably low.

3.4 Contextual quality dimension
The contextual quality dimension, i.e.,the dimension of fit with the user's task,
consists of relevance, completeness, andtimeliness.
The relevance of cost information meansa suitable and sufficient range of
information is provided for users. The
importance of reporting an appropriate
range of cost information for users has been
demonstrated by previous studies. Different
ranges of cost information are not useful,because ranges in cost information haveappropriate accounting units and periods foreach user. The scope of accounting
information determines the usefulness of theinformation (Mia and Chenhall, 1994).
The
completeness
of
the
cost
information means the required data,
without omission, are present in the cost
information. Even if the relevance isadequate, if the comprehensiveness anddetail of the information is not, usefulness islow. For example, Pizzini (2006) shows thatdetailed
costinformation
enhancesmanagers’ decision making, and Brilery(2008) found that many management
accountants consider it important tocalculate all cost items of product costs
comprehensively.
The timeliness of cost informationmeans cost information is available whenappropriate for users. The importance oftimeliness of accounting information has
been noted by previous studies (Gullberg,2016) and is defined by appropriate
reporting frequency and speed for users(ChenhallandMorris,1986).
The
importance of timeliness has been
empirically elucidated (Pizzini, 2006), and

3.3 Representational quality dimension
Representational quality dimension, i.e.,the dimension relating to the format of
information, consists of understandability
and conciseness.
Understandability of cost informationmeans the presentation style is such thatusers can easily comprehend the meaning
and background from cost information.
Brierley(2008)
demonstratedtheimportance of understandability, and somestudies showed that its usefulness isenhanced by setting up cost drivers and cost
pools
that
are
understandablefor
manufacturing managers who may not be sofamiliar with accounting (Hiromoto, 1988;

54

Journal of Japanese Management Vo.5, No.1, November 2020

the provision of cost information withappropriate frequency and speed for theuser's task is required.

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heterogeneity of factors that must be
considered in decision making" (Tani et al.
1993, p.76). Previous studies focused on thediversity of products and services handled
and of manufacturing technologies andprocesses. In such an environment, cost
items and objects of costing become diverseas the management objects, such asprocesses, divisions, products, and services,
become complex. Therefore, detailed anddiverse cost information is essential.

4.
Provisions
bydecision-making
environment and purpose of use
To elucidate why various characteristics
of cost information are required, this study
employs the decision-making environment
and purpose of use as determinants of thecost information quality from previous
studies.

4.2 Cost information quality and purpose ofuse
There is a close relationship between
quality of cost information and purpose ofuse, leading to the maxim, "different costs
for different purposes." Previous studies on
costing showed that accuracy requirements
and allocation elaborations vary dependingon the purpose (Schoute, 2009). Research on
information quality indicated that not all
information characteristics are equallyrequired in all situations (Sekiguchi, 2013).
The importance of each information
characteristic varies depending on the
purpose of use.
Therefore, this study assumes that therequirements for the quality dimensions,which constitute cost information quality,
differ depending on the purpose of use.
Following Drury (2015) and Horngren etal. (2015), this study divides the purposes ofuse into management decision-making
purposes and planning and control (P&C)
purposes. The management decision-making
purpose includes decisions on pricing andproduct mix and decision on selfmanufacturing or subcontracting. The P&C
purpose includes cost management, cost
improvement, review of production plan, andperformance evaluation.

4.1 Cost information quality and decisionmaking environment
Previous studies on cost informationand information quality suggest a close
relationship between the decision-making
environment and cost information quality.
The uncertainty and complexity of thedecision-making environment lead toaccuracy requirements and elaboration of
allocations (Abernethy et al., 2000; Al-Omiri
and Drury, 2007; Watanabe, 2000.). For
information quality, studies showed that thequality of management information differs
depending on the organization's situation,such as the decision-making environment(Sekiguchi, 2013; Petter et al., 2013).
Therefore, this study assumes that therequirements for and actual levels of thequality dimensions, which constitute cost
information quality, differ depending on theuncertainty and complexity of the decisionmaking environment.
Uncertainty in the decision-making
environment is defined as "the variability offactors that must be taken into account indecision making and the uncertainty of
information about those factors" (Tani et al.
1993, p.76). Previous studies have focused on
the degree of market competition, thefrequency of new product development, andthe difficulty of predicting the market
environment. In such an environment, theimportance of cost information increases due
to difficulty in forecasting demand, highopacity of production plans and costestimates, and large cost fluctuations.
Complexity in the decision-making
environment is defined as "the number and

5. Research framework and researchquestionAs the purpose of this study is to clarify
the characteristics required of cost
information and the reasons, the concept of
information quality is used to explore
conformity with requirements of cost
information in the usage phase, defined as55

Journal of Japanese Management Vo.5, No.1, November 2020

"cost information quality." Based on Wangand Strong (1996), cost information quality
is assumed to constitute of four quality
dimensions:intrinsic,
accessibility,
representation, and context. The decisionmaking environment and the purpose of use(management decision-making purpose andP&C purpose) affect the requirements forcost information quality and levels of therequirements.
However, these discussions are justassumptions. It is unclear how eachcharacteristic is affected by the decisionmaking environment and the purpose of use.
Therefore, this study empirically explores
the research framework and addresses thefollowing research questions (RQ).

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companies agreeing to be interviewed
reaches three or four. We sent letters to 30
companies (7 companies responded, and 3companies cooperated).
The interviewees were managers in theaccounting department, as they are familiar
with cost accounting and the preparation
and reporting of information, and they havecontact with many users of cost informationand know the purposes and requirements of
the information. When possible, plant
managers, who are users of cost information,
were
interviewed
toconfirmnodiscrepancies between perceptions of users
and providers of the information. We also
visited a factory of Company A and observed
the meeting. Moreover, we observed internalreporting documents on costs at all firms.

RQ: How are the four quality dimensions
constituting
cost
information
quality affected by the decisionmaking environment and the
purpose of use?

Table 2: Field study Overview
CompanyA(3) RESEARCH DESIGN
We conducted a field study with semistructured interviews. A field study is usefulfor elucidating RQs such as "why and how"(Yin, 2002) and allows this study to explore
complex relationships for multiple variables.
The research sites are large companies
in the materials industry in Japan toinvestigate the use of cost information foreach purpose of use, including pricedetermination. The use of cost informationin price determination is limited to finishedproduct manufacturers, as they have strong
pricing power in the market. Therefore, we
focus on the materials industry, where pricedetermination is based on price negotiations
between companies.
Three companies that agreed to beinterviewed were selected as the researchsites. We randomly sent out research request
letters to firms matched the above conditions.
In order to avoid increasing excessively inthe number of companies agreeing to beinterviewed in a short period, we divide thecandidate companies into groups of about 10
companies and send them out at an intervalof about two weeks until the number ofType ofindustry

Plastic productmanufacturing

B

Steel industryC

Non-ferrous
metal
manufacturingindustry

Interviewees
GeneralManager,
Accounting
Department
Plant
manager
GeneralManager,
Accounting
Department
Manager,
Accounting
Department

Date2016/11/8
2017/5/19
2018/8/23
2016/11/21
2017/8/18
2016/11/25
2017/6/26

Table 2 shows an overview of the fieldstudies. All interviews were conducted in a
conference room in the headquarters
building, and each interview lasted 60 to 90
minutes. To enhance the objectivity of
research, more than one researcher otherthan the author participated in theinterviews. In addition, all contents of thispaper were confirmed by interviewees toensure that there were no factual errors, andallinterviews
wererecorded
withpermission and later transcribed in writing.
(4) FIELD STUDIESThe results of the field studies showedthat the requirements for each quality
dimension vary according to the purpose ofuse (Table 3), and that several quality
dimensions are eliminated depending on the56

Journal of Japanese Management Vo.5, No.1, November 2020

decision-making environment, making it
difficult to respond to the requirements.
In this section, we will refer to eachquality dimension as "high quality" when
the characteristics of the information
provided meet the requirements from theusers, and "low quality" when they do not.
For example, with respect to the intrinsic
quality dimension, "intrinsic quality is high"is used when the cost information provided
meets the requirements for accuracy andobjectivity, which are sub-characteristics of
intrinsic quality dimension.

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uncertainty. Since the steel industry is anoligopoly, competition in the market is nothigh, and demand is predictable.
The complexity of the decision-making
environment is considered to be low. The
average number of individual products
handled by each division is about 10.
Product manufacturing is completed in one
plant.
As for the purpose of use, each operating
division oversees management decisionmaking and uses the information for pricedetermination, profitability confirmation,and product mix decisions. The purpose of
P&C is the same as in Company A and isreported to officers and to each division andplant.

1. The decision-making environment and the
purpose of use
1.1 Company A: High Uncertainty and High
Complexity
Company
A'sdecision-making
environment is considered to be highly
uncertain. As the company belongs to thechemical industry, it is under intensecompetition for new technologies andmarkets, and new products are developed
frequently. It is difficult to predict demand,and most materials are imported. Thus, theenvironment is subject to drastic changes in
raw material costs.
The complexity of the decision-making
environment is considered to be high. The
number of products per plant exceeds 20,000,
and manufacturing technologies are diverse.
Furthermore, the manufacturing process is
global, and the products are manufactured
through complex processes, such astransporting partially finished products tooverseas factories for completion.
The Business Strategy Office, a crossdivisional departmental unit, oversees
management decision-making, and cost
information is used for determining the priceof new products and the product mix, anddeciding on make or buy. For P&C purpose,the information is reported monthly to
executives and plant managers for review toevaluate management and production plans.

1.3 Company C: High Uncertainty and Low
Complexity
The decision-making environment for
Company C is considered to be highly
uncertain. The non-ferrous metals market
has many substitute products and many
innovations in production and processing
technology, making it difficult to predict
demand. Furthermore, the industry depends
on imports of raw materials, which areheavily influenced by energy prices andexchange rates, resulting in large pricefluctuations.
The complexity of the decision-making
environment is considered to be low. The
diversity of products produced in one factoryis low, because each division has its own
factory. The manufacturing process does notcross over multiple plants.
The purpose of use is the same as for
Companies A and B. Company C has
operating divisions systematized by product,and each division oversees management
decision making. The purpose of P&C isreported monthly to executives, operating
divisions, and plants managers.
2. Intrinsic quality dimension (accuracy andobjectivity)
The intrinsic quality dimension isrequired for both purposes as the followinginterviewee said. For the P&C purpose,managers analyze the cost fluctuation

1.2 Company B: Low Uncertainty and Low
Complexity
Company
B'sdecision-making
environment is considered to be low

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Journal of Japanese Management Vo.5, No.1, November 2020

performanceaccurately.
Therefore,
understanding the results of the previous
month as accurately as possible is necessary.
Moreover, accuracy and objectivity are
required because cost information is related
to performance evaluation. For managers,
accurate and objective cost information isrequired to make decisions accurately.

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Formanagement
decision-making
purposes, Company A uses cost information
with low intrinsic quality, due to theuncertain decision-making environment. As
the following interviewee said, because it isdifficult to predict demand and there is alarge variation in inventory and capacity
utilization, the actual cost of products ranges
widely. As the actual cost includes muchnoise, the operability (utilization quality
dimension) is poor for users, and they may
make wrong decisions. For example, if thesales department is provided temporarily
low cost information because of inventory,
they may reduce prices more than necessary.
In response, for management decision
making, Company A uses “budgetary cost,”
which estimates the cost with lower intrinsic
quality. The budgetary cost is formulated
together with the budget annually. This isbased on the actual cost in the medium term
and is calculated by breaking down the total
production volume for each product bycomparing it with the sales plan and the
production plan without noise. Once several
years, the estimates made at the time offormulation deviate from the actual
situation, making it impossible to use
budgeted costs.

“There is no doubt that cost information isrequired to be as accurate as possible. If it's
not, sometimes decisions are madeincorrectly. (…). It has also impact oninternal performance evaluations andpersonnel evaluations.” (Company A,
Accounting Manager)
However, the intrinsic quality decreases
for various reasons at each company, each ofwhich is described below.
2.1 Company A: Dilemma due to thedecision-making environment
In Company A, intrinsic quality of thecost information varies according to purposeof use. For P&C purposes in the factories,
they provided cost information with highintrinsic quality to meet the requirementsfrom the users. Due to environment
complexity, where products are diverse,
indirect cost allocation is complex. Therefore,
by discussing and reviewing the cost drivers
with managers every year, cost informationis accurate and objective, in line with the
production reality.
However, also for P&C purposes, theintrinsic quality of the cost information is
low for reports to executives, due to thecomplex decision-making environment ofCompany A. The production process of one
product spans the globe, and transfer pricing
is involved in the cost information between
processes. Therefore, it is difficult to monitor
the breakdown of product costs throughout
the manufacturing process. The accounting
department simply simulates the cost
structure. Although such a decrease inaccuracy is a practical problem, the pursuitof accuracy makes it difficult to achieve
timeliness (context quality dimension).

“The cost information includes the noise of
the time, for example, the data at the time ofa dramatic drop in operating rates, so if we
use the information as it is, we might end up
making a wrong decision. Then what iseasier to handle is the 'budgetary cost', so we
use it (for the purpose of management
decision-making in the Business Strategy
Office).” (Company A, Accounting Manager)

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Journal of Japanese Management Vo.5, No.1, November 2020

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Table 3. Purpose of use and quality dimensions for each company
Quality dimension

P&C

Managerial
decision-making

Intrinsic

Accessibility

Representational

Contextual

Company A

High / Low

－

High

High

Company B

High

－

High

High

Company C

High

－

High

High

Company A

Low

High

－

High

Company B

High

High

－

High

Company C

Low

High

－

High

“－” indicates no request
department, using material and actual costs
per process information provided by theaccounting department. Since the accuracy
and objectivity are low, they are encouraged
to check any changes in the situation withrespect to material and mold costs whenusing this information. Additionally, whenplants invest in equipment or changes inprocessing procedures, the structure of cost
generation changes significantly, and thesecosts may deviate from costs at the time ofdevelopment.
Intrinsic
quality
decreasesformanagement decision-making purposes, due
totheuncertain
decision-making
environment and the balance with theaccessibility quality dimension. For example,
if a salesperson wants to check the
profitability of a specific product when
making a price decision, it is difficult tomanipulate the actual cost with highintrinsic
qualitybecauseoflarge
fluctuations from time to time in theuncertain environment. Moreover, actual
cost information with high intrinsic quality
is aggregated for each product group.
Therefore, it is difficult to extract the cost
data related to a specific product, and theease of operation and accessibility is low.

2.2 Company B: High quality on both
purposes
In Company B, cost information withhigh intrinsic quality is provided for both
purposes. For P&C purposes, sales expenses
are allocated based on time spent on sales
activities for each product, providing highly
accurate cost information that is close toreality.
Intrinsic
qualityishighformanagement decision-making purposes. In
deciding the price, Company B is asked
frequently by buyers to lower the price.
Therefore, to the company calculates thecontribution profit of the product based on
the cost information with high intrinsic
quality and decides the appropriate selling
price, because the price cannot be changes
once established.
2.3 Company C: Low quality on management
decision-making purposes
In Company C, for P&C purposes,
information with high intrinsic quality is
used.
Highlyaccurate
actualcost
information shows each major machine andprocess in the factory, which is useful forreviewing the production plan and analyzing
results. Furthermore, the reports of theheads of business units and executives are
similar to those of Company A and B.
However,forthepurposeofmanagement decision making, they use cost
information with low intrinsic quality basedon the system called "individual product cost
system." In this system, the breakdown of
individual product costs is estimatedannually through a discussion among the
production control department, operating
divisions, and the information system“In our company, the actual costs forfinancial accounting (, which is highly
accurate,) are aggregated for several
product groups. When we talk about the
profitability of more detailed individual
products, though fabrication processes andmaterials are different, they are groupedand buried in the cost information, so they
are not useful for making decisions on
individual products. It is not possible toextract the breakdown data. (…). When we59

Journal of Japanese Management Vo.5, No.1, November 2020

want to improve the accuracy of eachproduct cost, it is not easy for us to calculate
the cost data of all products every month.
And for the sales department or operating
divisions, it is inconvenient to use highly
accurate cost information, which changes
every month, because they do not know
which cost data to use to make a decision,and their decisions may change. So, we use
cost information based on estimates.

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useful in price negotiations to decrease priceby reducing the number of times rollers areapplied.
4. Representational quality dimension(understandability and conciseness)
Representational quality dimension isrequired for P&C purposes in all companies.
To efficiently execute the PDCA (Plan-DoCheck-Action) cycle, cost fluctuations andtheir causes must be expressed in an easyto-understand format.

“ (Company C, Accounting Manager.)

3. Accessibility quality dimension (ease ofaccess and ease of operation)
Accessibility quality dimension isrequired for management decision-making
purposes in all companies. As the followinginterviewee said, this purpose requires cost
information that is easy to obtain andoperate because other departments use it on
an ad hoc basis.

“In the technical sense, the cost figures
are almost the same whoever calculate
them. What the company is looking for is
how we can find the problem and teachthem in easy-to-understand ways, when
there is something wrong with the figures.
If they say, ‘We have no idea what theaccounting department talking about,’
we're out of a job.” (Company B,
Accounting Manager.)“In fact, we spend a lot of effort to havepeople in our company understand themeaning of cost information. The
improvement will not be achieved unlessthey accept it.” (Company C, Accounting
Manager.)“When a decision must be made on

problems, there is no time to look for past
cost information, so they need the (cost)
information that can be handled
immediately when needed. Salespeople
and people in the division are busy, sothey do not take time and effort to search
information. They feel reluctant to checkit.” (Company B, Accounting Manager)

Therefore,
allcompanies
use
information with high representational
quality for P&C purposes. For example, in
the report to executives of Company A, thechange in cost of each product group and its
factors are briefly outlined. In executive
management meetings, cost informationneeds to be reported in a concise and easyto-understand format, since they needdiscuss improvement measures for the next
period based on various information, such as
sales and production. Moreover, Companies
B and C use graphs to visualize cost trends
and add explanatory notes about variablefactors, making cost information easier tounderstand.

Therefore,
allcompanies
use
information with high accessibility quality
for management decision-making purposes.
For instance, Company A uses the abovementioned "budgetary cost." By giving it at
the beginning of the year, users have the cost
information whenever they need it. In
addition, since noise in the cost is eliminatedin budgetary cost information, it is easy to
extract the appropriate values and is easy tooperate. Company C uses the cost
information based on the "Individual
Costing System," which is easy to operate
and obtain. The user can get the cost
information of individual products together
with the breakdown of material, processing,and transportation costs. This allows sales
staff to calculate cost and contribution profit
of individual products at any time. It is

5. Contextual quality dimension (relevance,completeness, and timeliness)
The contextual quality dimension isrequired for all purposes of use in all

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companies. The implications of the subcharacteristics vary depending on the
purpose of use. For example, with respect torelevance and completeness, for P&C
purposes in Company A's factory, it is usefulto report the costs in the factory in detail. It
is helpful in reviewing the production planby reporting the cost of materials input andlosses due to yield in detail. However,executive reports only report integrated
trends of each product group. Quick andfrequent reporting is appropriate for P&C
purposes,
whereasformanagement
decision-making purposes, the frequency ofreporting is annual, and quick reporting is
not required.
Therefore, each company uses cost
information with high contextual quality byreporting according to the user's task.

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decisions. In some cases, intrinsic quality is
low for various reasons; however, this is apractical
problem.
Therefore,
thedeterioration of intrinsic quality may lead towrong decisions.
The accessibility dimension is required
only for management decision-making
purposes, where information is easy toaccess and operate. Though for P&C
purposes, the accessibility dimension is not
required. Since cost information for P&C
purposes is provided in periodic (i.e.,monthly) reports, it does not need to beeasily obtained. As it is not necessary to
extract specific data from cost information,ease of operation is not important.
The representation quality dimension isrequired only for P&C purposes. To
implement the PDCA cycle, users must
understand and accept the meaning of cost
information to take actions. It is difficult tounderstand the meaning of accounting
information only by numerical data, thus itisessential
toenhancetheunderstandability and conciseness so thatmanagers know the background factors andevents, which affected costs. However, forthe purpose of managerial decision-making
with a specific intention to read the cost
information, there is little need to convey thefactors and events behind the figures.
The contextual quality dimension isrequired for both purposes of use. As the
maxim "different costs for different
purposes" suggests, the required cost range,level of detail, and timing vary depending on
the users’ department or position. It isuseless unless it provides cost information of
appropriate scope, level of detail and timing
for the user's task. Therefore, relevance,completeness, and timeliness are required.

“For example, the perspectives ofmanagement and factory production arecompletely different, so it is difficult toobserve them all in a uniform manner. We
do it while making good arrangements
according to the phases.” (Company A,
Accounting Manager)(５) DISCUSSION
The research question, "How are thefour quality dimensions that constitute cost
information quality affected by the decisionmaking environment and the purpose ofuse?" is examined based on the field study.
1. Purpose of use and cost information
qualityFormanagement
decision-making
purposes, intrinsic quality (accuracy andobjectivity), accessibility quality (ease ofaccess and ease of operation), and contextual
quality (relevance, completeness, andtimeliness) dimensions are required, while
for P&C purposes, intrinsic quality,
representational
quality(easeofunderstanding and brevity), and contextual
quality dimensions are required.
The intrinsic quality dimension isrequired for both purposes. In this study, as
indicated in previous studies, accuracy andobjectivity are important to make correct

2. Decision-making environment and cost
information quality
The
decision-making
environment
makes it difficult to meet requirements by
forcing
trade-offs
betweenqualitydimensions. First, high environmental
uncertainty creates a trade-off between
accessibility and intrinsic quality. When theenvironmental uncertainty is high, it is61

Journal of Japanese Management Vo.5, No.1, November 2020

difficult to predict demand, and changes in
production plans occur often, leading tofluctuations in utilization rates andinventories and increased noise in costs.
Hence, if the intrinsic quality is increased,
cost information including noise will be
provided, which may lead to poor operability
and wrong decisions. If the accessibility
quality is increased, the intrinsic quality will
decrease, leading to use information thatdeviates from the actual management
situation, which may lead to erroneousdecisions.
Second, a complex decision-making
environment creates a trade-off between
contextual and intrinsic quality. With
respect to relevance, if the decision-making
environment is complex, a problem of
indirect cost allocation may occur inaggregating the narrow area costs, such as
per product, thus reducing intrinsic quality.
However, in aggregating costs over a widearea, such as per business, it is difficult toaccurately and objectively aggregate costs
across the entire production process (Yasui,2012) because of difficulty of intervening
transfer prices and of headquarters' costs
allocation. Conversely, if the intrinsic
quality dimension is prioritized, it becomesdifficult to provide cost information that iscompatible with the user's task, decreasing
the contextual quality.

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on costing. This study confirmed that
accuracy intentionally reduced to ensure
usefulness of the information because of a
trade-off with other characteristics. Hence,
accuracy is one of many characteristics
required of cost information. Therefore, forutilization at various levels, it is importantto provide high quality cost information thatconsiders various characteristics.
Additionally, this study contributes toresearch that focused on characteristics
other than accuracy. Using knowledge ofmanagement information, this study
summarized the characteristics indicated invarious previous studies and showed thatthe requirements for these characteristics
vary depending on the purpose of use,
including where the decision-making
environment of an organization forces thesacrifice of characteristics. Furthermore,this study demonstrated the importance ofcharacteristics, such as ease of access andoperation, which were overlooked inprevious studies.
This study has some limitations. Accessto information users was insufficient.
Assuming that middle managers in theaccounting department were most suitable,
they were chosen as the focus. Yet, further
findings may have been obtained bysurveying the users of information more
widely. In addition, a limitation stemmingfrom narrowing the determinants. Although
this study focused on the uncertainty andcomplexityofthedecision-making
environment, in which previous researchsuggested a close relationship, otherimportant contextual factors may exist.
Moreover, we could not find case with low
uncertainty as a research site. We would liketo investigate the case, if possible, andinclude it in the discussion.
Despitetheselimitations,theperspective of “cost information quality”
provides important suggestions for the
research on cost information with respect tothe existence of a variety of characteristics.
Future research should elucidate the impact
of cost information quality and develop an
excellent practical theory to enhance eachquality dimension.

(6) CONCLUSION
This study clarifies and decipherscharacteristics required for cost information.
Various properties of cost information wereassumed based on Wang and Strong’s (1996)
information quality model. The importanceof the characteristics was confirmed throughfield studies. This study showed that therequired characteristics of cost informationdiffered depending on the purpose of use,
and the level of these characteristics differeddependingonthedecision-making
environment.
The main contribution of this study is toshow the existence of a variety ofcharacteristics required for cost information,using a more extending concept. Thesefindings give a new perspective to research

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Journal of Japanese Management Vo.5, No.1, November 2020

Organizations
Acknowledgement
This paper’ original version won theBest Paper Award at the Japan Cost
Accounting Association (JCAA) and was
published in this journal with therecommendation of the president. The
author would like to thank the president of
JCAA, and two anonymous reviewers of
Journal of Japanese Management. This
paper was supported by JSPS KAKENHI（JP18J22434）.

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and Society 15 (6),pp.527–542.
Datar, S. and M. Gupta. (1994) Aggregation,
specification and measurement errors in
product costing. The Accounting Review
69 (4), pp.567-591.
Drury, C. (2015) Cost and Management
Accounting 8th Edition. Cengage
Learning EMEA.
Gosselin, M. (2006) A review of ActivityBased
Costing:
Technique,implementation, and consequences.

Handbooks of Management Accounting
Research 2, pp.641–671.

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(Received: July 13, 2020)(Accepted: October 17, 2020)64

Publisher: JFMRA
November 2020