Special Interview
Interview with Manabu Morikawa, Head of CHRO Office, Fujitsu Limited

Japanese Management in Transition
By Japan SPOTLIGHT
We are currently seeing a transition in Japanese management from the conventional lifetime
employment and seniority system to a remodeled one based on meritocracy under changing workstyles
due to the continuing pandemic. Adjusting business management to global standards will be necessary
for globalized companies to maintain their international competitiveness.
Japan SPOTLIGHT held the following interview with Manabu Morikawa, Head of the Chief Human
Resource Officers (CHRO) Office of Fujitsu Ltd, one of Japan’s giant global companies.
(Online interview on July 19, 2023)

Self-Introduction

worldwide. Our previous human resources
policy was differentiated among the regions
JS: First, could you please tell usof the world. This worked well when ourabout your work history and also
business was exclusively done inside athe new human resources
particular country or region. But now ourmanagement policy at Fujitsu thatbusiness cannot be exclusively done within ayou have recently been working
particular nation. In promoting our business,on?
a variety of human resources among differentnations must work together. So without aMorikawa: I am now working here in Fujitsu
globally standardized human resources
as Head of CHRO Office. I joined Fujitsu inmanagement system, we would face2006 as a mid-career recruit, having beendifficulties in promoting our business.
mainly working on human resources
For example, when we are about to assessmanagement policies. From 2014 for about
the performance of employees and reflect thisfour years I was stationed in Germany
in each employee’s salary, we find it
working for our German subsidiary. I was inimpossible to achieve a fair assessment withcharge of human resources management
a human resources management policy that
Manabu Morikawa
policy in Europe and after coming back todiffers among nations or regions. In ourJapan, I worked in the labor policy department to deal with laborprevious human resources management, specified employment wasunion issues as senior director.
adopted in nations other than Japan, and only in Japan did we have
After the pandemic occurred, Fujitsu created its own uniquehuman resource management not based on specified employment
working concept “Work Life Shift” to achieve a flexible workstyle andbut on an individual employee’s competence. Of course, it ishas been spearheading a work-life balance in the Japanese business
important to assess each individual employee’s competence, but inworld. Our CHRO Office is also responsible for global humanlight of the need to assign employees to new jobs or posts with theresources management policy. Thus, I am now working, together
increasing job options within the company as well as humanwith our Executive Vice President and Chief Human Resource Officer
resources development, it was necessary for us to move to a humanMr. Hiroki Hiramatsu, on planning our global human resources
resources management system based on specified employment
management strategy to achieve Fujitsu’s business goals.
which is the global standard in order to win the global competition.
So we started human resources management based on specific
JS: Fujitsu seems to have been promoting reform ofemployment for executive employees in April 2020, which washuman resources management with the introduction
revolutionary for us. Since then, this method has been expanded toof a global human resources management strategy.
general employees. We have been promoting a working environment
How did you start this reform?
where each employee can start to think spontaneously about whatspecific job they are interested in doing or what skills they must
Morikawa: At this moment there are 130,000 employees in Fujitsu
acquire to get this specific job.
42 Japan SPOTLIGHT • September / October 2023

https://www.jef.or.jp/journal/

Human Resource Mobility
JS: Whether specified employment works well or not

may depend upon business sectors. The IT businesscan be friendly to specific employment and humanresource mobility would be enhanced in this sector
with its introduction. Is that right?

Morikawa: We are declaring that our company will start thetransformation from an IT to a DX company. For this reform, it isimportant to get competent human resources with high DX/ICT skills
or expertise. In this light, we are thinking about actively searching forhuman resources outside the company. As a matter of fact, we see
an increase in recruitment of mid-career employees and there arealso more experts looking for the next stage of their professional life
outside the company they belong to. So I think human resource
mobility seems to be increasing.
JS: There was a report in the Nikkei Journal on April

19, 2023 that said 37% of all employees in Japan are
now mid-career recruits. What percentage of theemployees in Fujitsu were recruited as mid-career
workers?

Morikawa: It is around 20% in our Japanese corporation.
Meanwhile, in our overseas corporations, as we do not have theconcept there of employing people right after graduation fromschools, most of the employees are recruited mid-career.
JS: As those mid-career recruits increase, do you

think that “lifetime employment” or the “senioritysystem” that are symbolic of Japanese management
will gradually losing their influence?

Morikawa: In our company, the idea of a “seniority system” isalready gone. As for “lifetime employment”, it is often considered asa bad Japanese management custom and as an impediment to labormobility. But I guess it can be understood as an instrument forachieving high employment or loyalty to a company. I do not think it
would be necessarily all bad for each individual employee to work forthe same company or work on the same job for many years and behighly engaged with that company or job. So although thepercentage of workers engaged in what we call lifetime employment
is decreasing with enhanced labor mobility in society, I do not think
this mode of employment will cease to exist. What matters is to keep
the option to work for a single company over the long term, while
creating a working environment or corporate culture that enables
each employee to switch jobs or companies in the interest of theircareer development.
JS: With the seniority system gone, many employees

must work for bosses younger than themselves. Atsuch times, do you think there would be conflicts anddifficulties in human relations?
Morikawa: I have been working for Fujitsu for 17 years and I havelittle thought about conflicts between young bosses and their older
subordinates. There may be cases in which their ex-bosses become
their subordinates. In such cases, there could be someembarrassment on both sides, but I do not think any conflict willarise in such cases if they work together as human beings andcolleagues and respect each other as business partners. It is also
true that in general, working on the same job for a long time wouldproduce valuable experience and knowledge, and I believe that
respect for such senior people’s working skills should be important.
JS: For human resources from overseas, in particularin developing nations, lifetime employment in a
Japanese company could be regarded as a merit. Do
you agree?

Morikawa: Many of them could be attracted by training courses
inside the company in Japan rather than actual lifetime employment.
In a Japanese company, the management would need to implement
training programs for a definite period in order to make these young
recruits from schools into full-fledged employees. In our company,
we call these young employees “trainees” for at least one year andthey practice “On the Job Training” (OJT). This relates to theJapanese university education system as well. Such training periods
do not exist in European nations or the United States. Recruits there
have to start working as full-fledged members as soon as they are
assigned to a specific section. I think this is because there is asystem in their society where they can match their competence orinclination with a specific job through long-term internships with acompany during their university student days. In Japan there are notso many long-term internship programs as in the US and Europe,and so companies hiring new graduates must prepare a training
period for them. Recently we have seen a growing number of nonJapanese employees, and this does seem to be because they regard
Japanese companies highly, since they are friendly for them and canprovide them with good training courses.

Merits of New Employment System
JS: Do you think the new employment system justintroduced in your company will lead to enhanced
competitiveness?

Morikawa: Unless we get competent human resources, we cannot
expect business innovation, and so moving to a global standard
employment system and getting competitive human resources
globally would lead to enhanced business competitiveness as well.
Japan SPOTLIGHT • September / October 2023

43

On the side of employees too, they would be highly motivated towork for companies providing a platform for development andeducation, as well as an appropriate level of salary benchmarked at
the market rate for the job and incentives to achieve a high businessperformance. So this new system is beneficial for both.
JS: So do you think the new employment system willlead to improved job satisfaction for the workers?

Morikawa: Yes. We conduct an engagement survey twice a year in
Fujitsu to measure how much our employees are satisfied with theircurrent job. The scores in this survey have been gradually risingsince the introduction of this new human resources management
policy based on a specified employment system. We see abenchmark of scores of job satisfaction of global IT companies
around 75, and our company’s score has been rising to reach a little
under 70.
JS: Do you think this specified employment system

will prevail all over Japan?

Morikawa: Looking at the domestic markets of various sectors, we
assume that we cannot expect a drastic expansion of the market
unless innovation with significant impact happens. So assuming thatour domestic market does not grow greatly, we will need to expand
our business globally. Accordingly, we will need to gain humanresources globally. It will be difficult to get competent humanresources globally unless a company’s human resourcesmanagement system is fixed with the global standard as thebaseline. It may depend upon sectors, but any company pursuing
global growth will find a specified employment system as the basisof the global standard indispensable for competition, and thus thissystem will expand all over the world.
JS: It is often said that the Japanese labor market

suffers from low mobility. With such a change ofemployment systems, do you think labor mobility in
the Japanese economy will increase? Will that resultin enhancing the Japanese economy’s growthpotential?

Morikawa: Yes. I think that Japanese labor market mobility will
increase from now on. Not only among a limited number of sectors
or businesses but in Japan overall, this human resources mobility
will be enhanced, then we will see a new picture of our economy.
With a new system based on specific employment, there will be themerits of working performance assessment and higher salaries for
employees and greater availability of human resources outside thecompany for the management. This means both management andemployees can gain from this new system, and with innovationencouraged by this, it would lead to higher economic growth.
44 Japan SPOTLIGHT • September / October 2023

Specified Employment System
JS: Changes in employment systems could lead toconcerns for employees, in particular elderly ones,
about possible loss of jobs or declines in income.
What do you think?

Morikawa: It is certainly true that there will be some who cannot
accept these changes all of a sudden if they are accustomed to thelifetime employment and seniority systems. So I think we have toexamine the new human resources management policies in detailwith the labor unions and communicate properly with the affectedpeople. Fujitsu is not pursuing an American-style employment
system in which anybody could lose their job at any time and there
would be no desk for a fired person on the day after their dismissal
was announced. We are thinking about creating a corporate culture
where each individual employee is treated autonomously as anindependent skilled worker even while changing jobs within thecompany, and we want to recruit people who find this corporate
culture attractive.
We have introduced an educational on-demand platform withvarious content to enable anyone to learn at anytime and anywhere at
the company’s expense, and with this we want to send a positive
message to our employees: “Let’s change our minds and build up
our own careers autonomously as the company changes also.”
Looking at the hours of learning spent by employees bygeneration, those in their 40s and 50s tend to spend more time thanthose in their 20s and 30s. Judging from such data, I think that ouremployees in the older generation can better understand ourmessage that they will need to improve their career prospects bylearning autonomously. There are now also some people trying tolearn about jobs that are totally different from their own specialty,
such as salespeople trying to learn about marketing and marketing
experts trying to learn about finance. We are continuing
communications with our employees to encourage their change ofmindset and convince them that they must change now to survive inbusiness.

Humanistic Management
JS: Experts in business management are saying todaythat from now on we will need a more fine-tunedhuman resources management system to meet theneeds of each individual employee in order toenhance their job satisfaction. What do you think?

Morikawa: Yes, I think we will need such a tailor-made humanresources management system eventually. Fujitsu wants to be acompany that promotes well-being. However, what each person
regards as well-being will differ, and so we need to think about eachindividual’s needs and aim for such a tailor-made human resourcesmanagement policy. So far, Japanese companies’ human resourcesmanagement policies have been devised in accordance with theLabor Standards Act drafted on the basis of protecting mainly
industrial factory workers. This has been an extremely efficient way
of managing labor, but it defines working people as a mass and does
not greatly respect an individual worker’s well-being or needs. How
we respond to these individual needs with a tailor-made approachfrom now on will be up to each company’s corporate culture. From a
global perspective, we will need to respond to these needs byconsidering the cultural backgrounds of different trading or businesscustoms among various nations.

school. Many Japanese start to work after graduating fromuniversities, but it will be necessary for them to acquire more skills
and knowledge after leaving university in order to become
innovators. I would hope that they continue to study for another two
or four years. Of course, it is not possible for all students to do so,as there are additional expenses needed for graduate schools. But it
is vital that we change the situation where it takes 10-15 years to pay
back student loans. We need investment in university education andindividuals eager to go to university and graduate school. I think it isimportant to allocate money for investment in such intangible assets,though investment in facilities and equipment is important as well.

JS: So even with the end of the seniority system andViews on Japanese Economic Policy

with lifetime employment declining, you would nothave a harsh management system but a morehumanistic one aimed at ensuring an individual
employee’s well-being. Is this right?

Morikawa: Yes, exactly. I believe that innovation is born from humanbeings and we should enhance investment in human resources andhuman capital as sources of innovation.

Investment in Human Resources
JS: Companies’ reluctance to invest in facilities andequipment due to a lack of innovation is often
referred to as a reason for the stagnancy of theJapanese economy as well as low labor mobility.
Assuming that enhanced labor mobility triggers
innovation, do you think it will also eventually lead toincreased investment in facilities and equipment?

Morikawa: Given that it is human beings who initiate innovation, I do
not think that Japanese companies have not been undertaking finetuned direct investment in human capital, in other words, intangible
assets. Perhaps they have failed to make their investment in humancapital visible in spite of their actual efforts. In Japan, having
achieved development in the manufacturing sector, corporate
investment in tangible assets such as facilities and equipment for
manufacturing has been the principal one. I would explain that lackof competent human resources or investment in human capitalwould be behind the lack of innovation in Japan. In this regard, many
pundits in Japan are now talking about human capital management.
Currently, Japanese companies’ investment in intangible assets ismuch less than in other major nations. It is absolutely necessary toincrease such investment from now on. This should not be done only
by private companies but by the government as well. Thegovernment should enhance investment in education, as humancapital is indispensable for any economy. Japanese mandatory
education is up to the high-school level and I am concerned that
there is very little investment in advanced education after high-

JS: Finally, do you have anything to say about

Japanese economic policy?

Morikawa: As I told you, I would like the Japanese government totake a serious view of the much lower level of human capital
investment in Japan than in other countries. It is clear that we should
invest more in human capital to restore our stagnant economy.
There also seem to be many regulations still that impede thevitalization of the labor market. For example, the tax exemption
amount for retirement benefits increases in accordance with theworking years. This is nothing but a message to recommend thatworkers work for the same company for a long time. I think we mustchange it.
JS: I have heard from university professors ofeconomics that there are very few graduate school
students in social sciences or the humanities whohave got jobs in private companies. In the light of theincreasing need for human resources development,
as we have discussed, will there be a greater need forpeople with knowledge of business management orother social sciences from now on?

Morikawa: Yes, I agree with those professors. Greater knowledge
will become a source of a company’s competitiveness as well. So I
would like more of those students with knowledge of technology andsocial sciences to pursue jobs in the private sector. We have started
collaboration with some universities to initiate a long-term internshipprogram. We would like to begin alliances with more universities inorder to have more graduates work for our company after they havelearned about the nature of our jobs during their internship working
experience.

Written and translated by Naoyuki Haraoka, editor-in-chief of JapanSPOTLIGHT, with the cooperation of Naoko Sakai who is a freelance writer.

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