JCER DISCUSSION PAPER
No.120Management Practices and Firm Performancein Japanese and Korean Firms－An Empirical Study Using Interview Survey－

Keun Lee（Seoul National University）
Tsutomu Miyagawa（Gakushuin University）
Shigesaburo Kabe（Japan Center for Economic Research）
Junhyup Lee（Seoul National University）
Hyoungjin Kim（Seoul National University）
YoungGak Kim（Hitotsubashi University）

2009 年 6 月

June 2009

社団法人 日本経済研究センター

Japan Center For Economic Research

Management Practices and Firm Performancein Japanese and Korean Firms-An Empirical Study Using Interview Survey-

June 2009

Keun Lee(Seoul National University)
Tsutomu Miyagawa(Gakushuin University)
Shigesaburo Kabe
(Japan Center for Economic Research)
Junhyup Lee(Seoul National University)
Hyoungjin Kim(Seoul National University)
YoungGak Kim(Hitotsubashi University)01. Introduction1

The US economy had accelerated economic growth since the late 1990s. At first, many
economists and policy makers believed that the rapid growth in the IT industry and IT
investment contributed to the acceleration in US economic growth and many advanced countries
supported the IT industry and IT investment in their own countries. However, the gap in rates of
economic or productivity growth between the US and other advanced countries has remainedeven in the early 2000s. Since then, many economists have paid attention to the complementaryrole in intangible assets in productivity growth, that is, they started to believe that without
intangible assets, the IT assets does not contribute to productivity growth at the firm andaggregated level.2
Corrado, Hulten and Sichel (2005, 2006) (hereafter referred to as CHS) estimated theinvestment in intangible assets at the aggregate US economy level classifying intangible assets
into three categories: computerized information, innovative property, and economic
competencies. Following CHS (2006), many researchers in advanced countries tried to estimate
intangible investment.3 Comparing the estimation results in Japan with those in the US and theUK, Fukao et al (2008) found the following characteristics in Japanese intangible investment.
(1)

Investment in computerized information measured in terms of GDP in Japanis almost the same as that in the US and the UK.
(2)

Due to the large R&D investment in Japan, investment in innovative

property in Japan is larger than that in the US and the UK.
(3)

As for investment in economic competencies, investment/GDP ratio in Japanis much smaller than that in the US and the UK.
The third category includes investment in brand equity, firm-specific human capital, andorganizational capital. Among these, the investment in firm-specific human capital andorganizational capital in Japan is much smaller than those in the US and the UK. However, it isdifficult to estimate these investment amounts at the aggregate level and to compare these1

We thank Professors M. Fukao (Japan Center for Economic Research and Keio University) and Haruo Horaguchi(Hosei University) for insightful comments. Professors K. Fukao (Hitotsubashi University), Keiko Itoh (Senshu
University) and other members participating in the project titled ‘Productivity and Organizational Capital in East
Asian Countries’ in Japan Center for Economic Research gave us helpful comments to improve our paper. We also
thank Mr. Edamura and Mr. Kawakami for excellent research assistances.
2
Economic Report of the President 2007 wrote ‘Only when they (businesses) made intangible investments tocomplement their IT investments did productivity growth really take off.’ (p. 56)
3
See Marrano, Haskel and Wallis (2007) for the UK, Hao, Manole and van Ark (2008) for Germany and France, andFukao et al. (2008) for Japan. Productivity Commission in Melbourne is now estimating intangible investment inAustralia.

1among advanced countries.4 In addition, these investments depend on management practices at
the firm level. Therefore, recent studies on intangible investment focused on management
practices on human resource management and organizational reform at the firm level using
micro-data.
Black and Lynch (2005) categorized organizational capital into three components;
accumulation in human capital, how employees’ voices are reflected in the workplace, andorganizational design. Bloom and Van Reenen (2007) examined the effect of management
practices on firm performance based on the interview survey of plant managers. Management
practices were given scores based on interview results and the score are included as
independent variables when they estimated production function. According to their study, theU.S. firms got the highest score of the firms in four countries (France, Germany, the UK, theUS). They thought that the low score in European firms was partly explained by weakcompetition and the prevalence of many family-owned firms.
In Japan, Kurokawa and Minetaki (2006), Kanamori and Motohashi (2006), andShinozaki (2007) examined the effects of organizational reform associated with IT investment
on firm performance by using the Basic Survey on Business Enterprise Activities and IT
Workplace Survey. Their studies suggested that organizational reform associated with IT
investment partly improved firm performance.
While our paper also focuses on the effect of organizational reform and human resource
management on firm performance, there are three different features from the previous studies inJapan. First, we examine more comprehensive management practices on organizational andhuman resource management than the previous studies in Japan. Second, we study the effect ofmanagement practice on firm performance using not only the official survey but also theinterview surveys following Bloom and Van Reenen (2007). Third, we compare the interview
scores and firm performances between Japanese and Korean firms.
In the next section, we will explain our interview survey. Though our interview survey
basically follows Bloom and Van Reenen (2007), we incorporated some questions which were
not included in Bloom and Van Reenen (2007) to capture some unique features of Japanese andKorean firms. In the third section, we will construct a management score by quantifying theinterview results of Japanese and Korean firms and compare the management practices in firms
in both countries. In the fourth section, using management scores and the financial statements inJapanese and Korean firms, we estimate production function and examine the effect of

4
For example, CHS (2006) does not count for the investment in firm specific human capital through on-the–job
training while this investment is very important in Japanese firms.

2

management practice on firm performance. In the last section, we summarize our studies.
2. The Interview Surveys in Japan and Korea

Why did we conduct the interview survey?
Recently, qualitative factors in management practices in firms which are not captured by
official surveys have been affecting firm performance. At first, many researchers conducted
their own mailed surveys to examine these qualitative factors within firms. However, theresponse rates to the survey were very low. For example, the response rate to the mailed survey
conducted by Ichikowski (1990) -- who tried to examine the effect of human resource
management on Tobin’s Q or Labor productivity-- was only 10%. In the US, the researchers andstatistical administrations have adopted the interview survey to improve the response rate. For
example, the response rate to the interview survey in National Employers Survey conducted by
National Bureau of Census was 66% in the manufacturing sector and 61% in the
non-manufacturing sector. Much of the recent researches on human resource management has
also adopted the interview survey. Bloom and Van Reenen (2007) conducted interview surveys
by telephone to examine management practices in firm and attained the 54% response rate.
Following the above experiences, we also decided to conduct an interview survey.

How did we design our interview survey?
In our research, we followed the interview survey conducted by Bloom and Van Reenen.
However, we conducted the interview survey by meeting the managers in planning division offirms, while Bloom and Van Reenen (2007) conducted the survey by telephone. The reason why
we conducted face-to-face interview survey is that we were concerned about low response rates.
In Japan and Korea, when we want to know qualitative features in firms, face-to-facecommunication is a more useful tool than telephone interviews.
Bloom and Van Reenen (2007) classified their eighteen interview questions into four
categories; product management, monitoring, the firm’s target, and incentives for workers.
While their survey was extended to only manufacturing plants, our survey covered not only
manufacturing firms but also firms in the service sector. Thus, we excluded questions about
product management, because only manufacturing firms can respond to them. Instead, we asked
questions about organizational change and on-the-job training. As a result, we can classify ourquestions into two categories; organizational capital and human resource management.
The first category covers the first four questions (from Question 1 to 4). In this category,3

we aim to examine the managerial vision of the firm, the organizational goal, communication
within a firm, and organizational reform. In the rest of the questions (from Questions 5 to 13)
which focuses on human resource management, we added a question about on-the-job training(OJT) to the questions in Bloom and Van Reenen (2007), because Japanese and Korean firms
make much use of the effects of OJT on firm performance. The detailed interview questions aredescribed in Appendix 1.
We quantify the responses of the manager to the above questions as follows. In eachquestion, we have three sub questions. If the firm manager responds a negatively to the first
sub-question, we give the response a 1 and move to the next question. If he responds positively
to the first sub-question, we move to the second sub-question. If the manager responds
negatively to the second sub-question, we mark a 2 and move to the next question. If he
responds positively to the second sub-question, we move to the last sub-question. In the last
sub-question, the positive response of the manager is given a 4, while a negative response isgiven a 3.
Our survey focused on four industries in the manufacturing sector (Electric machineryindustry, Information and communication equipment industry, Motor vehicle industry, andPrecision machinery industry) and three industries in the service sector (Internet-based services
and information services, Media activities, and Retail service). In Japan, we obtained the datafrom 151 firms headquartered in the Tokyo area. The response rate in Japan was 54.9%. In
Korea, we obtained the data of 350 firms of 591 firms, thus the response rate was 59.2%5.
3. Management Practices in Japan and Korea

In this section, we compare management practices between Japanese and Korean firms
based on the interview surveys.6 Table 1 describes the distribution of firms in Japan and Korea
by industry. While the share of firms in the manufacturing sector in Japan is 25.8%, the share ofmanufacturing firms in Korea is 84.9%. In particular, the number of firms in the motor vehicles
industry in Korea amounts to 40% of the total number of firms. In Japan, the share of firms in
the information services is 46.4%.

5

We have already obtained the data from 573 Japanese firms headquartered in not only Tokyo area but also the rest of Japan.
However, we focus on the results in 151 firms because we have not obtained financial data of the rest of the firms in Japan. The
Japanese survey was conducted from February, 2008 to March, 2008. The Korean Survey was conducted from May, 2008 to July,
2008.
6
The results in the Japanese interview survey are based on Miyagawa et al. (2008).

4

Table 1．The Distribution of Firms in Japan and Korea by Industry

Industry

Japan

Korea

Number of Firms

Number of Firms

Electiric machinery9( 6.0% )51( 14.6% )Information and communication
machinery19( 12.6% )96( 27.4% )Motor vehicles

7( 4.6% )140( 40.0% )Precision machinery4( 2.6% )10( 2.9% )15( 4.3% )11( 3.1% )Internet-based services
70( 46.4% )Information service
Media activities12( 7.9% )9( 2.6% )Retail30( 19.9% )18( 5.1% )

Total

151

350

Table 2 shows the distribution of firms in Japan and Korea by size measured by the
number of employees. In Japan, the number of firms with less than 10,000 in the survey is 144of the total 151. Of these 66 are small and medium-sized firms (with less than 300 employees).
In Korea, the number of firms with less than 10,000 is 348 out of the 350 and 260 of which aresmall and medium-sized firms.

Table 2．The Distribution of Firms in Japan and Korea by Employee SizeJapan
Industry

Korea

50-99

100299300499500999

1000-

Total

50-99

100299300499500999

1000-

Total

Manufacturing

3

8

4

5

19

39

42

180

31

30

14

297

Information related
services

20

31

8

8

15

82

5

22

3

0

5

35

Retail

1

3

9

6

11

30

0

11

1

0

6

18

Total

24

42

21

19

45

151

47

213

35

30

25

350

5

As explained in the previous section, we score the management practices based on theinterview survey. Figure 1-1 shows the distribution of scores in all firms in Japan and Korea. In
Japan, the average score for all firms is 2.73 and the variance is 0.21. Many firms are distributed
between 2.5 and 3.5. In Korea, the average score is 2.33 and the variance is 0.32. The averagescore in Korea is lower than that in Japan and the variance of scores in Korea is higher than thatin Japan. Most of the Korean firms are in the range from 1.5 to 2.5.
Figure 1 – 1 Distribution of Management Scores (All firms)
b. Korea

0

0

.2

.2

.4

Density.4

Density
.6

.6

.8

1

.8

a. Japan

1

2

3

4

1

2

3

4

Score

Score

However, the difference in the distribution of scores in Japan and Korea may reflect thedifference in the industry structure in the survey. Thus, we examine the distribution of scores byindustry. Figure 1-2, 1-3, and 1-4 show the distribution of scores in the manufacturing sector,
the information-related services sector, and the retail sector respectively.7 In Figure 1-2, we findthat the average score in the Japanese manufacturing sector is almost same as the average score
in all firms. We also find that the distribution of scores in all firms in Korea is affected by the
distribution of scores in the manufacturing sector. While the average scores in the Korean
manufacturing and information-related services sectors are smaller than those in thecorresponding sectors in Japan, the average score in the retail sector in Korea is almost same asthat in Japan.

7

The information-related services sector consists of internet-based services and information services, and media
activities.

6

Figure 1 – 2 Distribution of Management Scores (Manufacturing firms)
b. Korea

0

0

.2

.5

.4

DensityDensity
.6

1

.8

1

1.5

a. Japan

1

2

3

4

1

2

3

4

Score

Score

Figure 1 – 3 Distribution of Management Scores (Information-related firms)
b. Korea

0

0

.2

.2

.4

Density.4

Density
.6

.6

.8

1

.8

a. Japan

1

2

3

4

1

2

3

4

Score

Score

Figure 1 – 4 Distribution of Management Scores (Retail firms)
b. Korea

0

0

.5

.5

DensityDensity

1

1

1.5

1.5

a. Japan

1

2

3

4

1

2

3
Score

Score

7

4

We classify our interview questions into two categories: one pertains to questions aboutorganizational capital and the other is questions about human resource management. We
describe the distribution of scores in organizational capital from Figure 2-1 to Figure 2-4. In
both countries, the average score in organizational capital is higher than that of all questions
together. Comparing the scores in organizational capital between Japan and Korea, Japanesescores are higher than Korean scores. These results imply that the organizational targets
penetrate into all employees in Japan more than in Korea, or Japanese firms improve theorganizational structure more aggressively than Korean firms, because high scores inorganizational capital mean the transparency of organizational goals or aggressive
organizational reform.

Figure 2 – 1 Distribution of Management Scores in Organizational Capital(All firms)
b. Korea

0

0

.2

.2

.4

.4

Density.6

Density
.6

.8

.8

1

1

a. Japan

1

2

3

4

1

2

3

4

Score

Score

Figure 2 – 2 Distribution of Management Scores in Organizational Capital(Manufacturing firms)
b. Korea

0

0

.2

.5

.4

Density.6

Density

1

.8

1

1.5

a. Japan

1

2

3

4

1

2

3
Score

Score

8

4

Figure 2 – 3 Distribution of Management Scores in Organizational Capital(Information-related firms)
b. Korea

0

0

.2

.5

.4

DensityDensity
.6

1

.8

1

1.5

a. Japan

1

2

3

4

1

2

3

4

Score

Score

Figure 2 – 4 Distribution of Management Scores in Organizational Capital(Retail firms)
b. Korea

0

0

.5

.5

DensityDensity

1

1

1.5

1.5

a. Japan

1

2

3

4

1

2

3

4

Score

Score

We also show the distribution of scores in human resource management from Figure 3-1
to Figure 3-4. The average scores in human resource management are lower than those inorganizational capital in both countries. The average scores in Japanese firms are higher thanthose in Korean firms in each sector. In Korea, the low score in the manufacturing sector affects
the score in all firms. As high score in this category means the flexibility of human resource
management, the results imply that Japanese firms adopt more flexible management in humancapital than Korean firms.

9Figure 3 – 1 Distribution of Management Scores in Human Capital (All firms)
b. Korea

0

0

.2

.2

Density.4

Density
.4

.6

.6

.8

.8

a. Japan

1

2

3

4

1

2

3

4

Score

Score

Figure 3 – 2 Distribution of Management Scores in Human Capital(Manufacturing firms)
b. Korea

0

0

.2

.2

.4

Density.4

Density
.6

.8

.6

1

.8

a. Japan

1

2

3

4

1

2

3

4

Score

Score

Figure 3 – 3 Distribution of Management Scores in Human Capital(Information-related firms)
b. Korea

0

0

.2

.2

.4

Density.4

Density
.6

.6

.8

1

.8

a. Japan

1

2

3

4

1

2

3
Score

Score

10

4

Figure 3 – 4 Distribution of Management Scores in Human Capital (Retail firms)
b. Korea

0

0

.5

.5

DensityDensity

1

1

1.5

1.5

a. Japan

1

2

3

4

1

2

3

4

Score

Score

As seen in Table 2, the Korean sample holds more small and medium sized firms than theJapanese sample. Thus, we examine the distribution of average score in both countries by size in
Figure 4-1 and 4-2. In Figure 4-1 where the distributions of average scores in firms with morethan 300 employees are described, the distribution in Japanese firms is similar to that in Korean
firms. While the mean in the distribution in Japanese firms is 2.61, that in Korean firms is 2.57.
The median value and variance in Japanese firms are almost same as those in Korean firms.

Figure 4 – 1 Distribution of Total Scores of firms with 300 or more employees (All firms)
b. Korea

0

0

.2

.5

Density.4

Density

1

.6

.8

1.5

a. Japan

1

2

3

4

1

2

3
Score

Score

11

4

Figure 4 – 2 Distribution of Total Scores of firms with less than 300 employees (All firms)
b. Korea

0

0

.2

.2

.4

Density.4

Density
.6

.6

.8

.8

1

a. Japan

1

2

3

4

1

2

3

4

Score

Score

However, as for the firms with less than 300 employees, we find different distributions inaverage scores between Japanese firms and Korean firms. In contrast to the relatively high meanin the distribution in Japanese firms (2.88), the mean in the distribution in Korean firms is 2.25.
This gap in the mean in the distribution in both countries is explained by the difference in the
distribution in the average score in human capital. The mean in the average score in humancapital in Korean firms is very low (2.00), while the corresponding mean in Japanese firms is
2.70. These results imply that management practices in human resource management in Koreansmall and medium sized firms are more conservative than that in small and medium sized
Japanese firms.8
4. Do Management Practices Affect Firm Performance?

Using the management scores explained in the previous section, we examine the effect ofmanagement practice on firm performance. Following Bloom and Van Reenen (2007) we
estimate the following equations.

ln Yi = cos t. + α1 ln Li + α 2 ln K i + α 3 ln M i + α 4 Z i +α5 X i
(1)

8

2

2

k =1

k =1

+ ∑ μ k Dummyki + ∑ λk Dummyki * Z i + ε iHowever, all differences in means in distributions between Japanese firms and Korean firms are not significant.

122FPi = const. + ∑ β jWij + β 3 Z i + β 4 X i
j =1

(2)

2

2

k =1

k =1

+ ∑ μk Dummyki + ∑ λk Dummyki * Z i +ui

Equation (1) is a standard production function with a score of management practices (Z).
Y is output, L is labor input, K is capital input, and M is intermediate input. Because we haveinformation about recent organizational reform from the interview survey, we make two types ofdummy variables; one is a dummy where the case that organizational reform was conducted in2005 and 2006 is 1(Dummy 1 (k=1)) and the other is a dummy where the case thatorganizational reform was conducted before 2004 is 1 (Dummy 2 (k=2)). Thus, the case thatorganizational reform has not been conducted in the recent 10 years is 0 in each case. We
include a cross term between Z and a dummy variable in the estimation. We also include anindustry dummy in the estimation. X is the logarithm of employees which represents a control
variable.
In Equation (2), the measure of firm performance (FP) is a dependent variable. We takelabor productivity or TFP as a measure of firm performance. Following Bloom and Van Reenen(2007), we measure TFP estimating the production function with three production factors (L, K,
M). W represents capital labor ratio (K/L) and the intermediate input labor ratio (M/L).9 We
include dummy variables used in Equation (1).
As for Z, we use two types of variables as explanatory variables; one is an average scorein each firm and the other is the first factor calculated by factor analysis. If some of thequestions focus on specific management factor in our survey, an average score may exaggerate
the specific management factor. Therefore, using factor analysis, we extract a neutral measure
which reflects each management factor evenly and include it in the estimation. The results infactor analysis in Japan and Korea are shown in Appendix 2. Because Kaiser=Meyer= Olkinmeasures in Japan and Korea are 0.737 and 0.873 in Japan and Korea respectively, theapplication of factor analysis is appropriate in both countries.
In Table 3-1, and 3-2, we estimate Equations (1) and (2) using the average score in allquestions in the interview surveys in Japan and Korea. Because we have only cross-section data,
estimation method is OLS. In Table 3-1, the average score does not show an expected sign and asignificant effect on firm performance. When we include organizational reform dummies(Dummy 1 and Dummy 2) the cross term between Dummy 2 and the average scores shows a
9When TFP is a dependent variable, we exclude W.

13

positive sign and a significant effect on firm performance, while the coefficient in Dummy 2 isnegative and significant. This result implies that only firms which mark a high score due to theorganizational reform can improve their performances in Japan. According to our calculation
based on the estimated coefficients, the critical score which improves firm performance afterorganizational reform is 3.06 In Table 3-2, we do not find any significant effect of the averagescore on firm performance in Korean firms. In contrast to Japanese firms, any organizational
reform does not affect firm performance.
As seen in Section 3, we divide the interview scores into two categories; those inorganizational capital and those in human capital. Table 4-1 and 4-2 show the estimation results
using the average score in organizational capital. In Table 4-1, the average score inorganizational capital shows a negative and significant sign when the dependent variable isoutput or labor productivity. The results imply that the manifestation of organizational goals orcommunication within organization does not contribute to firm performance in Japan. As in
Table 3-1, the cross term between Dummy 2 and the average score has a positive sign and asignificant effect on firm performance, while the coefficient in Dummy 2 is negative andsignificant. Organizational reform contributes to performance in a firm with relatively highscore.
In Table 4-2, we find the similar results to Table 4-1. We find a negative and significant
sign on the coefficients in an average score in organizational capital. As for organizational
reform, the coefficient in Dummy 2 is positive and significant when labor productivity is adependent variable.
In Table 5-1 and 5-2, we examine the effects of the average score with respect to humancapital on firm performance in Japan and Korea. The results in Table 5-1 are similar to those in
Table 3-1. The average score in human capital does not affect firm performance whileorganizational reform contributes to performance in firms with relatively high score. In Table
5-2, organizational reforms affect labor productivity. The coefficient in Dummy 2 is positiveand significant when labor productivity is a dependent variable. The cross term between
Dummy 1 and the average score is also positive and significant, though the coefficient inDummy 1 is negative and significant in the case that labor productivity is a dependent variable.
These results imply that organizational reform in firms may improve labor productivity.
Finally, we examine the effect of the first factor of factor analysis using all interview
scores on firm performance in Table 6-1 and 6-2. While the results in Japanese firms (Table 6-1)
are similar to the previous results, we find that the first factor affects firm performance
significantly in all cases (Table 6-2). From the factor analysis, this measure represents human14

resource management. The results imply that the measure describing human resource
management in Korean firms contributes to firm performance.
In sum, in Japanese firms, the interview score describing organizational and humanresource management does not affect firm performance directly. It is likely that the
manifestation of organizational goal and frequent communication within a firm show a negative
contribution to firm performance. However, organizational reform contributes to theperformance of firms with relatively high score. In contrast to the Japanese firms, we find theclear evidence that when we take the first factor representing human resource management fromthe factor analysis, the measure contributes to the improvement in Korean firm performance.

15

16
0.922 ***
[6.232]
138
0.984
0.983
2336

-0.107 **[-2.179]-0.025[-1.614]0.255 ***
[7.249]0.800 ***
[27.289]-0.058[-1.054]0.910 ***
[6.101]
138
0.984
0.983
1737

-0.040[-0.842]-0.044[-0.684]-0.115 **[-2.305]-0.025[-1.623]0.251 ***
[7.369]0.802 ***
[28.169]lnY-0.043[-0.793]

R2
Adusted-R2
F value
Note 1. Robust t statistics in brackets.
2. * significant at 10%; ** significant at 5%; *** significant at 1%.

Observations

Constantln(M/L)ln(K/L)

lnM

lnL

lnK

Retail dummy

Dummy 2

Dummy 1

Average score × Dummy 2

Average score × Dummy 1

Average score (all scores)

Table 3-1 Estimation results of production function (Japanese firms)

0.884 ***
[4.602]
138
0.984
0.983
1473

-0.030[-0.441]-0.111[-1.027]0.309 **
[2.329]0.261[0.952]-0.946 **[-2.461]-0.110 **[-2.214]-0.024[-1.620]0.250 ***
[7.391]0.802 ***
[28.460]-0.025[-1.614]0.800 ***
[27.289]
0.922 ***
[6.232]
138
0.904
0.900
269

0.031 *
[1.870]-0.107 **[-2.179]-0.058[-1.054]-0.025[-1.623]0.802 ***
[28.169]
0.910 ***
[6.101]
138
0.904
0.899
198

0.028 *
[1.787]-0.040[-0.842]-0.044[-0.684]-0.115 **[-2.305]ln(Y/L)-0.043[-0.793]-0.024[-1.620]0.802 ***
[28.460]
0.884 ***
[4.602]
138
0.907
0.901
160

0.027 *
[1.755]-0.030[-0.441]-0.111[-1.027]0.309 **
[2.329]0.261[0.952]-0.946 **[-2.461]-0.110 **[-2.214]0.922 ***
[6.232]
138
0.490
0.471
37

-0.107 **[-2.179]-0.038 **[-2.470]0.036[1.013]-0.084 ***[-2.855]-0.058[-1.054]0.846 ***
[5.532]
138
0.362
0.338
23

-0.127 ***[-9.053]-0.066[-1.218]-0.071[-0.986]-0.138 ***[-3.134]

TFP(OLS)-0.012[-0.199]17
1.598 ***
[6.87]
342
0.981
0.981
2565

-0.048[1.45]
0.015[0.98]
0.151 ***
[6.24]
0.861 ***
[38.32]0.016[0.99]

1.598 ***
[6.839]
342
0.981
0.981
1836

0.003
[0.105]0.035[1.077]-0.048[-1.413]0.014[0.955]0.150 ***
[6.218]0.862 ***
[37.91]lnY
0.014[0.837]

Observations
R2
Adusted-R2
F value
Note 1. Robust t statistics in brackets.
2. * significant at 10%; ** significant at 5%; *** significant at 1%.

Constantln(M/L)ln(K/L)

lnM

lnL

lnK

Retail dummy

Dummy 2

Dummy 1

Average score × Dummy 2

Average score × Dummy 1

Average score (all scores)

Table 3-2 Estimation results of production function (Korean firms)

1.594 ***
[6.79]
342
0.981
0.981
1465

0.012
[0.68]-0.022[0.35]
0.045[0.94]
0.061[0.35]-0.080[0.67]-0.046[1.37]
0.015[0.96]
0.149 ***
[6.21]
0.862 ***
[37.91]0.021[1.38]
0.851 ***
[38.08]1.639 ***
[7.08]
342
0.948
0.947
486

0.027 **
[2.11]-0.052[1.52]

0.024[1.50]

0.021[1.348]0.851 ***
[37.65]
1.638 ***
[7.043]
342
0.948
0.947
345

0.027 **
[2.097]0.005[0.189]0.021[0.689]-0.051[-1.485]ln(Y/L)
0.022[1.343]0.020[1.34]
0.852 ***
[37.64]1.625 ***
[6.95]
342
0.948
0.946
271

0.027 **
[2.06]

0.026[1.38]-0.045[0.71]
0.015[0.39]
0.121[0.69]-0.019[0.20]-0.051[1.47]-0.028[0.36]
342
0.005-0.0041.12-0.001[0.09]-0.048[1.55]

0.016[0.95]-0.026[-0.329]342
0.007-0.0080.95-0.001[-0.105]

0.003[0.115]0.035[1.096]-0.047[-1.518]

TFP(OLS)
0.014[0.801]-0.021[0.25]
342
0.009-0.0120.79-0.002[0.14]

0.013[0.67]-0.022[0.35]
0.044[0.93]
0.061[0.35]-0.078[0.66]-0.045[1.45]

18

0.973 ***
[6.682]
138
0.984
0.983
2436

-0.111 **[-2.268]-0.023[-1.532]
0.256 ***
[7.870]0.799 ***
[27.724]-0.075 *[-1.769]

0.961 ***
[6.597]
138
0.984
0.983
1802

-0.024[-0.507]-0.023[-0.340]-0.115 **[-2.306]-0.023[-1.551]
0.253 ***
[8.006]0.800 ***
[28.388]lnY-0.064[-1.497]

Observations
R2
Adusted-R2
F value
Note 1. Robust t statistics in brackets.
2. * significant at 10%; ** significant at 5%; *** significant at 1%.

Constantln(M/L)ln(K/L)

lnM

lnL

lnK

Retail dummy

Dummy 2

Dummy 1

Average score × Dummy 2

Average score × Dummy 1

Average score (organizational capital)

0.994 ***
[5.560]
138
0.984
0.983
1453

-0.073[-1.266]-0.049[-0.572]
0.268 **
[2.309]0.123[0.547]-0.856 **[-2.434]-0.106 **[-2.091]-0.021[-1.412]0.253 ***
[7.984]0.797 ***
[28.623]-0.023[-1.532]
0.799 ***
[27.724]
0.973 ***
[6.682]
138
0.905
0.901
280

0.031 **
[2.113]-0.111 **[-2.268]-0.075 *[-1.769]

Table 4-1 Estimation results using average score with respect to organizational capital (Japanese firms)-0.023[-1.551]0.800 ***
[28.388]0.961 ***
[6.597]
138
0.905
0.900
204

0.030 **
[2.060]-0.024[-0.507]-0.023[-0.340]-0.115 **[-2.306]ln(Y/L)-0.064[-1.497]-0.021[-1.412]0.797 ***
[28.623]
0.994 ***
[5.560]
138
0.907
0.901
163

0.029 **
[2.009]-0.073[-1.266]-0.049[-0.572]
0.268 **
[2.309]0.123[0.547]-0.856 **[-2.434]-0.106 **[-2.091]

0.973 ***
[6.682]
138
0.496
0.477
39

-0.111 **[-2.268]-0.036 **[-2.387]
0.036[1.110]-0.085 ***[-2.943]-0.075 *[-1.769]

0.922 ***
[6.461]
138
0.366
0.342
24

-0.124 ***[-9.302]-0.050[-0.900]-0.048[-0.636]-0.138 ***[-3.088]

TFP(OLS)-0.049[-0.951]0.954 ***
[4.924]
138
0.380
0.346
22

-0.124 ***[-9.300]-0.062[-0.900]-0.044[-0.402]0.307 **
[2.091]
0.082[0.284]-0.999 **[-2.279]-0.130 ***[-2.768]19

1.683 ***
[7.69]
342
0.981
0.981
2824

-0.037[1.02]
0.014[0.97]
0.152 ***
[6.33]
0.862 ***
[38.17]-0.028 *[1.69]

1.681 ***
[7.662]
342
0.981
0.981
2004

0.006
[0.201]
0.042[1.311]-0.036[-1.010]0.014[0.948]0.151 ***
[6.308]0.863 ***
[37.80]lnY-0.028 *[-1.728]

Observations
R2
Adusted-R2
F value
Note 1. Robust t statistics in brackets.
2. * significant at 10%; ** significant at 5%; *** significant at 1%.

Constantln(M/L)ln(K/L)

lnM

lnL

lnK

Retail dummy

Dummy 2

Dummy 1

Average score × Dummy 2

Average score × Dummy 1

Average score (organizational capital)

1.672 ***
[7.65]
342
0.981
0.981
1558

-0.028[1.43]
0.036[0.99]-0.041[0.91]-0.081[0.91]
0.148[1.17]-0.036[1.01]
0.015[0.98]
0.149 ***
[6.23]
0.863 ***
[37.68]0.020[1.37]
0.853 ***
[38.07]1.746 ***
[7.96]
342
0.948
0.947
504

0.030 **
[2.33]-0.036[0.98]-0.034 **[2.06]

Table 4-2 Estimation results of production function with respect to organizational capital (Korean firms)

0.020[1.331]0.853 ***
[37.69]1.742 ***
[7.913]
342
0.948
0.947
360

0.030 **
[2.301]0.011[0.383]0.031[1.074]-0.036[-0.967]ln(Y/L)-0.034 **[-2.073]

0.021[1.37]
0.854 ***
[37.60]1.728 ***
[7.87]
342
0.948
0.947
286

0.029 **
[2.23]-0.033 *[1.69]
0.050[1.38]-0.060[1.45]-0.108[1.24]
0.187 *
[1.67]-0.036[0.97]

0.066[1.05]
342
0.011
0.002
1.89

0.001
[0.06]-0.036[1.08]-0.028 *[1.70]

0.067[1.059]
342
0.015
0.000
1.39

0.000
[0.0138]

0.006[0.210]0.042[1.333]-0.035[-1.070]

TFP(OLS)-0.028 *[-1.739]0.070[1.06]
342
0.018-0.0031.19

0.000[0.04]-0.028[1.45]
0.036[1.00]-0.040[0.91]-0.080[0.90]
0.145[1.16]-0.035[1.05]

20
0.770 ***
[6.240]
138
0.984
0.983
2319

-0.110 **[-2.282]-0.026[-1.654]0.244 ***
[7.000]0.806 ***
[27.847]

0.011[0.245]0.800 ***
[6.106]
138
0.984
0.983
1736

-0.049[-0.962]-0.057[-0.951]-0.118 **[-2.436]-0.026[-1.638]0.241 ***
[7.236]0.807 ***
[28.543]lnY
0.008[0.190]R2
Adusted-R2
F value
Note 1. Robust t statistics in brackets.
2. * significant at 10%; ** significant at 5%; *** significant at 1%.

Observations

Constantln(M/L)ln(K/L)

lnM

lnL

lnK

Retail dummy

Dummy 2

Dummy 1

Average score × Dummy 2

Average score × Dummy 1

Average score (Human capital)

0.710 ***
[4.532]
138
0.984
0.983
1454

0.041
[0.925]-0.140[-1.507]
0.198 **
[2.229]0.301[1.381]-0.564 **[-2.370]-0.125 ***[-2.656]-0.029 *[-1.813]0.239 ***
[7.452]0.812 ***
[28.868]0.024[1.451]-0.110 **[-2.282]

0.011[0.245]-0.026[-1.654]0.806 ***
[27.847]0.770 ***
[6.240]
138
0.903
0.899
255

Table 5-1 Estimation results using average score with respect to human capital (Japanese firms)-0.026[-1.638]
0.807 ***
[28.543]0.800 ***
[6.106]
138
0.904
0.899
194

0.023
[1.460]-0.049[-0.962]-0.057[-0.951]-0.118 **[-2.436]ln(Y/L)
0.008[0.190]-0.029 *[-1.813]0.812 ***
[28.868]
0.710 ***
[4.532]
138
0.907
0.901
159

0.022
[1.475]0.041[0.925]-0.140[-1.507]
0.198 **
[2.229]0.301[1.381]-0.564 **[-2.370]-0.125 ***[-2.656]0.770 ***
[6.240]
138
0.486
0.467
36

-0.110 **[-2.282]-0.039 **[-2.485]0.024[0.701]-0.078 ***[-2.692]

0.011[0.245]0.751 ***
[6.171]
138
0.365
0.341
24

-0.132 ***[-9.325]-0.066[-1.148]-0.072[-1.069]-0.141 ***[-3.276]

TFP(OLS)
0.037[0.786]0.684 ***
[4.683]
138
0.380
0.346
25

-0.133 ***[-9.698]

0.066[1.359]-0.127[-1.227]
0.177[1.527]0.249[1.029]-0.522[-1.636]-0.146 ***[-3.441]

21

1.623 ***
[7.31]
342
0.981
0.981
2551

-0.042[1.15]
0.014[1.00]
0.152 ***
[6.28]
0.862 ***
[37.79]-0.005[0.25]

1.619 ***
[7.255]
342
0.981
0.981
1822

0.008
[0.276]0.039[1.176]-0.042[-1.140]0.014[0.972]0.151 ***
[6.260]0.863 ***
[37.44]lnY-0.005[-0.258]

Observations
2
R
2
Adusted-R
F value
Note 1. Robust t statistics in brackets.
2. * significant at 10%; ** significant at 5%; *** significant at 1%.

Constantln(M/L)ln(K/L)

lnM

lnL

lnK

Retail dummy

Dummy 2

Dummy 1

Average score × Dummy 2

Average score × Dummy 1

Average score (Human capital)

1.608 ***
[7.20]
342
0.981
0.981
1428

-0.007[0.30]
0.055[1.26]-0.053[1.06]-0.105[1.33]
0.152[1.26]-0.041[1.12]
0.014[0.96]
0.150 ***
[6.28]
0.864 ***
[37.39]0.020[1.39]
0.852 ***
[37.64]
1.669 ***
[7.49]
342
0.947
0.947
498

0.030 **
[2.30]-0.044[1.18]-0.004[0.19]

Table 5-2 Estimation results of production function with respect to human capital (Korean firms)

0.020[1.352]0.853 ***
[37.28]1.664 ***
[7.424]
342
0.947
0.946
353

0.030 **
[2.276]0.013[0.482]0.027[0.877]-0.044[-1.169]ln(Y/L)-0.004[-0.185]0.020[1.34]
0.855 ***
[37.30]1.648 ***
[7.35]
342
0.948
0.947
289

0.030 **
[2.29]-0.005[0.24]
0.068 *
[1.72]-0.074[1.63]-0.126 *[1.77]
0.186 *
[1.79]-0.043[1.14]

0.007[0.09]
342
0.003-0.0060.71

0.001[0.08]-0.041[1.22]-0.005[0.24]

0.006[0.0810]342
0.006-0.0090.78

0.001[0.0440]0.008[0.287]0.039[1.194]-0.041[-1.220]

TFP(OLS)-0.005[-0.248]

0.009[0.13]
342
0.874
0.013
-0.01

0.001
[0.05]-0.007[0.29]
0.055[1.30]-0.052[1.06]-0.104[1.34]
0.151[1.27]-0.040[1.19]

22
0.781 ***
[5.706]
138
0.984
0.983
2294

-0.107 **[-2.173]-0.025 *[-1.675]0.250 ***
[6.903]0.803 ***
[27.607]-0.006[-0.393]

0.806 ***
[5.905]
138
0.984
0.983
1731

-0.050[-1.001]-0.058[-0.947]-0.116 **[-2.329]-0.025[-1.656]
0.248 ***
[7.104]0.804 ***
[28.340]lnY-0.007[-0.438]

Observations
R2
Adusted-R2
F value
Note 1. Robust t statistics in brackets.
2. * significant at 10%; ** significant at 5%; *** significant at 1%.

Constantln(M/L)ln(K/L)

lnM

lnL

lnK

Retail dummy

Dummy 2

Dummy 1

Average score × Dummy 2

Average score × Dummy 1

The first factor (all scores)

0.805 ***
[6.010]
138
0.985
0.984
1518

-0.002[-0.134]-0.035[-1.202]0.099 ***
[2.934]-0.057[-1.103]-0.075[-1.474]-0.121 **[-2.469]-0.025 *[-1.691]0.247 ***
[7.186]0.804 ***
[28.925]0.028[1.605]-0.107 **[-2.173]-0.006[-0.393]-0.025 *[-1.675]
0.803 ***
[27.607]0.781 ***
[5.706]
138
0.903
0.899
261

Table 6-1 Estimation results using the first factor as an explanatory variable (Japanese firms)-0.025[-1.656]0.804 ***
[28.340]0.806 ***
[5.905]
138
0.904
0.899
196

0.027
[1.615]-0.050[-1.001]-0.058[-0.947]-0.116 **[-2.329]ln(Y/L)-0.007[-0.438]-0.025 *[-1.691]
0.804 ***
[28.925]0.805 ***
[6.010]
138
0.908
0.902
162

0.027
[1.656]-0.002[-0.134]-0.035[-1.202]0.099 ***
[2.934]-0.057[-1.103]-0.075[-1.474]-0.121 **[-2.469]

0.781 ***
[5.706]
138
0.487
0.467
38

-0.107 **[-2.173]-0.038 **[-2.535]
0.031[0.849]-0.081 ***[-2.785]-0.006[-0.393]0.825 ***
[7.864]
138
0.362
0.338
23

-0.129 ***[-8.924]-0.068[-1.185]-0.074[-1.081]-0.139 ***[-3.165]

TFP(OLS)
0.001[0.065]0.823 ***
[8.012]
138
0.386
0.353
26

-0.128 ***[-9.220]0.002[0.119]-0.028[-0.861]
0.112 **
[2.606]-0.074[-1.257]-0.093[-1.606]-0.145 ***[-3.282]

23
1.675 ***
[7.46]
342
0.981
0.981
2539

-0.053[1.64]
0.015[1.04]
0.148 ***
[6.10]
0.859 ***
[38.76]0.012 **
[2.24]

1.672 ***
[7.409]
342
0.981
0.981
1814

0.000
[0.00493]
0.031[0.969]-0.052[-1.622]0.015[1.021]0.148 ***
[6.089]0.860 ***
[38.36]lnY
0.011 **
[2.164]

Observations
R2
Adusted-R2
F value
Note 1. Robust t statistics in brackets.
2. * significant at 10%; ** significant at 5%; *** significant at 1%.

Constantln(M/L)ln(K/L)

lnM

lnL

lnK

Retail dummy

Dummy 2

Dummy 1

Average score × Dummy 2

Average score × Dummy 1

The first factor (all scores)

1.670 ***
[7.39]
342
0.981
0.981
1453

0.011 *
[1.88]-0.004[0.26]
0.003[0.22]
0.002[0.06]
0.029[0.86]-0.052[1.60]
0.015[1.03]
0.147 ***
[6.11]
0.860 ***
[38.27]

Table 6-2 Estimation results using the first factor as an explanatory variable (Korean firms)

0.021[1.45]
0.849 ***
[38.58]1.733 ***
[7.75]
342
0.948
0.947
486

0.023 *
[1.81]-0.056 *[1.69]

0.013 **
[2.58]

0.021[1.424]0.849 ***
[38.17]1.729 ***
[7.685]
342
0.948
0.947
345

0.023 *
[1.799]0.004[0.158]0.019[0.605]-0.055 *[-1.663]ln(Y/L)0.013 **
[2.491]0.021[1.43]
0.850 ***
[38.09]1.728 ***
[7.66]
342
0.948
0.947
271

0.023 *
[1.77]

0.014 **
[2.31]-0.009[0.56]-0.003[0.27]
0.008[0.25]
0.020[0.62]-0.055 *[1.65]

0.031[0.49]
342
0.015
0.006
2.52

-0.005[0.45]-0.052 *[1.75]

0.011 **
[2.06]

0.030[0.468]
342
0.017
0.002
1.76

-0.006[-0.469]0.001[0.0251]
0.031[0.991]-0.052 *[-1.742]

TFP(OLS)
0.011 **
[1.979]0.031[0.49]
342
0.017-0.0031.30-0.006[0.49]

0.011 *
[1.74]-0.004[0.25]
0.003[0.22]
0.002[0.08]
0.029[0.88]-0.051 *[1.71]

5. Conclusions and Discussions

Intangible assets have played as a key role in the productivity growth in the informationage. Among several kinds of intangibles, management skills and human capital are crucial in the
improvement in firm performance. Bloom and Van Reenen (2007) examined the effects oforganizational and human resource management on firm performance using the interview
surveys conducted in France, Germany, the UK, the US. Following their survey, we conducted
the interview survey on organizational and human resource management in Japan and Korea.
Following Bloom and Van Reenen (2007), we construct management scores on
management practices in each firm based on the interview survey. For organizational
management, firms which have clear organizational targets and better communication within
employees, and conduct organizational reform gain high score. For human resource
management, firms which evaluate human resources flexibly and try to keep high motivation of
employees gain high score.
The overall average score in Japanese firms is higher than that in Korean firms. Even
when we study the average score in the manufacturing firms which dominate the sample in the
Korean survey, the result is similar to that in all firms. When we examine the distribution in
average scores in Japanese and Korean firms by size, we find that the mean in distribution in the
average score in Japanese firms with less than 300 employees is higher than that in Korean
firms in the same category, while the mean in the distribution in the average score in Japanesefirms with more than 300 employees is almost same as that in Korean firms. The gap in averagescores between Japan and Korea is explained by the difference in the score in human capital
between both countries. As a result, we conclude that Korean small medium sized firms are
more conservative in human resources management than Japanese small and medium sized
firms.
Using these scores, we examine the effect of management practices on firm performancein Japan and Korea. In Japanese firms, we do not find any direct evidence that management
practices contribute to the improvement in firm performance. In Korean firms, the first factor
representing human resource management gives a positive and significant effect on firm
performance.
As for organizational reform, organizational reform before 2004 contributes toperformance in firms with relatively high score in Japanese firms. In contrast, organizational
reform during 2004-06 improves labor productivity in Korean firms.
Our study is still in progress, because the sample size in the Japanese survey is small. We

24

have already gathered the survey data in 573 Japanese firms which includes 151 firms. When
we obtain financial statements of the remaining 422 firms, we will be able to conduct moreelaborate analysis in management practices in Japanese and Korean firms.

25

References
Black, S. and L. Lynch (2005), “Measuring Organizational Capital in the New Economy,” in C.
Corrado, J. Haltiwanger, and D. Sichel (eds.), Measuring Capital in the New Economy, The
University of Chicago Press, Chicago.
Bloom, N. and J. Van Reenen (2007), “Measuring and Explaining Management Practices acrossFirms and Countries,” Quarterly Journal of Economics 122, pp.1351-1408.
Corrado, C., C. Hulten, and D. Sichel (2005), “Measuring Capital and Technology: An Extended
Framework,” in C. Corrado, J. Haltiwanger, and D. Sichel (eds.), Measuring Capital in the
New Economy, The University of Chicago Press, Chicago.
Corrado, C., C. Hulten, and D. Sichel (2006), “Intangible Capital and Economic Growth,”
NBER Working Paper No. 11948.
Fukao, K., T. Miyagawa, K. Mukai, Y. Shinoda, and K. Tonogi (2008), “Intangible Investment
in Japan: Measurement and Contribution to Economic Growth,” forthcoming in the
Review of Income and Wealth.
Hao, J., V. Manole, and B. van Ark (2008), Intnagible Assets in Europe: Measurement andInternational Comparability,” paper presented at the final conference of EUKLEMS Project
held at Groningen.
Ichikowski, C. (1990), “Human Resources Management System and the Performance of U.S.
Manufacturing Businesses,” NBER Working Paper No. 3449.
Kanamori, T. and K. Motohashi (2006), ‘Centralization or Decentralization of Decision Rights?
Impact on IT Performance of Firms,’ RIETI Discussion Paper Series 06-E-032.
Kurokawa, F. and K. Minetaki (2006), “How Can IT Raise Productivity Linked with Workplace
Re-organization and Human Capital in Japan?,” (in Japanese), The Economic Analysis No.
178, pp. 54-95.
Marrano, M. G., J. Haskel, and G. Wallis (2007), “What Happened to the Knowledge Economy?
ICT, Intangible Investment and Britain’s Productivity Record Revisited,” Department of
Economics, Queen Mary University of London Working Paper No.603, Queen Mary
University of London, London.
Miyagawa, T., M. Ozaki, A. Kawakami, and K. Edamura (2008), “Organizational Reform andFirm Performance in Japan,” (in Japanese), RIETI Discussion Paper Series 08-J-062.
Shinozaki, A. (2007), “Effective Reforms with Information Technology: Logit Model Analysis
on Business Process Reengineering, Business Unit Restructuring, and Human Resource
Management,” (in Japanese), The Economic Analysis No. 179, pp. 36-54.

26

27
）

3 Are such checks made on a periodic basis rather than being made as necessary? And how frequently are such（checks made?
4 Are additional checks made that are decided by the section or department involved itself, rather than just being fixed checks?

4 Are adjustments made to ensure that the degree to which goals have been achieved at different divisions is fairly compared? (for example, utilizing common scales such as overtime hours?)

3 Are the results of such checks made openly available within not only your division but also between relevant divisions?

2-3-1. Implementation of organizational goals (permeation of degree to which goals are achieved, and results of checks on performance)
2 Are the results of such checks made openly available within your division?

）

2 Are checks made to see how far goals have been achieved? Please give an example of how such checks are made. （2-3. Implementation of organizational goals (degree to which goals are achieved, checks on performance)

3 If goals exist on various levels (such as company-wide, divisional and sectional goals), do all employees understand the level of priority of the goals?
（）
4 Do all employees accept the target levels? Please give an example if possible.
（）

4 Are target levels checked to ensure there is fairness between divisions or sections? Please give an example of how they are checked.
（）
2-2. Implementation of organizational goals (permeation of goals)
2 Do all employees know about the goals?

2-1. Implementation of organizational goals (setting target levels)
2 For example, are the settings for the divisional or sectional target levels simply given to you from the division or section above you? Or are they given to you while considering theopinions of your division or section?
3 Are the target levels appropriately set as non-binding chanllenges?

4 Is consistency maintained between these goals and the goals of the management principles or of the long-term company-wide goals?

3 Are the goals of each division adjusted in each division to ensure consistency between divisions?

2. Implementation of organizational goals
2 Are there specific numerical goals on multiple levels that go beyond being just a vision or a slogan, regardless of the level of the goals (such as company-wide or divisional or sectional goals)?

4 Are the management principles also supported by parties such as external partners or the shareholders?

3 What kind of schemes are in place to have those management principles shared by all employees? (For example, announcing them at the morning assembly, or making them
portable by writing them on cards or such like.)

About the scoring
Quantitative accompanying information
1. Permeation of management principles (vision)
2 Does your company have management principles that it has upheld for many years?

Appendix 1. Questionnaire

28）

3 Were the effects of the reform shown between divisions, and not just within one division? If they were shown between divisions, please give an example of the effects.
（）
4 Were the effects of the reform shown between the company and the business partners, and not just within the company? If they were, please give an example of the effects.
（）
4-3. Details of the organizational reform (delegation of authority)
When a company undergoes organizational reform, sometimes the employees' decision-making authority is also revised. In the case of your company,
2 Was decision-making authority given to those in a lower position as a result of the organizational reform?

4-2. Scope of the effects of organizational reform
2 Were the effects of the reform shown in the divisions or sections? If they were, please give an example of the effects.
（Write the example here）

4 During the organizational reform, did the mid-level management also strive to achieve the reform, thereby giving a sense of unity in the company?

4-1. Period of organizational reform or strategic change
2 Did it take time to implement the organizational reform over one year? How many years were spent including preparation period?
（
3 Why was the organizational reform necessary? Was is to do with the leadership of the top management?

By what percentage did profits increase or by what percentage were costs reduced?
（
）

）

（

4 Did you determine the results of the reform in a quantified manner?

）

（

）

How much did it cost?

When did it occur?

（

3 Did your company use a consulting company at that time?

4. Implementation of organizational reform
2 Has your company undergone any organizational reforms in the last ten years?

4 Are informal meetings held with persons of various ranks?

3 Are informal meetings held between divisions?

3. Non-stylized communication within the organization
2 Are measures and activities other than stylized meetings used to increase informal communication?
(for example, informal meetings consisting only of key personnel)? Please give an example.

4 Are these measures institutionalized on a company-wide level?

3 How long is it between the setting of higher goals and the operation / implementation of those goals?

4 Are problematic issues and countermeasures made thoroughly known throughout the relevant division, and if necessary, other divisions? Please give an example if possible.
（）
2-3-3. Implementation of organizational goals (results of checks - handling when goals have been achieved)
2 When goals are achieved are investigations made so that those goals renewed on a continuous basis or so that higher goals are set?

3 After investigations, are points to revise spread throughout the division, and are measures for handling the failure to achieve the goals promptly implemented?
(In this case, exclude personnel matters.)

2-3-2. Implementation of organizational goals (results of checks - handling when goals have not been achieved)
2 Is a meeting consisting of managerial staff and employees promptly held as soon as it is known that the goals were not achieved?

29

（

（

）

）

4 Could you prevent the loss of such excellent employees?

9. Securing good manpower
2 Can you identify the high perfomance and core employees, mentioned in the question 9, in your company? Please give an example.
（
3 Such excellent employees are treated well comparede with ordinary employees? If so, how they are treated?
（

4 Was the motivation of the employees raised through introducing such system?

3 Is there a system to connect good performance to things such as financial reward or promotion?

））

8. Handling employees that perform well
2 Is it made clear within the division that the employee's performance is good, for example by management praising employees at meetings?

4 Are the measures implemented as soon as a problem is confirmed (before a routine rotation) ?

3 Does that handling include measures that are implemented faster than the average term of office?

7. Handling employees that perform poorly
2 Are they handled in some specific way other than by giving them oral warnings?

4 Do you monitor when the employees' motivation, retention rate or job performance increases as a result of such scheme?

6. Schemes to improve motivation
2 Are there any schemes other than promotion-related or pay-related systems to increase the motivation of the employees? Please give an example.
（）
3 Is that scheme used on an institutional basis throughout the company?

4 Did the performance of the employees improve as a result of using the management-by-objectives system and introducing a performance-based promotion system?

3 If the promotion system is mainly a performance-based one, does your company have a management-by-objectives system? If it does, when did that system begin?

5. Promotion system
2 Does your company mainly have a performance-based promotion system?

4 Did an opportunity to earn new profits arise as a result of the organizational reform by the organizational reformbaseo on the IT system? Please give an example.

3 In the last decade, did your company launch organizational reform, rather than raise business efficiency, by utilizing the IT system ?

4-4. Details of the organizational reform (IT activities)
2 Did the IT system make your company more streamlined, for example by reducing the amount of paper-based documentation ?

4 As a result, was there a change in the details of the job or the way of doing the job? Please give an example.

3 Were posts simplified in conjunction with decision-making authority being given to those in a lower position?

30

（

）

）

4 Is there a systematic program in place to ensure the employees acquire some expertise?

（）

What percentage of the supervisor's working time is spent on giving instructions to those ina lower position?
（）（）

3 To improve the expertise of the employees, are they assigned to a set position for a long time?

13. Employees' expertise
2 Are employees rotated in a fixed schedule, such as once every two or three years?

4 Are the effects of OJT monitored? Please give an example of the methods used.

3 Does OJT contribute to business results? Please give an example.

12．Nurturing human resources through OJT
2 Is OJT performed on a daily basis?

4 Are the effects of those training activities adaptable to other companies?

3 Do those training activities help to improve business results? Please give an example.

11. Nurturing human resources through training
2 Is there training on an occupational ability basis or an assignment basis, aiming to improve the work skills of the（employees? Over the course of one year, on average how long is spent on training?
(Training on an occupational ability basis means training in specialist capabilities that are required in each field, suchas management, business, research and development, and manufacturing. Assignment-based training means training
in areas such as languages, OA, computing, and acquisition of official certifications.)

4 Did the motivation of the managers increase as a result of introducing such system?

3 Is there an incentive system, such as a pay-related or promotion-related system, to reward managers that have nurtured excellent staff of a lower position?

10. Evaluating the interpersonal skills of the managers
2 Do the managers give clear criteria such as the degree to which persons of a lower position should be nurtured?

Appendix 2 The results of principal component
analysis

Japan

QuestionsKorea

1st component

2nd component

1st component

2nd component

q1

0.17

0.13

-0.02

0.31

q2

0.25

0.04

0.07

0.28

q2_1

0.22

-0.06

-0.06

0.29

q2_2

0.22

0.20

0.04

0.40

q2_3

0.22

-0.04

-0.03

0.41

q2_3_1

0.18

0.07

-0.11

0.44

q2_3_2

0.23

0.23

0.06

0.37

q2_3_3

0.20

0.04

0.15

0.19

q3

0.16

0.03

0.19

0.11

q4

0.24

-0.38

-0.06

-0.02

q4_1

0.29

-0.37

-0.05

0.01

q4_2

0.30

-0.34

0.07

0.01

q4_3

0.21

-0.14

0.03

0.08

q4_4

0.24

-0.25

0.10

-0.03

q5

0.15

0.29

0.40

-0.01

q6

0.22

0.12

0.38

-0.08

q7

0.17

0.15

0.29

0.02

q8

0.20

0.35

0.28

0.01

q9

0.10

0.20

0.34

-0.07

q10

0.17

0.25

0.38

-0.03

q11

0.24

0.10

0.24

0.04

q12

0.15

-0.15

0.24

0.05

q13

0.14

0.17

0.23

0.07

31