Discussion Paper No.375

The effect of management practices on the performance ofbus enterprises
Kazuyasu1KAWASAKI
Chuo University
Tomohiko INUI
Research Institute of Economy, Trade and Industry and
Gakushuin University
Tsutomu MIYAGAWA
Research Institute of Economy, Trade and Industry and
Gakushuin University

September

2022

INSTITUTE OF ECONOMIC RESEARCH
Chuo University
Tokyo, Japan

The effect of management practices on the performance of bus enterprises1
Kazuyasu KAWASAKI
Chuo University
Tomohiko INUI
Research Institute of Economy, Trade and Industry and Gakushuin University
Tsutomu MIYAGAWA
Research Institute of Economy, Trade and Industry and Gakushuin University

Abstract
Bloom and Van Reenen (2007) examined the relationship between firm management
practices and performance, and demonstrated that management scores had a positive impact
on firm performance. While they focus on the impact of firm management practices on its
performance in the manufacturing sector, we examine how firm management practices are
related to its performance in the bus industry in Japan, where both private and publiccompanies exist, and these firms are regulated by the government.
We find that public companies have better management practices than private companies.
The gross output index is taken as the dependent variable with a significant coefficient of
the management practice score. However, if the dependent variable is a value-added index,
no significant coefficient is obtained. Because the bus industry is regulated, they cannot
expect to increase their profits by providing better services. Finally, we find thatorganizational management practices are more positively related to the firm performance
than are human resource management practices.

Keywords: Management practice, public service, Public Private Partnership, privatization
JEL classification: R4, H4, D2

1This paper is the revised version of “The effect of management practices on the performance of bus
companies” (in Japanese) (RIETI Discussion Paper Series 19-J-051). Originally, this study is conducted
as a part of the “Research on Productivity-improving Capital Investments” project undertaken at the
Research Institute of Economy, Trade, and Industry (RIETI). The authors are grateful for helpfulcomments and suggestions by Makoto Yano (RIETI), Masayuki Morikawa (RIETI), Kyoji Fukao(Hitotsubashi University) and Discussion Paper seminar participants at RIETI. We also thank helpfulcomments and suggestions by Shigemichi Kanasaka (Konan University), Daisuke Fujii (Tokyo College ofTransport Study), and participants at the Spring Conference of the Japan Economic Association in 2021
and JEPA 2022. Kawasaki acknowledges the financial support from the Japan Society for the Promotionof Science's Grant-in-Aid for Scientific Research (No. 17K03715) and Chuo University Grant for Special
Research. We would like to thank Editage (www.editage.com) for English language editing.

11. Introduction
Since Bloom and Van Reenen (2007) first showed that firm management practices are positively related
to firm performance, research on the relationship between firm management and performance hasdeveloped greatly. First, they extend their study to not only advanced countries but also the developmentof the country, as in Bloom and Van Reenen (2010), because their pioneering work focused on the US andmain European countries, such as the UK, France, and Germany. Second, they also analyze the service
sector because their first study focused on the manufacturing firms. However, as Morikawa (2016, 2018)
pointed out, it is difficult to measure output and value added in the service sector because in the service
sector, the quality of the services offered differs greatly. As a result, in the field of medical care services,performance is measured by factors such as mortality among emergency patients and during emergency
surgery and the length of hospital waiting lists (Bloom, Propper, Seiler, and Van Reenen, 2015). In the caseof educational services, performance is measured by factors such as students’ test scores, grade point
average, and school evaluation (Bloom, Lemos, Sadun, and Van Reenen, 2015).
Considering both the manufacturing and service sectors in Japan and South Korea, Lee, Miyagawa, Kim,
and Edamura (2016) calculated the management practice scores of Japanese and Korean firms by applying
the method developed by Bloom and Van Reenen (2007) and examined the relationship with firm
performance. In their study, service sector performance was measured in the same manner as manufacturing,with nominal output (sales value) adjusted using an industry-level deflator, but the quality of the service
was by no means adequately considered.
Based on previous studies on management practices, our study focuses on the relationship between
firm performance, considering several outcome measures in addition to standard output and value-added
measures, and its management practices in a specific service industry. This study analyzes this relationshipin the Japanese passenger bus business. The business differs from oft-analyzed manufacturing in three ways.
First, the “number of passengers” can be used as an indicator of the real performance of the business.
Second, like those in medical care and educational services, companies in the passenger bus business canbe both privately and publicly operated, making it possible to compare the management quality of these
two types of companies. Dealing with a sector with differing operational formats not only allows us toinvestigate whether differences in management quality depend on operational format, but also provides anopportunity to consider the quality of service after privatization2. The final factor is the existence of theregulations. Because passenger bus operators must run their businesses with due regard to road safety andalso receive subsidies from the government, they are subject to heavy regulations even if they belong to theprivate sector. Additionally, there is a licensing system for bus routes, and although participation is regulated,the determination of fares is also restricted. Bloom, Propper, Seiler, and Van Reenen (2015) and Bloom,

2

Inui, Ito, Miyagawa, and Sato (2017) conducted a survey into how improvement in the quality of management of
not-for-profit enterprises such as those in the public sector is linked to improvement in the quality of service.

2

Lemos, Sadun, and Van Reenen (2015) considered the relationship between management quality andservice quality in the health care and educational service sectors, which are also heavily regulated.
Therefore, we also intend to consider the issues of management quality and performance while controlling
for the existence of regulations.
We raise discussions from not only the viewpoint of productivity analysis, but also from the viewpointof social welfare policies, that is, the importance of bus transport policies in an aging society. As shown in
Section 3, the number of bus users has clearly declined since Japan’s period of high growth. However, given
the aging society, the use of buses as a means of everyday transport is likely to be reviewed amid increasing
concerns about elderly people driving themselves. In this case, because the elderly are the main users,
offering services that take full account of safety is likely to become important. Furthermore, we propose ahitherto unconsidered angle, in that our study deals with management practices as a means of improving
service quality.
The remainder of this paper is organized as follows. Section 2 presents a review of previous research on
management practices and quality improvements in such service sectors. Section 3 provides an overview
of the bus businesses in Japan. Our survey of management practices for bus operators is outlined in Section
4. In Section 5, we analyze the survey results. The analysis was broadly divided into two phases. First, there
is a comparison of the survey results for private- and public-sector companies and management practices
at metropolitan and local bus enterprises, which provides an overview of the characteristics of bus operators’
management practices. Second, using simple quantitative analysis, we investigate some features of therelationship between the evaluation of management practices (as obtained from the survey results) andvarious management performance indicators of bus enterprises. In the final section, strategic problems are
discussed, as well as a summary of the results of the analysis.

2. Literature review
Previous research on this topic has covered three fields. The first is related to the impact of management
practices and relevant investment on productivity. Bender, Bloom, Card, Van Reenen, and Wolter (2018)
investigated whether management practices affect productivity directly or via human capital, that is, via
managers and employees. Their analysis revealed that in addition to contributing directly to a rise in thelevel of a company’s total factor productivity (TFP), management practices also contribute to such a rise,as companies with excellent management practices employ excellent managers. Bloom, Sadun, and Van
Reenen (2012) investigated whether the delay in IT introduction and stagnation in the rate of TFP
improvement in Europe are attributable to the nature of management practices or to the wider economic
environment, such as the scale of the market in the US and Europe. They compared the impact of IT
investment on productivity in domestic companies and in U.S.-owned multinationals with a base in Europe.
Their analysis clarified that IT investment has a significant impact on productivity in US-owned
multinationals and in companies with US capital participation, suggesting that it is highly likely that3

management practices play an important role in ensuring that IT investment is effective.
The second is based on the management practices in the public service sector. While the studies
mentioned have far focused on manufacturing and the market economy, the studies below focus on theimpact of management practices in public-sector services, namely schools and hospitals. Bloom, Lemos,
Sadun, and Van Reenen (2015) analyzed the relationship between management practices and school
performance at 1,800 schools in the United Kingdom, Sweden, Canada, the United States, Germany, Italy,
Brazil, and India. Their research ascertained that pupils’ results are excellent at schools with excellent
management practices. Furthermore, they found that among government-run schools, management
practices were superior in schools, independent of local government control. Bloom, Propper, Seiler, and
Van Reenen (2015) found that in hospitals in the United Kingdom with excellent management practices; i)
medical treatment performance is strong with low patient mortality rates, for example; and ii) competition
between hospitals contributes to improvement in management practices.
The third field is an analysis of the impact of companies’ ownership format (i.e., whether they are in
the private or public sector) on their performance. Brown, Earle, and Telegdy (2006) analyzed the effect ofprivatization in Hungary, Romania, Russia, and Ukraine. They found that privatization contributed to an
improvement in TFP. Chen, Igami, Sawada, and Xiao (2018) analyzed the impact of privatization on TFP
while considering the impact of differentiation within the privatization policy of the Chinese government(i.e., that government involvement would continue for large-scale state enterprises, while small-scale state
enterprises would be privatized). Hence, their study also revealed that privatization contributes to an
improvement in TFP. Mizutani and Urakami’s (2003) research relates to the efficiency of the regularpassenger bus business in Japan, comparing privately operated and publicly operated bus businesses interms of the cost and wage functions. They found that the costs for publicly operated bus businesses were20.2% higher than those for privately operated bus businesses, even when controlling for various
operational conditions surrounding bus businesses. Furthermore, even after controlling for workers’ lengthof service, years in post, etc., they were 14.5% higher.
As outlined above, although there has been progress in research into firm performance, management
practices, and ownership formats, our study is the first to mix private- and public-sector companies and test
the relationship between management practices and firm performance in the heavily regulated market inwhich services are provided.

3. Overview of regular passenger bus business in JapanThe regular passenger bus business in Japan has faced declining demand over a long period but has
shown a sideways trend in recent years. The number of passengers carried approximately halved to 5.939
billion in 2004, peaking at 10.144 billion in 1968. The decline continued thereafter, and the figure has been
approximately 4.2 billion in recent years. There were both private- and public-sector operators, and there
were 2,192 private-sector operators and 25 public-sector operators in the financial year 2016, as shown in4

Table 1. Looking at their scale, the majority is small- and medium-sized operators with 30 or fewer buses
accounting for 83.8% of operators. The picture is similar when looking at the number of employees, with
74.9% of the operators having 30 or fewer employees.

Insert Table 1

Table 2 shows trends in the number of passengers carried by private- and public-sector operators with30 or more buses from 2013 to 2017 and their income and expenditure. The number of passengers carriedby public-sector operators and private-sector operators has trended at just above 900 million and around 3
billion, respectively. A comparison of the average number of passengers carried per operator shows that thefigure for private-sector operators was 13.53 million in financial year 2017, while that for public-sector
operators was around four times larger, at 51.89 million. The income is around 570 billion JPY for privatesector operators and just over 150 billion JPY for public-sector operators. Similar to the comparative
number of passengers carried, the income per public-sector operator is large at 8.6 billion JPY while it is
2.6 billion JPY per private-sector operator. A lot of companies, both private- and public-sector operators,
are operating in deficit, with the expenditure exceeding the income. The current profit/income ratio in thefinancial year 2017 is 96.1% for private-sector operators and is a little lower for public-sector operators at
94.1%. However, the ratio of recurring income to recurring expenses has improved since financial year
2013, having been 78.3% in the financial year 2000. As shown in Table 3, the majority of private- andpublic-sector operators are operating in the red and only 32.3% of all private-sector operators and 11.1% of
all public-sector operators are operating in the black in the financial year 2017.

Insert Table 2
Insert Table 3

Table 4-1 shows trends in income and costs per vehicle kilometer from the financial year 2013 to thefinancial year 2017 for private- and public-sector operators. The income per vehicle kilometer is improving
for both the operators and it rose from 381 to 409 JPY and from 606 to 654 JPY for the private and public
sector, respectively. Over the same period, the costs per vehicle kilometer also increased, rising from 397
to 426 JPY in the private sector and from 658 to 696 JPY in the public sector. When comparing the
breakdown of costs in the private and public sector, in the financial year 2018, in addition to labor costs per
vehicle kilometer in the public sector is 381 JPY, which is 55% higher than 246 JPY for the private sector
and miscellaneous “other” costs per vehicle kilometer in the public sector are 275 JPY, which is 89% higher
than 146 JPY for the private sector.
Table 4-2 shows the trends in income and costs per vehicle kilometer from 2013– 2017 for metropolitan

5and other (local) areas. As the table shows, income per vehicle kilometer is slightly above expenditure in
metropolitan areas, with operations in the black. When comparing income and costs per vehicle kilometerin the financial year 2017, although the income in metropolitan areas is 88% higher (593 JPY) than theincome for other areas (315 JPY), costs in metropolitan areas are 578 JPY compared to 386 JPY in otherareas, meaning that metropolitan costs are 58% higher than those for other areas. Furthermore, whenlooking at the current profit/income ratio, while for metropolitan operators shows a slight improvementfrom 101% in 2013 to 102% in 2017, that for the operators in other areas has deteriorated from 88% to 56%
over the same period.

Insert Table 4-1
Insert Table 4-2

4. Overview of the our survey
In this section, we explain the survey results on the management practices of passenger bus operators.

4.1. The aim of the survey, and the scoring method
First, we revise questionnaires of our survey developed by Bloom and Van Reenen (2007) and Lee,
Miyagawa, Kim, and Edamura (2016). Discussing with the Ministry of Land, Infrastructure, Transport, andTourism, the Japan Bus Association (Nihon Bus Association; NBA), and the Development Bank of Japan
Inc., we added or removed some questionnaires to fit our survey with the operations of the Japanese bus
companies.
Bloom and Van Reenen (2007) categorized their survey questions into the four category headings of“operations,” “target-setting,” “monitoring,” and “incentives” and developed a scoring system ofmanagement practices in the manufacturing firms. For each question, a judgment was given on the situation
at the company on a five-point scale ranging from (1) no structured management practice in place to (5)strong management practice in place, and the average score for each category was used in our empiricalanalysis.
In the “operations” category, surveyed companies are asked whether the latest production techniques andmanufacturing processes have been introduced and whether these have been rationalized or improved, forexample. In the “target-setting” category, they are asked about company-wide targets, targets for each placeof business, and the extent to which targets are shared among employees, etc. In the “monitoring” category,they are asked how key performance indicators are measured and managed, who monitors them, and how
are the results of monitoring are shared, etc. In the “incentives” category, they are asked about their response,
related to promotion, wage increases, or bonuses, to strong performance by employees and their responseto employees who perform badly, among other factors.
Lee, Miyagawa, Kim, and Edamura (2016) added an “organizational reform” category and conducted a6

survey via interviews. However, the evaluation in their survey was conducted on a four-point scale ranging
from 1 to 4.
Furthermore, based on the conditions currently surrounding the bus business, we added items related
to operational control, such as the introduction of smartcards and timetable reform, and deleted items typicalof manufacturing, such as technological innovation and items where monitoring of achievement was
unlikely to be frequent. This process resulted in fewer questions than Bloom and Van Reenen (2007) and
Lee, Miyagawa, Kim, and Edamura (2016), prompting us to combine the “target-setting” and “monitoring”
categories in our questionnaire.
We used the same four-grade evaluation as Lee, Miyagawa, Kim, and Edamura (2016) and added points
according to the “yes” or “no” reply to each question. Regarding categories such as “operations” and “target
management and monitoring,” we took the average value for the relevant questions as the category score.
Please note that the questions and scoring systems are provided in Appendix 2.

4.2. Summary of survey and responses
We conducted our survey in November 2018 by mailing 779 passenger bus operators who were membersof the Nihon Bus Association. Among these, 23 public enterprises were included in the study.
Valid responses were obtained from 132 firms, with a response rate of 16.9%. Among them, 15 were
public enterprises, representing a response rate of 65.2%. Furthermore, the TSR-van2 database from Tokyo
Shoko Research, Ltd. was used to fill in the gaps for companies that omitted financial data where possible.
Descriptive statistics of the results are presented in Tables 4-3 and 4-4.

Insert Table 4-3
Insert Table 4-4

5. Management practice and performance
In this section, we examine the relationship between bus operators’ performance and the management
practice scores derived from our survey results. The analysis can be broadly divided into two parts. First,
to provide an overview of the characteristics of bus operators’ management practices, we compare two
types of management scores: the first is private companies vs. public companies, and the second compares
companies operating in metropolitan areas and those in regional areas. Second, we investigate therelationship between management practice evaluations obtained from the survey results and various
management performance indicators using a simple empirical analysis.

75.1. Comparison of data distribution
We present the kernel density estimation results of the management practice scores derived from thesurvey results and their distribution. First, we estimated the overall management practice scores (obtainedby averaging all scores in each questionnaire) and average score for each category, as shown in Figure 5-1.
Insert Figure 5-1

Overall, the operators were clustered around two on the four-grade evaluation scale. As shown in Table 43, The average score was 2.19. This finding suggests that management in the bus industry is not necessarily
highly qualified. Looking at the individual categories, although the average score for “operations” is 2.09.
Because the distribution tail is thick when the score is higher, it is likely that many companies are engaged
in higher-level practice. An interesting category is “target and monitoring”. The distributions ofmanagement scores for the “target & monitoring” and “organization reform” have two peaks which meansthat there are two types of firms: one those with highly qualified management practices and the other withno monitoring mechanism. Regarding organizational reform, we find a similar distribution of scores to thatof the target and monitoring.
We undertook the same comparison for public- and private-sector enterprises. Table 5-1 shows thedescriptive statistics for public- and private-sector enterprises, and Figure 5-2 shows the kernel density
estimation results of the management practice scores for each category.
Insert Table 5-1
Insert Figure 5-2

Overall, the average for the public sector was 2.4 and that for the private sector was 2.16. Although thisdoes not seem to be a large difference, it can be seen from the distribution that more public sector operators
have high scores (i.e., engage in solid management practices). The data for the individual categories showed
special characteristics more clearly. In the “target & monitoring” category, many private-sector operators
do not engage in such practice at all, whereas the public-sector operators engage in such management
practices at a relatively high level. Although private enterprises have high management scores, the averagemanagement score in private enterprises is lower than that in public enterprises because private enterprises
have low scores. Especially, in the category of “target & monitoring” and “organizing reform,” public
sector’s peak is relatively high and private sector’s peak is relatively low.
We also undertook the same comparison for metropolitan and local operators; descriptive statistics areshown in Table 5-2, and Figure 5.3 shows the kernel density estimation of the relevant management
practice scores for each category. Here, metropolitan operators are those whose head offices are located in
the Tokyo area (Saitama Prefecture, Chiba Prefecture, Tokyo, and Kanagawa Prefecture), Nagoya area
(Gifu Prefecture, Aichi Prefecture, and Mie Prefecture), or Osaka area (Kyoto, Osaka, Hyogo Prefecture,
and Nara Prefecture), and operators whose head office is located in areas outside the metropolitan areas

8are deemed to be local operators.
Insert Table 5-2
Insert Figure 5-3

Overall, the management practice scores for metropolitan operators tended to be higher than those for
local operators. In the “target-setting and monitoring” category, polarization into two clear groups can beseen in terms of management practice scores among local operators, with some hardly engaging in suchpractices and some engaging at a high level. In the “organizational reform” category, we identified atendency for metropolitan operators to be relatively active and for local operators to be polarized in thiscategory.

5.2. Management practice score and firm performance
We conducted an empirical analysis to investigate the relationship between the management practicescores obtained from the questionnaire results and various management performance indicators for bus
operators. Following Lee, Miyagawa, Kim, and Edamura (2016), we selected variables suitable for the
analysis of bus operators.

y=

+

+

(1)

whereｙrepresents each variable expressing firm performance, MPS represents the relevant management
practice score, and X represents controlling variables.For ｙ , we used profit margin (operatingbalance/sales), bus profit margin (profit margin limited to bus operations), value-added (labor costs +recurring balance + depreciation), sales from bus operations, annual number of passengers carried/numberof drivers, and annual passenger kilometers/number of drivers. Profit margins and sales were chosen as
powerful indicators of a company’s financial performance. In addition to value-added, we used the annual
number of passengers carried per driver and annual passenger kilometers per driver to capture output as aperformance indicator. The data were obtained through a questionnaire survey. These and other control
variables were included in 2018.
Some bus operators only provide bus services, while others are involved in regional transport andprovide services such as taxis and rail transport. We restricted our analysis to operators who provided
financial information relating only to the bus business, and it should be noted that the number of data points
was therefore reduced. Regarding the number of data points in Table 4-4, there are only 93 data points forsales limited to passenger bus operations, whereas there are 101 sales data points. Generally, companies
involved in more than one business are large companies, even when they are local operators, and it should
be noted that their data has been reduced. Conversely, although whole-company data for such companies
was obtained, it is possible that the figures are greatly influenced by businesses other than buses. For thisreason, we decided to include capital scale (denoted as “capital”) among the controlling variables.

9

Furthermore, because it can be assumed that the scale of the market in the area of operation will have an
impact on firm performance, we also included the population of the prefecture or city in which theoperator’s head office is located (denoted as “POP”). Please note that the population of the prefecture orcity was taken from “population and number of households in the basic resident register” data as of January
1, 2019, published by the Statistics Bureau of Japan. Another controlling variable was the public-sector
dummy variable (denoted as “pub”; public-sector enterprise = 1, private-sector enterprise = 0). If raising
the level of management practices improves firm performance, the β1 coefficient is likely to be significant.
We conducted an OLS estimation, the results are shown in Table 5-3.

Insert Table 5-3

The estimation result shows there are positive coefficients on the management score for profit marginand value-added, but it is not statistically significant. In contrast, significant positive coefficients on the
management score are obtained for bus sales, the number of passengers carried per driver, and passenger
kilometers per driver. This is likely to be linked to the fact that bus fares are regulated as “public utility
charges,” and to the existence of a licensing system for the setting of fares. Previous research focusing on
manufacturing (Bloom and Van Reenen, 2007) reports that management practices have a beneficial impact
on company finances. This could be partly attributable to a positive impact on profit margin, sales, etc., asa higher evaluation of product quality is reflected in price. However, it is likely that high product quality
does not automatically lead to high fares, because charges are regulated for public utility operations, suchas bus services. Against this background, the results suggest that strong management practices are linked
to productivity in terms of output.
Furthermore, although a significant coefficient is obtained for the management practice score relating
to “operations,” no such result was obtained for the management practice score relating to “incentives.”
This suggests that organizational initiatives, such as operational control and timetable reform, have a larger
beneficial impact on performance than the evaluation of driver performance.
The results of our analysis show that management practices in a regulated industry impact output
performance more than profits and value-added and that operational control across the organization as awhole is more important than the efforts of individual employees.

5.3. Management practice score and productivity
Following Bloom and Van Reenen (2007), we estimate the production function and investigate the impact
of management practice scores on productivity. For the production function framework, we used the
management practice score and controlling variables, as investigated in the preceding section, to conduct
the OLS estimation.

lnY =

+

+

10

+

+

(2)

Here, L represents the number of drivers, K is fixed capital, MPS is the management practice score, and X
is the controlling variable. For Y, we used value-added per driver and passenger kilometers per driver. The
results of the OLS estimation are presented in Table 5-4.

Insert Table 5-4

Similar to the analysis of performance, in the analysis of manufacturing focusing on value-added, forexample, results that are in line with theory are obtained. However, in our study of bus operations, it is often
observed that the management practice score has a negative significant coefficient or no significant
coefficient. In contrast, regarding passenger kilometers per driver (an indicator of output), the management
practice score has a significant positive coefficient. Furthermore, we did not obtain a significant result forthe management practice score relating to “incentives,” and the interpretation shown in the performance
analysis could also be applied here.

6. Conclusion
Finally, we present the analysis results obtained in this study and provide its policy implications. Using
our survey on management practices, we applied the management practice scores created by Bloom and
Van Reenen (2007) to bus operators. First, in an overview of the distribution of such scores, it was foundthat bus operators are not engaged in high-level management practices. In several categories, companies
were polarized into two distinct separate groups: those who implemented strong management practices andthose that engaged in hardly any management practice.
A comparison of the distribution among public- and private-sector enterprises reveals that management
practices are at a relatively high level in public sector enterprises. Some private sector enterprises also
implement high-level management practices, but quite a few implement hardly any management practice,
throwing the spotlight on the problems of private sector operators. We compare metropolitan and local
operators in a similar manner and find that metropolitan operators tend to have relatively better management
practices than local operators. We consider the consequences that public enterprises in metropolitan areas
survived as a result of market competition. Meanwhile, among local operators, it is not guaranteed thatprivate sector enterprises will engage in strong management practices. These results imply that acompetitive environment matters for good management.
We conducted a simple empirical analysis to investigate the impact of these management practice scoreson firm performance and productivity. Unlike in the case of manufacturing firms’ analysis, we cannot obtaina stable coefficient when we use financial output as the explained variable, such as the profit rate add value.
However, we can obtain a relatively stable, positive, and significant coefficient when we use the explained
variable of physical output, such as bus sales and passenger times kilometers divided by bus drivers.

11

This is likely to relate to bus fares being regulated as public utility charges and adopting a permit system
for fare setting. Even if providers set a high price, it was expected that high-quality products would be soldin the manufacturing sector. However, bus enterprises cannot charge a high fare for customers, even if they
provide high-quality services, because fares are regulated by authorities. As a result, we cannot observe a
correlation between management practice scores and financial output, such as added value and profit rate.
In contrast, there is a positive correlation with quantitative output indicators, suggesting a link between
strong management practices and improvement in output performance. These results suggest that a highquality service does not always lead to financial profit in sticky price settings as a public utility. In addition,
as Bloom, Propper, Seiler, and Van Reenen (2015) and Bloom, Lemos, Sadun, and Van Reenen (2015) show,
our study also shows that the industry-specific productivity measure is positively related to managementscores.
Looking at each category separately, the coefficients on “operation” score are statistically significant, but
those of “incentive” score are not significant. These results suggest that organizational initiatives such as
operational control and timetable reform have a more beneficial impact on performance than the evaluationof driver performance and that operational control across the entire organization is more important than that
related to individual employees.
Our results showed that the relationship between management practices and performance of bus
operators differs slightly from that in manufacturing. Our research suggests that privatization alone does
not improve performance, but that organizational management practice is an important element.
Although we have analyzed the relation to financial performance indicators such as value-added andprofit margin, and to output performance indicators such as passenger kilometers, there has been no
discussion relating to the quality of public service. This might cause bus enterprises regulated by theauthority to be evaluated by a quantitative output instead of a qualitative output.
Our study suggests that privatization of public enterprises may not always improve firm performance
because management scores related to firm performance in private bus enterprises, are not high. Our study
shows that firm performance, represented by financial data, does not provide sufficient information for
management quality in the bus industry. Owing to the COVID-19 pandemic, the bus industry faces a further
decrease in the number of passengers. Our study implies that we need better performance measures toevaluate service quality and management quality for government’s support for the revitalization of the bus
industry.

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and Quality Adjustment in Medical and Nursing Services” RIETI Policy Discussion Paper Series 17-P022.(in Japanese)
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practices on the performance of bus companies” RIETI Discussion Paper Series 19-J-051. (in Japanese)
Lee, Keun, Tsutomu Miyagawa, YoungGak Kim, and Kazuma Edamura (2016) “Comparing theManagement Practices and Productive Efficiency of Korean and Japanese Firms: An Interview Survey
Approach” Seoul Journal of Economics 29, pp.1-41.
Mizutani Fumitoshi, and Takuya Urakami (2003) “A Private-public Comparison of Bus Service
Operators.” International Journal of Transport Economics, 30(2), pp. 167-185.
Morikawa, Masayuki(2016), “Service oriented nation (Service Rikkoku Ron)” NIKKEI Press.(inJapanese)
Morikawa, Masayuki(2018)”Productivity: Misperception and Truth”NIKKEI Press.(in Japanese)

13

Table 1: Overview of Route Bus Transport in Japan
2013
2014
2015
2016
2017
Private Public
Private Public
Private Public
Private Public
Private Public
Number of Passengers (millions)
2,984
923
2,995
914
3,031
924
3,061
914
3,061
934
Number of Operators
1,956
35
2,090
30
2,092
28
2,192
25 N.A.
N.A.
Revenue (billion yen)
562.3
152.7
560.4
151.5
568.4
152.6
572.7
152.6
577.7
155.2
Cost (billion yen)
584.8
166.0
583.5
164.0
583.0
160.5
583.0
160.5
601.2
165.0
Profit (billion yen)
-22.5
-13.3
-23.1
-12.5
-14.6
-7.9
-10.3
-7.9
-23.5
-9.8
(Source) Ministry of Land, Infrastructure and Transport(Note) The numbers in revenue, cost and profits are for operators owing more than 30 vehicles.
F.Y.

Table 2: Size Distribution of Bus Operatior in Japan in FY 2016
By Employees
By Capital
Number of
Number of
Capital (million
Number of
Employees
operator (%)yen)
operator (%)-101247(56.2%)-10*1282(57.8%)
11-30
415(18.7%)
11-30
404(18.2%)
31-50
135(6.1%)
31-50
195(8.8%)
51-100132(6.0%)51-100214(9.7%)
101-300
160(7.2%)
10197(4.4%)
301-500
128(5.8%)
Public25(1.1%)
Total
2217(100%)
Total
2217(100%)
Total
2217(100%)(Source) Ministry of Land, Infrastructure and Transport(Note) The item "less than 10 million in capital (*)" includes individual ownership operators (50 operatators)
Number of
Vehicle
-10
11-30
31-50
51-100101-

By Vehicle
Number ofoperator (%)
1559(70.3%)300(13.5%)96(4.3%)97(4.4%)
165(7.4%)

Table 3: Finacial Situation of Route Bus Operators
2013
2014
2015
2016
2017
F.Y.
Private Public
Private Public
Private Public
Private Public
Private Public
Number of Defecit Operators
160
20
161
17
145
15
142
15
153
16
Number of Surplus Operators
65
2
63
3
76
4
78
3
73
2
(Source) Ministry of Land, Infrastructure and Transport(Note) The numbers are for operators owing more than 30 vehicles.
Table 4: Average Revenue and Cost in yen per Vehichle Kilometer
2013
2014
2015
2016
2017
F.Y.
Private Public
Private Public
Private Public
Private Public
Private Public
Revenue
381.31605.53384.19615.7
392.21624.47399.77638.72408.82654.64Cost
397.1
658.14400.06666.15402.28656.64411.46678.24425.93696.2
Labor Cost
224.41357.6
228.11359.53233.05358.38223.03361.21
245.66380.97
Fuel Oil Cost
43.11
50.06
41.19
49.64
31.8
38.23
30.27
33.93
34.61
39.83
Other Cost
129.58250.48130.76256.98137.43259.93158.16283.1
145.66275.4(Source) Ministry of Land, Infrastructure and Transport(Note) The numbers are for operators owing more than 30 vehicles.

14

Table4-3 Descriptive statistics: Management practice score
number ofsampleAverageStandard
Deviasion

Minimum

Maximum

Q1

124

2.50

1.38

1

4

Q2

128

2.73

1.41

1

4

Q3

128

2.59

1.28

1

4

Q4

130

2.88

0.75

1

4

Q5

81

2.47

1.08

1

4

Q6

129

2.13

1.35

1

4

Q7

129

1.59

0.85

1

4

Q8

110

1.79

1.24

1

4

Q9

128

2.61

1.34

1

4

Q10

128

1.53

0.98

1

4

Q11

126

1.92

1.07

1

4

Q12

118

2.11

0.77

1

4

Q13

125

1.78

1.02

1

4

Q14

122

2.46

1.31

1

4

Q15

122

2.17

0.70

1

4

Q15 the loss of excellent member

125

2.15

0.61

1

3

Q16

124

1.52

0.94

1

4

Q17

122

2.24

0.92

1

4

Q18

121

2.60

1.10

1

4

Whole

130

2.19

0.49

1.20

3.13

Operations

130

2.09

0.53

1.00

3.25

Target and Monitoring

130

2.45

0.82

1.00

4.00

Incentive

129

2.10

0.47

1.00

3.57

Organization reform

130

2.24

0.66

1.25

3.88

15

Table4-4 Descriptive statistics: financial and business data
unit number of sample Average Standard Deviasion Minimum

Maximum

Operating Profit

millionn JPY

96

138

2,933

-10,978

26,374

Recurring Profit

millionn JPY

97

446

3,598

-2,80335,041Sales

millionn JPY

101

5,289

22,811

5.00

224,141

Labor costs

millionn JPY

83

2,013

7,259

6.00

63,432

Depreciation

millionn JPY

80

1,060

5,694

0.78

48,460Add Value

millionn JPY

82

3,586

16,454-5.00

146,933

Capitalmillionn JPY

101

7,506

51,606

1.00

504,976

Fixed asssets

millionn JPY

99

23,538

158,713

2.00

1,548,916

person

108

274

1,226

1

12,575km

112

29,659225,13613

2,276,641

111

63

96

1

520

112

4,928,752

8,726,770

6,830

46,561,501

Passengers carried

112

10,058,052

31,324,666

600

231,212,000

Dummy of metropolitan area

131

0.28

0.45

0.00

1.00

Populations(log)

131

14.75

0.83

13.44

16.44

Dummy of public sector

131

0.11

0.32

0.00

1.00

Profit rate(operating profit/sales)

94

-0.12

0.52

-3.09

0.97

Profit rate(recurring profit/sales)

79

0.03

0.64

-1.13

3.09

Revised time table

127

2.61

1.34

1.00

4.00

the number of bus driver
Length of routes in operation
No. of routes in operation
Km traveled per annumkm

IC cardPassenger bus sales

millionn JPY

Passenger bus operating revenue

millionn JPY

127

1.52

0.98

1.00

4.00

93

2,448

6,086

0.60

41,512

88

2,334

5,826

0.60

39,196

No. of passenger bus driver

109

162

362

1.00

2,480

Profit rate of passenger bus

85

-0.50

1.15

-5.86

1.00

130

14.66

33.90

0.00

100.00

71

1.01

0.86

-2.13

2.80

Public capital contribution ratio
TFP(log)％16Figure 5-1 Management practice score (Kernel density estimation)

Figure 5-2 Management practice score (Public vs. Private)

17

18

Figure 5-3 Management practice score(metropolitan vs. local)

19

20

Table 5-1 Descriptive statistics: Management practice score (Public vs. Private)Management
Practice
PublicTarget andOperations

PrivatePublicIncentive

Monitoring

PrivatePublicPrivatePublicOrganization reform

PrivatePublicPrivateObservation

15

115

15

115

15

115

15

114

15

115

Average

2.40

2.16

2.36

2.06

2.67

2.42

2.18

2.08

2.58

2.19

STD

0.47

0.49

0.57

0.52

0.60

0.85

0.50

0.47

0.55

0.67

Min

1.39

1.20

1.38

1.00

1.67

1.00

1.50

1.00

1.25

1.25

Max

3.11

3.13

3.25

3.25

3.50

4.00

3.22

3.57

3.11

3.88

Table 5-2 Descriptive statistics: Management practice score (metropolitan vs. local)
Management PracticeMetropolitan

Operations

Local

Metropolitan

Target and Monitoring
Local

Metropolitan

Incentive

Local

Metropolitan

Organization reform
Local

Metropolitan

Local

Observation

37

93

37

93

37

93

36

93

37

93

Average

2.37

2.12

2.31

2.01

2.67

2.36

2.17

2.07

2.49

2.14

STD

0.47

2.12

0.52

2.01

0.79

2.36

0.42

2.07

0.69

2.14

Min

1.39

1.20

1.25

1.00

1.67

1.00

1.44

1.00

1.25

1.25

Max

3.11

3.13

3.25

3.25

4.00

4.00

3.22

3.57

3.88

3.75

21

Table 5-3 Estimation result 1
profit rate
MPS
average MP

Whole
0.101

Whole
(0.88)

Whole

Operations

Target&Monitoring

Incentive

Organization Reform

0.102(0.87)

0.146(1.53)

0.101(1.15)

0.047(0.85)

0.114(1.24)

0.063(0.90)

pub-0.103(-0.66)-0.174(-1.32)-0.174(-1.31)-0.168(-1.26)-0.163(-1.24)-0.172(-1.29)

lnPOP

0.021

(0.33)

0.034(0.64)

0.036(0.69)

0.041(0.78)

0.037(0.71)

0.042(0.80)

0.000(0.54)

0.000(0.55)

0.000(0.65)

0.000(0.69)

0.000(0.53)-0.896(-1.17)-0.824(-1.08)-0.793(-1.03)-0.866(-1.13)-0.832(-1.08)

capital_cons
Observation-0.350(-1.33)-0.652(-0.70)

94

94

91

91

91

91

91

F-value

0.78

0.42

1.16

0.91

0.75

0.96

0.77

R-Sq

0.00840.01380.05140.04040.03370.0426

0.0347

passenger bus profit rate
MPS
average MP

Whole
0.408

Whole
(1.70) *Whole

Operations

Target&Monitoring

Incentive

Organization Reform

0.290(1.18)

0.370(1.47)

0.338(1.44)-0.027(-0.18)0.381(1.61)

0.116(0.60)

pub

0.220(0.65)

0.212(0.57)

0.210(0.56)

0.296(0.79)

0.249(0.68)

0.254(0.67)

lnPOP

0.263

(1.81) *0.281(1.87) *0.282(1.88) *0.324(2.15) **0.289(1.95) *0.308(2.04) **0.000(-0.30)0.000(-0.33)0.000(-0.26)0.000(-0.16)0.000(-0.30)-5.498(-2.52) **-5.409(-2.49) **-5.242(-2.38) **-5.596(-2.57) **-5.348(-2.43) **capital_cons
Observation
F-value
R-Sq-1.406(-2.56) **85-5.055(-2.39) **85

2.89 *
0.0337

79

79

79

79

79

2.28

1.98

1.96

1.41

2.1

1.5

0.07790.09680.09580.07090.10190.075

add value
MPS
average MP

Whole4980.854

Whole(1.38)

Whole

Operations

Target&Monitoring

Incentive

Organization Reform

2295.227(0.66)

886.214(1.62)

650.048(1.27)

232.723(0.73)

575.360(1.11)

631.811(1.54)

pub

13972.230(3.07) ***702.063(0.93)

683.065(0.89)

742.661(0.97)

761.644(1.00)

669.619(0.88)

lnPOP

3852.805(1.94) *839.326(2.64) **857.040(2.67) ***900.180(2.80) ***905.944(2.87) ***855.688(2.70) ***0.279(55.44) ***0.279(55.04) ***0.280(54.81) ***0.280(55.08) ***0.279(55.14) ***-13431.110(-2.94) ***-13109.740(-2.86) ***-12932.090(-2.80) ***-13653.320(-2.95) ***-13140.600(-2.88) ***capital_cons
Observation-7660.876
82

F-value

1.89

R-Sq

0.0231(-0.91)-60714.950(-2.13) **

82

80

80

80

80

80

5.93 ***

947.62 ***934.91 ***921.36 ***930.23 ***944.22 ***0.98060.98030.98010.98020.98050.185722

Table 5-3 Estimation result 1 (continue)
bus sales
MPS
average MP

Whole
4484.389

Whole(3.47) ***Whole

Operations

Target&Monitoring

Incentive

Organization Reform

1999.895(1.81) *1730.305(2.23) **2193.790(3.23) ***290.906(0.69)

606.120(0.83)

1362.522(2.45) **pub

8414.300(6.07) ***4079.478(3.98) ***3933.262(3.95) ***4339.011(4.14) ***4348.262(4.17) ***4016.887(3.93) ***lnPOP

2029.254(3.38) ***1354.958(3.22) ***1249.706(3.07) ***1577.518(3.75) ***1555.600(3.69) ***1401.597(3.41) ***0.066(9.99) ***0.066(10.22) ***0.067(9.76) ***0.067(9.79) ***0.066(9.91) ***-22667.010(-3.84) ***-21972.540(-3.83) ***-22837.110(-3.76) ***-23056.910(-3.80) ***-22635.280(-3.86) ***capital_cons
Observation-7595.512(-2.58) **-33152.060(-3.91) ***

93

93

86

86

86

86

86

F-value

12.06 ***

23.31 ***

57.37 ***

62.31 ***

53.29 ***

53.5 ***

58.28 ***

R-Sq

0.117

0.44

0.73910.75470.72460.72540.7421

no. of passenger/no. of bus driverMPS
average MP

Whole
27408.850

Whole(3.83) ***Whole

Operations

Target&Monitoring

Incentive

Organization Reform

14893.790(2.79) ***12873.880(2.32) **17024.160(3.43) ***1506.199(0.44)

6111.839(1.14)

10845.470(2.53) **pub

69971.860(8.82) ***56544.680(6.55) ***55036.140(6.60) ***59076.430(6.68) ***58811.500(6.71) ***55735.480(6.47) ***lnPOP

9461.022(2.85) ***9953.340(2.84) ***9590.360(2.84) ***11055.070(3.08) ***10583.560(2.94) ***10352.190(2.99) ***capital_cons
Observation

0.099-35080.030(-2.18) **-156583.300(-3.22) ***-158107.100(1.76) *(-3.10) ***0.093-160398.500(1.72) *(-3.26) ***0.103-149977.100(1.78) *(-2.85) ***0.106-152025.500(1.85) *(-2.91) ***0.092-160128.700(1.64)(-3.15) ***

100

100

85

85

85

85

85

F-value

14.69 ***

39.91 ***

24.53 ***

27.86 ***

21.83 ***

22.4 ***

25.06 ***

R-Sq

0.13040.555

0.55090.5821

0.52190.52830.5561(no. of passenger*km)/no. of bus driver(log)MPSaverage MP

Whole
2.267

Whole
(4.40) ***Whole

Operations

Target&Monitoring

Incentive

Organization Reform

2.006(3.82) ***1.988(3.97) ***2.052(4.53) ***0.775(2.46) **0.835(1.64)

1.753(4.63) ***

pub

1.587

(2.06) **1.365(1.75) *1.281(1.68) *1.622(1.99) **1.726(2.08) **1.213(1.60)

lnPOP

0.124

(0.38)

0.280(0.89)

0.278(0.90)

0.406(1.23)

0.388(1.14)

0.336(1.10)

0.000(0.58)

0.000(0.48)

0.000(0.73)

0.000(0.74)

0.000(0.36)

6.035(1.31)

6.099(1.36)

6.601(1.36)

7.045(1.42)

5.636(1.26)

capital_cons
Observation

9.791
98

F-value

19.36 ***

R-Sq

0.1678(8.40) ***

8.312
98
8.15 ***
0.2064(1.76) *85

85

7.06 ***

8.4 ***

0.26090.295823

85
4.32 ***
0.177885
3.37 **
0.144185
8.67 ***
0.3025

Table 5-4 Estimation result 2
lnY/L
MPS

Whole

Whole

Whole

Operations

Target&Monitoring

Incentive

Organization Reform

lnK/L

0.455

(7.28) ***0.416(6.56) ***0.420(6.13) ***0.419(6.17) ***0.397(5.86) ***0.412(5.87) ***0.407(6.03) ***MP-0.268(-1.31)-0.382(-1.84) *-0.383(-1.83) *-0.383(-2.05) **-0.240(-2.04) **-0.135(-0.69)-0.315(-2.04) **

pub

0.493

(1.79) *0.504(1.76) *0.524(1.84) *0.500(1.76) *0.457(1.57)

0.536(1.87) *

lnPOP

0.165

(1.37)

0.169(1.36)

0.170(1.38)

0.162(1.33)

0.128(1.02)

0.161(1.32)

0.000(-0.15)0.000(-0.10)0.000(-0.17)0.000(-0.17)0.000(0.01)-0.649(-0.37)-0.699(-0.40)-0.747(-0.42)-0.602(-0.33)-0.638(-0.36)

capitalConstant
Observation

1.591(3.36) ***-0.586(-0.34)

71

71

71

71

71

F

26.48 ***

15.33 ***

12.09 ***

12.39 ***

12.39 ***

Rsq

0.43780.4817

0.48190.4881

0.488

71

71
***

***

0.459

0.488

(no. of passenger*km)/no. of bus driver(log)
MPS

Whole

Whole

Whole

Operations

Target&Monitoring

Incentive

Organization Reform

lnK/L

0.346

(2.33) **0.292(1.93) *0.302(1.90) *0.324(2.07) **0.341(2.05) **0.329(1.91) *0.333(2.18) **

MP

2.159

(4.45) ***1.956(3.97) ***1.990(4.04) ***1.981(4.45) ***0.878(2.84) ***0.849(1.69) *1.790(4.88) ***

pub

1.085

(1.48)

1.124(1.47)

1.057(1.41)

1.320(1.66)

1.462(1.78) *0.940(1.27)

lnPOP

0.297

(0.98)

0.308(0.99)

0.315(1.04)

0.425(1.32)

0.412(1.23)

0.364(1.23)

0.000(-0.04)0.000(-0.19)0.000(0.07)

0.000(0.10)

0.000(-0.35)5.069(1.12)

5.097(1.14)

5.441(1.14)

6.061(1.24)

4.520(1.03)

capitalConstant

9.333

Observation

84

F

13.98 ***

Rsq

0.2567(8.35) ***

5.377
84
8 ***
0.2882(1.22)

83

83

6.67 ***

7.48 ***

0.3023

0.327

24

83

83

4.71 ***
0.234283***

0.1844***0.3539Appendix 1 - Questionnaire
These questions formed the questionnaire sent out to bus operators.
Questions about your company’s business philosophy.
(For all members of staff)
Q 1-1 Does your company have a business philosophy that is published on your website and elsewhere? If the answer is“yes,” please describe it in concrete terms.

１．Yes

２．No（or currently under formulation）Go to Q 2-1

Q 1-1S (If the answer to Q 1-1 was “yes”), please enter specific details. (Up to five details)
Q 1-2 How is the business philosophy shared with all members of staff? (For example, repeated at the morning meeting,printed on staff ID cards）Please enter specific details.
Q 1-3 Is the philosophy broadly understood by counterparties outside the company and by shareholders?
１．Yes
２．No
● Questions about the organization’s targets(For all members of staff)
Q 2-1 Based on the business philosophy or other ideas, there are likely to be targets at various levels of the organization.
At multiple levels, do members of staff have specific numerical targets beyond the company’s vision and slogan?
(We are not asking about targets at the whole-company, department, or section level.) If so, what kind of targets
are these? Please provide up to three representative answers.
１．Yes
２．No (or currently under investigation)
Go to Q 3-1
Q 2-1S (If the answer to Q 2-1 was “yes”), please provide representative examples of the kind of targets set. (Up to three
examples)Q 2-2 Are targets adjusted between departments (for example, between places of business) in a way that is consistent?
１．Yes
２．No (or currently under investigation)
Q 2-3 Do the majority of staff know the relevant targets of the organization?
１．Yes
２．No
● Questions about monitoring the achivement of targets（For all members of staff）
Q 3-1 Is the extent to which targets are achieved monitored? If it is, please provide one method by which this is done.
１．Yes
２．No
Go to Q 7-1(If the answer to Q 3-1 is “yes”), please describe ONE relevant method.
Q 3-2 Is monitoring regular? If it is, how frequent is it?
１．Yes
２．No
Go to Q 4-1
Q 3-2S (If the answer to Q 3-2 is “yes”), please chose ONE answer that broadly reflects the frequency.
１．Once a fortnight
４．Approx. every six months
２．Approx. once a month

５．Approx. once a year

３．Approx. every two or three months

６. Other (specifically:)

Q 3-3 On top of regular monitoring by the company, is there also additional monitoring at the place-of-business level orat the employee level?
１．Yes
２．No

25

● Questions about organizational responses after the monitoring(For all members of staff)
Q 4-1 In your company, are the results of monitoring made known within the unit?
1. Yes
2. No

Go to Q 5-1

Q 4-2 (If the answer to Q 4-1 is “yes”), are the results of monitoring also shared with related units?
1 ．Yes
2 ．No
Go to Q 5-1
Q 4-3 If so, is there a means of allowing fair comparison of the level of achievement of targets that differ according tounit? (For example, is there a common yardstick for the amount of overtime?) If there is such a means, please givedetails.
● Questions about organizational responses when monitoring of the operation of organizational targets showsthat a unit has not achieved its targets(For all members of staff)
Q 5-1 In your company, when targets are found not to have been achieved, is a review meeting with both management
and staff held at an early date?
1．Yes
２．No
Go to Q 5-3
Q 5-2 (If the answer to Q 5-1 was “yes”), after the review meeting, are points to be adjusted communicated within thedepartment and are remedial measures swiftly implemented? (Excluding staffing matters)
１．Yes
2．No
Q 5-3 At what level are problem points and countermeasures handled?
1．At each place of business
2．Whole-company levelQ 5-3S Please give details of a concrete example if possible.
● Questions about organizational responses when, in contrast to the last category, targets are achieved.
(For all members of staff)
Q 6-1 At your company, when targets are achieved, are those targets maintained, or is there an investigation into setting
targets for further improvement?
1．Yes
２．No
Go to Q 7-1
Q 6-2 (If the answer to Q 6-1 is “yes”), how long is it between the setting of targets for further improvement and theiroperation?
Approximately
years
and
monthsQ 6-3 Are the measures systematized at the whole-company level?
1．Yes
２．No
● Questions about information transmission within the organization other than formal communication such asat meetings(For all members of staff)
Q 7-1 Are there strategies or events (for example, informal meetings or meals for key personnel only) to increase
communication, other than formal meetings? If so, please give details.
1．Yes
２．No
Go to Q 8-1
Q 7-1S (If the answer to Q 7-1 is “yes”), please give details of ONE concrete example.
Q 7-2 Is such communication carried out for each age group or length-of-service group?
1．Yes
２．No
Go to Q 8-1
Q 7-3 Is such communication carried out across strata such as age group or length-of-service group?

26

1．Yes

２．No● Questions about implementation of organizational reform. Here, organizational reform means big changes in
the organization changing the way things are done, such as changing the name, or role within the company, ofmultiple units.
(For all members of staff)
Q 8-1 Is the form of the organization reviewed?
1．Yes
２．No
Go to Q 9-1
Q 8-2 (If the answer to Q 8-1 is “yes”), please choose the most important trigger for review of the form of the organization.
(Please choose ONE answer.)
1．A regular review
３．Direction from the authorities
２．Non-achievement of duty targets

４．Other (please specify:)

Q 8-3 Is the purpose of reviewing the form of the organization shared widely with employees? (Please choose ONE
answer.)

１． It is shared with almost all employees.
２． It is shared with almost all employees in the relevant unit.
３． The matter is only understood at the grade with relevant responsibility● Questions about timetable reform（For all members of staff）
Q 9-1 Is there regular reform of the timetables for the passenger bus routes operated by your company?
１．Yes
２．No
Go to Q 10-1
Q 9-2 (If the answer to Q 9-1 is “yes”), is the timetable reform in response to demands from customer such as thoseobtained through feedback. (Please answer with regard to ONE example.)
１．Yes
２．No
Q 9-3 Is the timetable reform carried out in line with the needs of customers, such as in coordination with timetable reformat other transport institutions, for example those running railroads and passenger ships with which your services
connect?
１．Yes
２．No(There is no particular awareness.)● Questions about operational control(For all members of staff)
Q 10-1 Do your passenger buses use a smartcard such as Suica and Icoca?
１．Yes
２．No

Go to Q 11-1

Q 10-2 (If the answer to Q 10-1 is “yes”), does your company utilize smartcard data, and so on, in operational control,
such as timetable reform and change of vehicles?
１．Yes
２．No
Go to Q 11-1
Q 10-3 (If the answer to Q 10-2 is “yes”), does your company engage in operational control utilizing IT equipment otherthan smartcards such as Suica and Icoca (such as installing GPS equipment in buses or displaying arrival times atbus stops)?
１．Yes
２．No
(If the answer is “yes,” please give details of ONE concrete example.)●

Questions about the promotion system and the remuneration system

27

(For all members of staff)
Q 11-1 At your company, to what extent is “seikashugi” (Results-based HR Management, or RHRM) used in remunerationand promotion? (Please choose the ONE answer that best applies.)
１． Hardly at all
Go to Q 12-1
２． Mainly for those in senior positions
３．For all employees
４．RHRM is used in such a way that there is comprehensive evaluation including of results, ability, and feelings andthe importance of results within that evaluation increases in line with the grade of the job.
Q 11-2 Has the introduction of RHRM utilizing a target management system improved the performance of workers?
１．Yes
２．No
● Questions about means of improving motivation(For all members of staff)
Q 12-1 Are methods other than the systems for promotion and remuneration used to raise the motivation of employees?
Please choose from the answers below. (Multiple answers allowed)
１．Awards for long service are given every few years.
２．Awards are given once a year.
３．One-off payments are made through a qualification acquisition system
４．Other methods are employedSpecifically(

５．No other methods are used)
Go to Q 13-1

So far, the questions have been about what happens when targets have not been achieved and what is done to raise
motivation when they have been achieved, from the viewpoint of the organization. The rest of the questions are from theviewpoint of human resources.
● Questions about treatment of employees whose performance is not good
(For all members of staff)
Q 13-1 How are employees whose performance is not good treated? Please choose the answers that best apply. (Multiple
answers allowed)
１． Mainly with verbal warnings
２．They are transferred to a different unit for a certain length of time.
３．There is a discussion to thoroughly ascertain the employee’s abilities, with demotion possible.
４．A score is assigned to the level of target achievement, with salary reduction and demotion.
● Questions about treatment of workers with strong performance(For all members of staff)
Q 14-1 How are workers with strong performance treated? Please choose the ONE answer that best applies.
１．They receive a verbal commendation.
２． Successes are reported in internal bulletins and awards are given (non-financial incentive)
３．They are awarded a one-off payment or similar.
４． They receive promotion or salary increase.
● Questions about the securing of excellent members of staff
Q 15-1 Is it possible to identify within the company the excellent key members of staff with strong performance mentioned
in the previous question? Please choose the ONE answer that best applies.
１．It is possible to a certain extent.

28

２．It is broadly possible because of a build-up of positive comments from managers.
３．It is possible because performance is quantitatively evaluated.
４．It is not possible. No conscious attempt is made.

Go to Q 16-1

Q 15-2 Is this kind of member of staff treated differently from other members of staff? If “yes,” in what way?
１．Yes
２．No
Go to Q 15-3
Q 15-2S (If the answer to Q 15-2 was “yes”), please give details of that treatment.
Q 15-3 Has it been possible to prevent the loss of this kind of member of staff?
１．Yes
２．No
● Questions about evaluation of managers’ staff management(For all members of staff)
Q 16-1 Are there clear criteria as to the extent to which managers should, for example, nurture their subordinates? Pleasechoose the ONE answer that best applies.
１．Yes, relevant targets are monitored.
２．Yes, 25% or more of target management evaluation is related to nurturing of subordinates.
３．Yes, there is objective numerical evaluation.
４．No, there are no particular relevant criteria.
Q 16-2 Is there a system of incentives for managers who nurture excellent subordinates, such as remuneration andpromotion?
１．Yes
２．No
Go to Q 17
Next, questions about training personnel (especially, training courses and on-the-job training)
Regarding training of personnel through training courses(For all members of staff)
Q 17 Are role-specific training courses and issue-specific training courses provided to raise the ability of workers in theirduties? (Please chose ONE answer.)
１．Grade-specific training courses are provided.
●

２．Various internal and external training opportunities are provided such as seminars and interdepartmental discussions.
３． For key elements, we rely on external consultants.
４

No.

Regarding on-the-job training of personnel(For all members of staff)
Q 18 Does your company nurture members of staff through on-the-job training? (Please choose ONE answer.)
１． Our corporate culture is to automatically look at the what is happening in the workplace, but there is no particularsystem in place.
２． When appointed, the new member of staff is assigned to an existing employee and taught his or her duties (theduties are carried out by the assigned existing employee).
３． In the workplace, the new member of staff is taught one-to-one by a veteran employee (the duties are carried out
by the new employee).
４．No.
● In conclusion, questions about your company(For all members of staff)
F 1 Please indicate all the core business of your company. (Multiple answers allowed)
１．Passenger bus services
３．Railroad services ５. Other (specifically:29)

２．Bus charter services

４．Taxi business

F 2 Please indicate the prefecture or administrative district in which your company’s head office is located? (Please choose
ONE answer.)
１．Hokkaido ９．Tochigi 17．Ishikawa 25．Shiga 33．Okayama
41．Saga
２．Aomori

10．Gunma

18．Fukui 26．Kyoto

３．Iwate 11．Saitama

19．Yamanashi

４．Miyagi

12．Chiba

20．Nagano 28．Hyogo

５．Akita

13．Tokyo

21．Gifu

34．Hiroshima

27．Osaka

29．Nara35．Yamaguchi

36．Tokushima

37．Kaqawa

６．Yamagata

14．Kanagawa

22．Shizuoka 30．Wakayama

７．Fukushima

15．Niigata

23．Aichi

８．Ibaraki

16．Toyama 24．Mie

42．Nagasaki
43．Kumamoto
44．Oita

45．Miyazaki
38．Ehime

31．Tottori 39．Kochi

32．Shimane

46．Kagoshima

47．Okinawa

40．Fukuoka

F 3 Please indicate all the prefectures or administrative districts in which places of business belonging to your company’s
bus operations are located?（Multiple answers allowed）
１．Hokkaido
２．Aomori

９．Tochigi
10．Gunma

17．Ishikawa

25．Shiga

18．Fukui 26．Kyoto

３．Iwate11．Saitama

19．Yamanashi

４．Miyagi

12．Chiba

20．Nagano

５．Akita

13．Tokyo

21．Gifu

29．Nara６．Yamagata

14．Kanagawa 22．Shizuoka

７．Fukushima

15．Niigata

８．Ibaraki 16．Toyama

34．Hiroshima

27．Osaka

28．Hyogo

33．Okayama

42．Nagasaki

35．Yamaguchi

36．Tokushima

43．Kumamoto
44．Oita

37．Kagawa

45．Miyazaki

30．Wakayama

38．Ehime

23．Aichi 31．Tottori 39．Kochi

24．Mie41．Saga

32．Shimane

46．Kagoshima

47．Okinawa

40．Fukuoka

F 4 Please tell us about the current situation in your passenger bus operations. (Company confidentiality will bemaintained.) Please note, where the items below are included in IR materials or reports to the transport authorities, there
is no need to fill in the relevant boxes, if copies are attached.
Length ofroutes inoperation
No. of routes inoperation
Ave. no. ofvehicles owned
Ave. vehicle
age
Ave. vehicle
capacitykmroutesvehicles．

years
peopleKm traveled per
annum

km

Ave. no. of km
traveled per day
Total no. of hours
traveled by vehicles
per annum
Passengers carried
per annum
Total no. ofvehicles inoperation per
annum

km
hours

peoplevehiclesF 5 Please give your company’s total number of employees and the number of bus drivers (including non-regular
employees) and the total number of employee hours and driver hours per annum
people (of which, passenger bus drivers
people)hours (of which, passenger bus drivers
hours)
F 6 Please describe the ownership format of your company. For private-sector enterprises, please give the proportion ofshares held by the public sector (at the national, prefectural, or municipal level).

30

１．Public sector

２．Private sector

Public-sector ownership.

%

F 7 At what kind of organization did the president (or equivalent) of your company previously work?
１．The founding family
３．Parent company
５．Financial institution
２．In-house appointment

４．Public sector

６．Other ()

F 8 Questions about the financial circumstances of your company in the most recent year. Company confidentiality will
be maintained.)
Where it is not possible to separate the passenger bus business from whole-company finances, please make anestimate. (When entering an estimate, please circle “estimate” at the top of the column.) Please note, where the items
below are included in Annual Securities Reports or reports to the transport authorities, there is no need to fill in therelevant boxes if these reports are attached.

Total revenue (sales)J P Y(Unit: JPY)
Within which, passenger bus business (actual /estimate) (please circle as appropriate)
JPY

Operating revenue (operating
income)within which, transportbusiness income
Non-operating revenue (nonoperating income)within which, subsidy fromnational or prefectural
government, etc.
Recurring costs

J P Y

JPY

J P Y

JPY

J P Y

JPY

J P Y

JPY

J P Y

JPY

Operating costs

J P Y

JPY

Recurring profit

J P Y

JPY

Workers’ salaries (labor costs)

J P Y

JPY

Depreciation

J P Y

JPY

Fuel costs

J P Y

JPY

Cost of maintenance

J P Y

JPY

Whole company

Cost breakdown

Assets and liabilities
Fixed assets

J P Y

JPY

Tangible fixed assets

J P Y

JPY

Intangible fixed assets

J P Y

JPY

Whole company

within which, passenger bus businessCurrent assets

J P Y

JPY

Fixed liabilities

J P Y

JPY

Current liabilities
Capital

J P Y
J P Y

JPY
JPY

That completes the questions. A report summarizing the results of the survey will be sent to your company for reference.
Please indicate the person to whom the report should be sent, and their address.

31Appendix2 Method of scoring
Q1 business philosophy scoring (1～4)
Q1-1 ②①+1+2 → Q1-2 +3 (in the case that detailed example is written)
Q1-3 ② +3① +4

Q2 organization targets
Q2-1 ② +1① Q2-2→② +2①→ Q2-3② +3①+4Q3 organization operations
Monitoring the stated targets(1～4)
Q3-1 ②①+1
Q3-2 ②①+2
Q3-3 ②+3①+4

Q 4 what happens after the monitoring(1～4)
Q4-1 ②①+1
Q4-2 ②①+2
Q4-3 if concrete descriptions +4
If not concrete descriptions +3

Q5 the operation of organizational targets
negative incentive(1～4)
Q5-1 ②+1①

Q5-2 ②
①

+2
Q5-3

① +3
② +4

Q6 the operation of organizational targets
positive incentive(1～4)
Q6-1 ①+2②+1

Q6-2 if terms late this fiscal year
Q6-3

+1

+1

Q7 information transformation(within the organization) (1～4)
Q7-1 ②①+1
Q7-2 ②①+2
Q7-3 ②+3①+4

Q8 organization reform
Q8-1 ② +1① Q8-3

③ +2
② +3
① +4

32

Q9 driving control (time table)
Q9-1 ②

+1

①

Q9-2

②

+2

①

Q9-3

② +3
① +4

Q10 driving control (IT use)
Q10-1 ②

+1①

Q10-2 ②
①

+2
Q10-3

②
①

+3
+4 (in the case that detailed example is written)

Q11 incentive
promotion(1～4)
Q11-1 ①

+１、② +2、③ +3、④ +4

Q11-2 no scoringQ12 incentive
motivation(1～4)
Q12-1 ⑤+1 ①+2 ②+2 ③+3 ④each evaluate (+4)
Q13 incentive
low performance worker(1～4)
Q13-1 ①

+１、② +2、③ +3、④ +4Q14 incentive
high performance worker(1～4)
Q14-1 ①

+１、② +2、③ +3、④ +4Q15 securing of excellent worker
Q15-1 ①+2、② +3、③ +4、④ +1

Q16 evaluation of manager’s management
Q16-1 ①+2、② +3、③ +4、④ +1

Q16-2 no scoring
Q17 training of worker (training course)
Q17-1 ①+2、② +3、③ +4、④ +1

Q18 training of worker (OJT)
Q18-1 ①+2、② +3、③ +4、④ +1

Operations (8)Q1、Q2、Q7、Q9、Q10、Q15×2、Q16
Target and Monitoring (4)Q3、Q4、Q5、Q6
Incentives (9)Q11、Q12、Q13、Q14、Q15×2、Q16、Q17、Q18
Organization Reform
Q2～Q1033

中央大学経済研究所( INSTITUTE OF ECONOMIC RESEARCH, CHUO UNIVERSITY)
代表者 林 光洋 (Director: Mitsuhiro Hayashi)〒192-0393 東京都八王子市東中野 742-1(742-1 Higashi-nakano, Hachioji, Tokyo 192-0393 JAPAN)
TEL: 042-674-3271+81 42 674 3271
FAX: 042-674-3278+81 42 674 3278
E-mail: keizaiken-grp@g.chuo-u.ac.jp
URL: https://www.chuo-u.ac.jp/research/institutes/economic/