ISSN 2189-9592

Journal of Japanese Management
Vol. 1, No.1, November 2016

JFMRA
Japan Federation of Management Related
Academies

Editor-in-Chief
Fangqi Xu (Japan Creativity Society, Kindai University)
Editors
Yukio Takagaki (Japan Academy of Management, Surugadai University)
Nobuchika Kaido (Japan Academy of Business Administration, Kwansei Gakuin University)
Editorial Board
Shintaro Abe (Japan Academy of Consumer Education, Josai International University)
Noriyuki Hamaoki (Japan Academy of Enterprise and Business Administration, Chuo Gakuin
University)
Masataka Hashimoto (Japan Logistics Society, Meiji University)
Masayuki Horie (Japan Auditing Association, Nihon University)
Yasuo Hoshino (The Japanese Association of Administration Science, International Pacific
University)
Yoshiharu Hyakuta (Japan Association for the Comparative Studies of Management,
Komazawa University)
Taketoshi Ikeda (Association for the Study of Industrial Management (Japan), Chiba Universityof Commerce)
Masato Kamekawa (The Japanese Association for Research in Disclosure, Rikkyo University)
Isuke Kohtoh (Japan Academy of Management Philosophy, Chukyo Gakuin University)
Hideo Narimichi (Japan Tax Accounting Association, Seikei University)
Kosuke Ogawa (Japan Institute of Marketing Science, Hosei University)
Shigeo Ohtsuka (Japan Accounting Association, Chiba University)
Hironori Otsuka (Japan Accounting Association, Saitama Gakuen University)
Nobuhiko Sato (Japan Accounting Association, Kumamoto Gakuen University)
Osam Sato (Japan Society for Information and Management, Tokyo Keizai University)
Makoto Takahashi (Japan Creativity Society, Japan Professional School of Education)
Masayasu Takahashi (Japan Academy of Business Administration, Meiji University)
Hideki Ueki (Knowledge Management Society of Japan, Tokyo Keizai University)
Masamichi Yoshioka (The Japanese Association of Management Accounting, Tokyo Universityof Science)
Advisory Board
Kazuo Hiramatsu (Japan Accounting Association, Kwansei Gakuin University)
Nobutaka Kazama (Association for the Study of Industrial Management (Japan), Meiji
University)
Takayuki Nonoyama (Japan Association for Management Systems, Aichi Sangyo University)
Takao Nuki (Association for the Study of Industrial Management (Japan), Musashi University)
Koji Okubayashi (Japan Society of Human Resource Management, Osaka International
University)

ISSN 2189-9592

Journal of Japanese Management
Vol.1, No.1, November 2016

JFMRA

J

Japan Federation of Management Related
Academies

Journal of Japanese Management Vol.1, No.1, November 2016©2016 Japan Federation of Management Related Academies
All rights reserved. This journal may not be translated or copied in whole or in part without the written
permission except for brief excerpts in connection with reviews or scholarly analysis. Use in connection
with any form of information storage and retrieval, electronic adaptation, computer software, or by similaror dissimilar methodology new known or hereafter developed is forbidden.
The original English language edition published by JFMRA.

Greetings on the First Issue of
the Journal of Japanese Management
The journal of the Japan Federation of Management Related Academies (JFMRA) is an
official publication of JFMRA. I am very pleased with this first electronic publication of ascholarly journal of the Japan Federation of Management Related Academies. Through thisjournal, we aim to contribute to international academic progress through advanced studies inwide-ranging research fields related to management, management information, commerce, andaccounting in Japan. JFMRA was established through the affiliation of 57 academic societies in
the fields of management, accounting, and commerce on 23 November 2006. It emerged out of
the gap left by the disappearance of what were the three Research Liaison Committees(management, accounting, and commerce)—due to re-organization the Science Council of Japan(SCJ)—and now has 61 affiliated academic societies in Japan. I think that JFMRA now has avery significant presence in Japanese academies, and is far more than merely the successor
organization of the previous Liaison Committees in the SCJ.
To date, economic inequality, global environmental issues, ageing and depopulating ofsocieties, accelerated development of new emerging markets, or innovations like the internetof things (IoT), artificial intelligence(AI), open innovation and linkages-innovation, etc. havechanged our social life and cast a lot of research themes to our researchers, which need a wideranging interdisciplinary approach that calls for cooperation going beyond the existing academic
frameworks of individualistic society. Therein lies the significance of JFMRA.
JFMRA has been working with the following aims: (1) Development of research and spreadof knowledge in fields related to management, management information, accounting, andcommerce; (2) Research and contribution to society through education related to management;(3) Exchanges between various academies and researchers associated with management; (4)Promotion of cooperation with researchers overseas related to management, and; (5) Promotionof cooperation with the Science Council of Japan and the academic research communities
working in cooperation with the Council. The association also organizes public lectures twice
every year, as well as an annual symposium. One of the positive results has been publications
such as "The Creation of a New Business Management" (Chuokeizai-sha, 2014).
I rejoice at the release of the first issue, and would like to thank the members of the JJM
editorial board, especially Prof. Fangqi Xu, the vice-president of JFMRA. I am sure that thisjournal is beyond the expected levels of many academic researchers at home and abroad andwill intellectually stimulate the readers.
Dr. Nobutaka Kazama
President, Japan Federation of Management Related Academies
Professor, School of Commerce, Meiji University, Tokyo, Japani

Preface
We often hear that the global competitiveness of Japanese firms has been declining in recent
years. However, once you consider the long-term sustainability of firms as “going concerns”,
Japanese managerial practices might prove to be more viable than Western style short-term
profit orientation. It is incumbent on us to continue to conduct research on Japanese managerial
practices that emphasize sound business management and further disseminate it to the world.
Unfortunately, while many academic associations exist in Japan, few appear to be active indisseminating Japanese knowledge abroad, particularly in the field of social sciences. Needlessto say, even if individual academic associations were interested in actively doing so, limited
resources make it difficult to accomplish such a task. Fortunately, 61 academic associations
representing management, commerce, accounting and management information are
participating in the Japan Federation of Management Related Academics (JFMRA).
One of the main means of knowledge dissemination is the publication of an academic journal
in English. In particular, in today’s highly networked society thanks to the internet, there is no
doubt that electronic journals should be the most appropriate media accessible to anyone
anytime anywhere around the world.
Under the leadership of the new board of directors, the JFMRA had in earnest initiatedaction in this direction, and after about 20 months of efforts, launched as planned the first issueof the Journal of Japanese Management (JJM) in 2015. As the representative of the editorial
board, I would like to acknowledge our appreciation to those academic associations thatparticipated in this effort, manuscript contributors, and reviewers for their cooperation.
We continue to work hard for the further development of JJM in the future.
Dr. Fangqi Xu
Editor-in-Chief, Journal of Japanese Management
Vice-president, Japan Federation of Management Related Academics
Professor, Faculty of Business Administration, Kindai University, Osaka, Japanii

Contents

Greetings on the First Issue of the Journal of Japanese Management・・・・・・・・・・ ・ⅰ
Nobutaka Kazama
Preface・・・・・・・・・・ ・ⅱ

Fangqi Xu
Effects of Incorporated Psychiatric Institutions’ Internal and External Control on
Their Local Distributions and Hierarchical Formation: Case of Osaka・・・・・・・・・・ p.1
Masahiko Takaya
Entrepreneurial Activities and Residential Networks of Creative Areas
in Japan and Korea
・・・・・・・・・・ p.15
Rihyei Kang & Takahiro Kawaji
Impacts of Overtime Reduction on Psychological Well-Being for Japanese
Research and Development Engineers:
Positive and Negative Sides of Work Time Regulations

・・・・・・・・・・ p.27

Tetsushi Fujimoto, Hideki S. Tanaka & Shiming Xia
Family firms’ transformation to non-family firms during 1920’s-2015・・・・・・・・・ p.44
Toshio Goto
SOCO’s Impact on Individual Sales Performance: The Mediating Role of
Cross-functional Integration
・・・・・・・・・・ p.60
Eunji Seoiii

Journal of Japanese Management Vol.1, No.1, November 2016

ISSN 2189-9592

Effects of Incorporated Psychiatric Institutions’ Internal andExternal Control on Their Local Distributions and HierarchicalFormation: Case of Osaka
Masahiko Takaya

Faculty of Medicine, Kindai University, Japan
Association for Research on NPOBP E-mail: takaya@med.kindai.ac.jp
Abstract
Medical institutions in Japan can be classified as either public or private, with both being
basically nonprofit organizations. However, most private medical institutions are incorporated
and have equity; in this sense, they operate as for-profit organizations. Moreover, their data are
not freely disclosed, making their internal controls too difficult to investigate. On the other hand,
the Ministry of Health, Labour and Welfare control the public medical and care system either
directly or indirectly; for example, the Ministry regularly revises the medical-fee system.
However, it is difficult to decide whether this system works well or not because the system of
medical institutions is too complex. To investigate a simpler model, this study examined private
psychiatric hospitals. This study aimed to examine the local competitiveness of incorporated
psychiatric hospitals, in order to reveal whether internal and external control works well or not.
In this study, 30 out of 49 private psychiatric hospitals listed on the homepage of Osaka
Association of Psychiatric Hospitals were investigated. The selected sample represents“dedicated” psychiatric hospitals, offering only psychiatric beds. “Having a license to charge a
psychiatric emergency hospitalization fee” is an indicator of external control, and can be also
considered as an indicator of clinical activity in each hospital. Distribution of psychiatric beds
as well as of hospitals with the license was examined in each medical area. This study concluded
that the uneven distribution of psychiatric beds as well as psychiatric emergency hospitals andthe hierarchical formation of the incorporated psychiatric hospitals system can be observed.
Keywords
Incorporated medical institution, Psychiatric hospital, Control, Hierarchy, Distribution, Medical
area(1) Introduction

respectively,

1. Equity and limitedly disclosed information

hospitals and incorporated medical clinics total

The total number of medical hospitals and

5,721 and 39,455, respectively, as of the 1st ofclinics in Japan is 8,493 and 100,461,
1

while

incorporated

medicalJournal of Japanese Management Vol.1, No.1, November 2016

October, 20141.

ISSN 2189-9592

hospital that can be accessed by using registries

Most incorporated medical institutions in(Toukibo in Japanese) are too limited. The

Japan are known to have equity. Typicalnumber of the members of the board of directors

incorporated medical institutions are called(Riji in Japanese) within an incorporated

Iryou-houjin in Japanese. Kawabuchi reported
that in 2014, of the total 49,889 Iryou-houjins,

medical institution is decided by law 3 . There

the number of incorporated foundations was

directors, and at least one auditor (Kanji in391, while

incorporated

Japanese). Registries only need to include theassociations was 49,498. Of the 49,498

chief’s (of the board of directors) (Riji-chou inincorporated associations, 41,476 associations

Japanese) name but not those of all thehave equity, while the remaining 8,022 do not2.

members of the board of directors4. Registries

That is, 83% (41,476/49,889) of incorporated

are not required to state whether the hospital is

medical institutions own equity (Figure 1).

an association or a foundation. Moreover, when

However, data that would enable similar

an incorporated hospital is an association, its

analysis of incorporated psychiatric institutions,

equity status is not disclosed in the registry.

whether hospitals or clinics, are not available;

Similar to small and medium-sized enterprises,

thus, it is not possible to compare equity status

incorporated hospitals pose the problem ofamong other types of institutions.

limited data.

thenumber ofmust be three or more members of the board of

2. Public roles of private psychiatric medical
institutions
In this study, the term “private” is definedas “non-public” (in a broad sense).
Privatepsychiatricinstitutions

play

important roles in Japan. The total number ofpsychiatric beds in Japan is 338,174, with
267,578 of those operated by incorporated

Figure 1. Incorporated medical institutions in Japan

psychiatric hospitals. Therefore, incorporated

Source: This figure is created by the author based on

psychiatric hospitals represent 79% of all(Kawabuchi , 2014, p.43)

psychiatric

beds.

The

total

numberofpsychiatric hospitals was 1,067, with 912 of

In this study, incorporated hospitals andthemincorporated psychiatric hospitals are definedincorporated

psychiatrichospitals.

Therefore, 85% of psychiatric hospitals areas “hospitals” and “psychiatric hospitals” which

incorporated

belong to incorporated medical institutions,

psychiatrichospitals.

These

statistical data are accurate as of the 1st ofrespectively. The data on each incorporated

2 Kawabuchi, 2014, pp.43-44

1 Toukei-Hyou (in Japanese), the Ministry of Health,

3 Iryou Hou in Japanese:

Labor and Welfare:
http://www.mhlw.go.jp/toukei/saikin/hw/iryosd/14/dl/03_
toukei.pdf

http://law.e-gov.go.jp/htmldata/S23/S23HO205.html

4 Kumiai-tou Touki Rei (in Japansese) : http://law.e-

gov.go.jp/htmldata/S39/S39SE029.html

2

Journal of Japanese Management Vol.1, No.1, November 2016

ISSN 2189-9592

October, 2014, according to the Ministry of

hospital is allowed depends on the total number

Health, Labour and Welfare5.

of beds in the area in which the hospital is

Whether incorporated or not, hospitals

located. Each hospital gets its share inproviding psychiatric care in Japan must obey

competition with the other hospitals in the same

the Act on Mental Health and Welfare for thearea.

Mentally Disabled (Seishin Hoken Fukushi

completely free, and strong vested interests

Hou in Japanese), which was enacted in 1995.

may exist.

However,thiscompetition

is

not

Several laws mostly protecting human rights ofpsychiatric patients enacted after the end of the

4. Thecompetitive

systemamong

Second World War. These laws were responses

incorporated psychiatric hospitals

to major violations of the human rights ofMedical fees for treatment covered bypsychiatric patients. There have been several

health insurance are the remit of the Ministry

revisions to this legislation over the years,of Health, Labor and Welfare in Japan.

leading it to evolve into the Act on Mental

Therefore, medical fees (excluding fees for

Health and Welfare for the Mentally Disabled

medical treatment not covered by health(Seishin Hoken Fukushi Hou).

insurance) are subject to a de facto official price,

byThus, although psychiatric care is governed

and in fact can be policy variables. The

Japan’s

government is able to run and improve apublicdepartments,

most

psychiatric-hospital treatment takes place inprivatehospitals,

incorporated

most

psychiatric

of

which

are

hospitals.

This

medical policy by controlling the variables.
Medicaltreatments

andtechnologies

performed in general hospitals are generally

presents a paradox.

more complex than those in psychiatrichospitals. Therefore, the medical-fee system of

3. Second medical areas in Japan
In

Japan,

344

in

2013;

generalhospitals

is

more

difficultformedicalnonprofessionals to understand. On the otheradministration areas called “second medical

hand, the medical-fee system in psychiatricareas” 6have been established to provide

hospitals is easier to understand because thesegeneral hospital treatment, which is based on

hospitals’ functions and abilities are simpler at

the Medical Care Act 7 . In Osaka prefecture,a glance.

eight second medical areas were established in

Therefore, to investigate the governance of

20158. Under the act, the number of hospitalincorporated hospitals, psychiatric hospitals

beds in each area is controlled and reviewed

were selected due to the narrower range ofevery five years by each prefectural governor.

medicalThe same is also true for psychiatric hospitalcompared with general hospitals9.

bed numbers. The number of beds that eachskills andtechnologies involved

However, medical care in psychiatric
7 Iryou Hou (in Japanese): http://law.e-

5 Toukei-Hyou (in Japanese)

gov.go.jp/htmldata/S23/S23HO205.html

http://www.mhlw.go.jp/toukei/saikin/hw/iryosd/14/dl/03_
toukei.pdf
6 Iseikyoku (in Japanese), the Ministry of Health, Laborand Welfare:
http://www.mlit.go.jp/common/001086652.pdf

8 Osaka Prefectural Government:

http://www.pref.osaka.lg.jp/attach/2502/00118050/02_16_02_fuikiban_02_syou_03_setsu.pdf
9 Takaya, 2016, p.41

3

Journal of Japanese Management Vol.1, No.1, November 2016

ISSN 2189-9592

hospitals has been differentiated and gradedFujioka described Japan’s medical-institution

these days. For example, the system of needing

governance models as reflecting two influences.

a license to charge a psychiatric emergency

One is the “clinical governance” model of thehospitalization fee was established in the 2002

United Kingdom (UK), and the other is therevision of medical fees10.

“hospital governance” model of the United

HospitaltheStates (USA). The former focuses mainly on

certification system of specialists) have evolved

offering safe and high-quality health care,

under the control of the Ministry of Health,whereas the latter focuses on a governance style

Labor and Welfare since the Meiji government,akin

a process that was discussed in terms of generalorganizations 14 . Additionally, Fujioka referred

hospitals11. Now, national and public hospitals

to the internal control of medical organizations

playclinicalas risk-based by management, and opined thattreatment, undertaking medical research, andmanagement solely by family groups (relatives)offering

contrast,

should be abolished in medical institutions 15 .

psychiatric hospital systems have historically

However, governance theories such as thatdiffered from those of general hospitals.

espoused by Fujioka 16 are confusing because

Therefore, the system of competition among

they fail to distinguish between public andincorporated

seems

private hospitals when discussing governance,

different from that among general hospitals.

including internal and external sources ofHowever, investigation of the former could offer

control. For example, Fujioka did not classify

insight into the latter.

hospitals byleadingsystemsroles

specialistin(including

providingtraining.

psychiatricIn

hospitals

to

those

utilizedtypebyfor-profit(e.g., general,

specialfunctioning)17. Matsubara, et al. discussed ideal
5. Literature

Reviewofgovernanceofgovernance styles of incorporated medical

incorporated medical institutions

institutions in Japan. However, they used the

5.1. Governance model of hospitals

term “public interest” in an ambiguous way

When investigating the governance of

without precisely defining it; they insisted onincorporated hospitals, there are two theoreticalthe necessity of governance only in incorporated

approaches: the governance theory for nonprofit

medical institutions18

organizations and the governance theory for

Most

Japaneseincorporated

medicalmedical institutions. The former holds that no

institutions are managed by family groups

standard governance model fits all nonprofit(relatives), and information about them isorganizations 12 . The latter is a theory

closely held, thus frustrating attempts at data

specifically tailored to medical institutions.

collection.

Several previous studies about governanceThismanagement

of

may

make

studiesincorporatedof

medicalof medical organization were reviewed 13 .

institutions too difficult. On the other hand,

10

14 Fujioka, 2013, pp.151-166

On the psychiatric Emergency Care system:
http://www.mhlw.go.jp/shingi/2009/03/dl/s0326-8c.pdf
11 Takaya, 2015, pp.108-120
12 Hotta, 2012, p.787
13 Fujioka, 2013, pp.167-197

15 Fujioka, 2013, pp.167-181
16 Fujioka, 2013, pp.151-198
17 Fujioka, 2013, pp.167-197
18 Matsubara, et al. 2004, pp. 4-8.

4

Journal of Japanese Management Vol.1, No.1, November 2016

ISSN 2189-9592

case studies of non-incorporated medical

charge a psychiatric emergency hospitalization

institutions

fee, (2) a specialist psychiatry training facility

haveexamined

successful

innovations by way of internal control systems

authorized

implemented in hospitals19.

by

the

Japanese

SocietyofPsychiatry and Neurology (JSPN), and (3)The Medical Care Act (Iryou Hou in

authorization from the Japan Council for

Japanese), which was established in 1948, has

Quality Health Care (JCQHC). The first

been

represents the hospital’s clinical competence22.

improved

severaltimes,

includingestablishment of rules that should be applied toThe

incorporated medical institutions; however,competence of the hospital’s specialists. The

these were later revised for the sake of “public

third represents overall hospital competence23.

interest” in Japanese medical systems20. As a

It is not impossible to conclude that theresult, even now, information on incorporated

separation of ownership and management inmedical institutions is not sufficiently disclosed,

incorporated psychiatric hospitals bears a

as mentioned above.

relation to any of these three activities24. The

Though the discussion on whether non-secondrepresents

theeducational

reasons for this can be thought of as follows.

profit medical institutions are better has beenFirst, thelong-running, no clear conclusion has emerged

management

in a theoretical sense. This is partly because themedical institutions may be only nominal and,term “public interest” cannot be defined strictlyin fact, cannot be performed. Second, hospitalin theoretical economics21. However, in Japan,

activities might be influenced by the inter-medical institutions need to be officially non-relationship of administrative units, which

profit, whether or not they are incorporated. As

helps establish medical facilities or controls

mentioned above, most medical institutions intheir activities and competence25.

Japan

are

substantiallyseparation of ownership andofincorporated

psychiatricincorporated

enterprises. The separation of ownership and6. Aim of this study

management is not realized for many small andAs mentioned earlier, the activities andmedium-sized institutions, which is also true ofcompetences

incorporated psychiatric medical institutions.

hospitals cannot be determined based on the

5.2. Relationship between governance andseparation of ownership and management. This

activities of private psychiatric hospitals

suggests that other factors may influence

Takayacompetitivenessinvestigatedtherelationshipbetween the separation of ownership andofincorporated

among

psychiatricincorporated

psychiatric hospitals in Japan.

management of the incorporated psychiatricThis study investigated private psychiatric

medical institutions in Osaka, Japan, and their

hospitals in Osaka prefecture, Japan. In theinstitutional activities by

examining thefirst phase, the private psychiatric hospitals

possession of three elements: (1) a license towere surveyed, most of which are incorporated

19 Matsuo, 2009, pp.1-223

22 Takaya, 2016, pp.42-47
23 Takaya, 2016, pp.42

20 Iryou Hou (in Japanese): http://law.e-

24 Takaya, 2016, pp.46-47

gov.go.jp/htmldata/S23/S23HO205.html

25 Takaya, 2016, pp.40-49

21 Takaya, 2015, pp.108-109

5

Journal of Japanese Management Vol.1, No.1, November 2016

ISSN 2189-9592

hospitals. In the second phase, a sample ofdirector of the hospital (Byuoin-chou in“dedicated” psychiatric hospitals was selected,

Japanese) is the same person,” “the chief of theand their local distribution and hierarchicalboard of directors is thought to be a relative ofstructures were investigated, using cross-the director of the hospital,” and “the chief of thesectional data.

board of directors is not the same as, nor is arelative of the director of the hospital.”(2) Empirical analysis“Psychiatric emergency beds” in Table 1 is the

In this study, statistical analysis wasnumbers of beds for which a psychiatricperformed using the software jmp10 (SASemergency fee can be charged (approved by a

Institute Inc., Cary, NC, USA).

regulatory agency). This approval represents
psychiatric

1. Private psychiatric hospitals in Osaka,Japan
Psychiatrichospitals’ clinicalcompetence) 27 .

activity(or“Approval year” indicates theyear when each hospital was licensed to collecthospitals

in

Japan

are

the psychiatric emergency fee. “Opening year” isgenerally classified as in Figure 2, according tochiefly based on the homepage of each hospital.

their types of establishers.

Cases when “the opening year” cannot be foundare denoted by a “ * ” symbol.
Hospitals whose “Governance type” isclassified into “B” were excluded from this study
because the separation of ownership andmanagement is unclear even in a nominal sense.
Hospitals 16 and 17 are run by the same chief ofFigure 2. Types of psychiatric hospitals in Japan.

the board of directors, as are Hospitals 18-20. In

Source: This Figure is modified from the original

Hospitals 16 and 18, the chief of the board ofversion shown in the website;

directors holds the director of the hospital.

http://www.mhlw.go.jp/toukei/saikin/hw/iryosd/14/dl/

Therefore, Hospitals 17, 19, and 20 were

03_toukei.pdf

removed from the analysis to reduce complexity.
We

The website of the Osaka Association of
Psychiatric Hospitals

usually

maintainthephrase“psychiatric hospitals.” but psychiatric hospitals

lists 49 private

are not precisely defined. Some general

psychiatric hospitals as members (Table 1). In

hospitals have psychiatric beds, and some

Table 1, the column “Name of hospital

hospitals, for example Hospital 48 in Table 1,(Abbreviation)”alphabetical

are thought to be “psychiatric hospitals” evenabbreviations of corresponding hospital names

though they can be classified as “generalin Japanese.

hospitals.” Therefore, “psychiatric hospitals” are

26

shows

The terms A, B, and C in “governance type”

defined in this empirical analysis as hospitals

mean, respectively, “the chief of the board ofthat provide psychiatric beds only. According todirectors (Riji-chou in Japanese) and thethis definition, 13 hospitals in Table 1 were ex-

26 http://www.daiseikyo.or.jp/

27 Takaya, 2016, pp.42-47

6

Journal of Japanese Management Vol.1, No.1, November 2016

ISSN 2189-9592

Table 1. Private psychiatric hospitals in Osaka, Japan
NumberName of hospital(Abbreviation)

Governancetype

Opening
year

Regular doctor

Psychiatricbeds

Recuperation
beds

Beds forgeneralpatients

Total beds

Psychiatricemergency
beds

Approval year

1

Mizuma

A

1959

11

541

0

0

541

0

*

2

Kijima

A

1963

13

492

0

0

492

0

*

3

Yoshimura

A

1976

6

222

0

0

222

0

*

4

Sakane

A

1965

3

150

0

0

150

0

*

5

Tamenaga

A

1965

7

266

0

50

316

0

*

6

Watanabe

A

1965

9

336

100

0

436

0

*

7

Keihan

A

1954

9

306

0

0

306

0

*

8

Shichiyama

A

1599

13

640

0

0

640

48

2011

9

Neyagawa

A

1965

10

267

0

0

267

60

2014

10

Kaizukachuou

A

*

9

406

0

0

406

0

*

11

Orenji

A

1965

3

240

0

0

240

0

*

12

Kumeda

A

1962

9

494

0

0

494

0

*

13

Osakasayama

A

1966

6

279

0

0

279

0

*

14

Kosaka

A

1948

17

537

0

0

537

0

*

15

Kouai

A

1964

10

221

0

0

221

0

*

16

Sawa

A

1953

30

455

0

0

455

114

2005

17

Hokuto

C

*

8

50

0

0

50

50

2008

18

Aobaoka

A

1986

16

357

270

54

681

0

*

19

Aino

C

1965

45

600

144

225

969

0

*

20

Ainohanazono

C

1984

13

606

0

0

606

0

*

21

Esaka

B

1965

8

360

0

0

360

0

*

22

Ibaragi

B

1952

8

350

0

0

350

0

*

23

Kokubu

B

1961

9

201

0

0

201

48

2008

24

Hanna

B

1967

5

213

48

0

261

0

*

25

Kanaokachuou

B

*

10

486

0

0

486

0

*

26

Shinseikai

B

1981

3

148

0

0

148

0

*

27

Kansaisanatoriumu

C

1968

2

192

0

0

192

0

*

28

Kansaikinen

C

1983

4

270

0

46

316

0

*

29

Sakamoto

C

1892

16

546

0

0

546

0

*

30

Hanwaizumi

C

1965

11

354

90

0

444

0

*

31

Mikunigaoka

C

1960

5

144

0

0

144

0

*

32

Hannan

C

1956

46

690

0

0

690

168

2007

33

Kokoroa

C

*

11

450

0

0

450

0

*

34

Izumichuou

C

*

5

206

0

0

206

0

*

35

Mihara

C

1963

5

562

0

0

562

0

*

36

Higashikori

C

*

10

38

39

45

122

0

*

37

Minou

C

1960

8

345

0

0

345

0

*

38

Yao

C

1913

14

513

0

0

513

0

*

39

Kaede

C

*

4

150

0

0

150

0

*

40

Shinabuyama

C

1971

8

273

0

0

273

0

*

41

Tanpisou

C

1956

12

310

0

0

310

0

*

42

Shirai

A

1965

9

322

48

29

399

0

*

43

Kisen

C

1967

3

260

0

0

260

0

*

44

Hamadera

C

1930

20

749

0

0

749

0

*

45

Ozone

C

1956

16

557

0

0

557

0

*

46

Izumigaoka

C

1963

6

257

0

4

261

0

*

47

Shionomiya

C

1969

10

384

60

0

444

0

*

48

Asakayama

C

1922

67

948

38

185

1171

102

2008

49

Hirakataryoiku

C

1969

28

50

0

440

490

0

*

Source:(1) Table 1 is a modified version of the original table in (Takaya, 2016, p.44)(2) Statistical data are derived from the homepage of each hospital and the following websites:
Osaka Association of Psychiatric Hospitals: http://www.daiseikyo.or.jp/
Kinki Regional Bureau of Health and Welfare: https://kouseikyoku.mhlw.go.jp/kinki/Japanese Association for Emergency Psychiatry: http://www.jaep.jp/

7

Journal of Japanese Management Vol.1, No.1, November 2016

ISSN 2189-9592

Table 2. Private Psychiatric Hospitals with Psychiatric Beds Only
NumberName of hospital(Abbreviation)

Governancetype

Medicalarea

Opening year

Regulardoctor

Psychiatricbeds

Psychiatricemergency
beds

Approval
year

Approved
training
facility

Accredited
facilitity

16

Sawa

A

A

1953

30

455

114

2005

1

1

20

Ainohanazono

C

A

1984

13

606

0

*

1

0

37

Minou

C

A

1960

8

345

0

*

1

0

45

Ozone

C

A

1956

16

557

0

*

0

0

11

Orenji

A

B

1965

3

240

0

*

0

1

15

Kouai

A

B

1964

10

221

0

*

1

0

40

Shinabuyama

C

B

1971

8

273

0

*

1

1

7

Keihan

A

C

1954

9

306

0

*

1

0

9

Neyagawa

A

C

1965

10

267

60

2014

1

1

14

Kosaka

A

D

1948

17

537

0

*

1

1

29

Sakamoto

C

D

1892

16

546

0

*

1

0

38

Yao

C

D

1913

14

513

0

*

1

0

3

Yoshimura

A

E

1976

6

222

0

*

1

0

13

Osakasayama

A

E

1966

6

279

0

*

1

0

41

Tanpisou

C

E

1956

12

310

0

*

1

1

31

Mikunigaoka

C

F

1960

5

144

0

*

1

1

32

Hannan

C

F

1956

46

690

168

2007

1

1

35

Mihara

C

F

1963

5

562

0

*

1

0

1

Mizuma

A

G

1959

11

541

0

*

1

0

2

Kijima

A

G

1963

13

492

0

*

1

1

4

Sakane

A

G

1965

3

150

0

*

0

0

8

Shichiyama

A

G

1599

13

640

48

2011

1

1

10

Kaizukachuou

A

G

*

9

406

0

*

1

0

12

kumeda

A

G

1962

9

494

0

*

0

0

27

Kansaisanatoriumu

C

G

1968

2

192

0

*

0

0

33

Kokoroa

C

G

*

11

450

0

*

1

0

34

Izumichuou

C

G

*

5

206

0

*

1

1

39

Kaede

C

G

*

4

150

0

*

1

0

43

Kisen

C

G

1967

3

260

0

*

1

0

44

Hamadera

C

G

1930

20

749

0

*

1

1

Source:(1) This table has been modified from one presented by (Takaya, 2016, p.45).
(2) Data for analysis are derived from the homepage of each hospital and the following websites:
Osaka Association of Psychiatric Hospitals: http://www.daiseikyo.or.jp/
Kinki Regional Bureau of Health and Welfare: https://kouseikyoku.mhlw.go.jp/kinki/Japanese Association for Emergency Psychiatry: http://www.jaep.jp/
Osaka Prefectural Government: http://www.pref.osaka.lg.jp/iryo/keikaku/keikaku2013to2017.html
The Japanese Society of Psychiatry and Neurology: https://www.jspn.or.jp/
Japan Council for Quality Health Care: http://jcqhc.or.jp/

8

Journal of Japanese Management Vol.1, No.1, November 2016

ISSN 2189-9592

cluded from the analysis. Following theseexclusions, 30 private psychiatric hospitals remained, as listed Table 2. Values of 1 and 0 for“approved training facility” mean, respectively,that the Japanese Society of Psychiatry and
Neurology approved or did not approve of eachfacility as a psychiatric specialist training
facility. Values of 1 and 0 for “accredited facility”
mean, respectively, that Japan Council for
Quality Health Care (JCQHC) has or has notaccredited the facility (hospital).
Notations “A”–“G” for “medical area” inTable 2, which correspond to those in Figure 3
and Table 3, indicate the second medical areasin Osaka, Japan, to which each hospital belongs.
Medical areas are arranged alphabetically.

Figure 3. Second Medical areas in Osaka, Japan.

Figure 3 displays Osaka’s medical areas

Source: This Figure is modified, by the author, fromgeographically.

the original version shown in the data in the website;
http://www.pref.osaka.lg.jp/iryo/keikaku/keikaku201

2. Uneven distribution of private psychiatric

3to2017.html

hospitals in terms of clinical activity
As mentioned above, Takaya pointed out

Table 3. Private hospitals licensed to charge athat it is not possible to say that having a license

psychiatric emergency hospitalization fee andtotheir medical areas

chargeapsychiatricemergency

hospitalization fee, which represents clinicalactivity, is related to either a hospital’s
governance type or the separation of ownershipand management 28 . Takaya also pointed out
that

exceptfortheMishimaandMinamikawachi medical areas, every medical
area has at least one hospital licensed to charge
a psychiatric emergency hospitali-zation fee29 .
These are shown in Figure 3 and Table 3, where

Source: This Table is modified from Tables 1 and 2,

each “hospital number” corresponds to thatand Figure 3.

used in Table 1 and Table 2. Hospitals withnumbers in parentheses in Table 3 are included

Accordingin Table 1 but not in Table 2.

to

Table

3,

an

unevendistribution of hospitals having “a license to
charge a psychiatric emergency hospitalization
29 Takaya, 2016, p.48

28 Takaya, 2016, pp.41-47

9

Journal of Japanese Management Vol.1, No.1, November 2016

ISSN 2189-9592

fee” can be observed among each medical area.

estimate: －0.00485, p-value: 0.1638).

3. Relationship between the numbers of regular

5. Overall hospital competence and the number

doctors and psychiatric bedsof regular doctors or psychiatric beds

This study considers having a license to

The result of bivariate logistic regression

charge a psychiatric emergency hospitali-zation

analysis between the number of regular doctors

fee as an indicator of clinical activities in each(independent

hospital. Each hospital is assigned a specificauthorizations (dependent valuable) showed nonumber of hospital beds by each prefectural

significant correlation (parameter estimate: －government, a number that is indirectly, under

0.1183, p-value: 0.0922). Neither did the result

the control of the Ministry of Health, Labourof bivariate logistic regression analysis between

and Welfare. The allocated number of beds

the number of psychiatric beds (independent

corresponds to the area of the hospital wards.

valuable)andTherefore, the number of beds can be considered(dependentvaluable)as an initial value. On the other hand, theestimate: －0.0013, p-value: 0.5459).

valuable)

and

JCQHC
show

JCQHC

authorizations(parameter

number of regular doctors can be considered avariable in each hospital’s evolutional process

6. Competitiveness in each medical area

because each hospital can or should recruit or6.1. Clinical competence as a result of internal

control the number of the doctors in order tocontrol

improve its activity. However, Takaya foundThe relationship between clinical activity

multico-llinearity between number of beds andand number of regular doctors in private

number of regular doctors in the 30 private

psychiatric hospitals will be discussed below bypsychiatric hospitals30.

medical area, based on the data in Table 2.
Of the four hospitals in medical area A,

4. Clinical competence and the number ofhospital 16 has the most stable number ofregular doctors or psychiatric beds

doctors (30). In medical area C, Hospital 9 has

The result of bivariate logistic regression

the most stable number of doctors (10). In

analysis between the number of regular doctors

medical area F, Hospital 32 has the largest(independent valuable) and having a license tonumber of regular doctors (46), and in medical

charge a psychiatric emergency hospitalization

area G, Hospital 8 has the second highestfee (dependent valuable) showed no significant

number of regular doctors of all 12 hospitals.

correlation (parameter estimate: －0.2020, p-

These results suggest that the number ofvalue: 0.0525). Neither did the result of

regular doctors seems to have an importantbivariate logistic regression analysis between

effect on the clinical activities of each medical

the number of psychiatric beds (independentarea’s hospitals. A strict standard is imposed tovaluable) and having a license to charge aobtain a license to charge a psychiatric

psychiatricemergency

hospitalization

emergency(dependentvaluable)

show

fee

(parameter

hospitalization

fee.

This

organizational hurdle can be an indicator for the

30 Takaya, 2016, p.46

10

Journal of Japanese Management Vol.1, No.1, November 2016

ISSN 2189-9592

presence of internal control as well as external

2001, p.68). As indicated in Table 1, sevencontrol; however, the mechanism of this internal

hospitals were founded in the 1950s and 23 incontrol is unclear.

the 1960s (in all, opening-year data was

6.2. Overall hospital competence as a result ofavailable for 26 hospitals). Thirty hospitals out

internal control

of 42 (71%) were founded in the 1950s or 1960s.

On the other hand, the factor “accredited

As shown in Table 2, six hospitals were foundedfacility,” which indicates JCQHC approval, canin the 1950s, and 12 hospitals in the 1960s (inbe an indicator representing the outcome ofall, opening-year data was available for 26

hospitals’ activities as well as an indicator of

hospitals) Eighteen hospitals out of 26 (69%)

external control. In Table 2, all hospitals

were founded in the 1950s or 1960s.

licensed to charge a psychiatric emergency
hospitalization fee are “accredited facilities”
according to JCQHC. However, not all hospitals
approved by JCQHC have a license to charge
psychiatricemergency

hospitalization

fee.

Therefore, a license to charge a psychiatricemergency hospitalization fee is more difficult
to get.
6.3. Relationship between internal and external
control
Official information and data for eachprivate hospital are too limited, as mentioned
above, and internal control mechanisms andgovernancetherefore,

functionswecannotarenotrevealed:

help

considerthemechanism of internal control as being
performed in a “black box”. Therefore, indicatorsfor external controls described above could be auseful tool for estimating the results of internal
controls.

Figure 4. Evolutional processes under a combination

6.4. Evolution of private psychiatric hospitals

of internal and external controls, about (1) the

Private “psychiatric hospitals” (in a broad

hospital’s clinical competence and (2) the overall

sense) in Japan were founded after the Second

hospital’s competenceWorld War perhaps in response to the public

Source: Author

demand. This can be considered “the initialstate” of the subsequent evolutionary path of

The discussions in Sections 5-1, 5-2, and 5-

the modern Japanese psychiatric hospital

3 are depicted by Figure 4. Numbers (1) and (2)system. Most private psychiatric hospitals werein Figure 4 show the systematic evolutionalfounded in the 1950s and 1960s (Kazamatsuri,

processes of private psychiatric hospitals in11

Journal of Japanese Management Vol.1, No.1, November 2016

terms of internal and external controls. From an

The

ISSN 2189-9592

first,

second,andfifth-ranking

external perspective, internal control is usually

hospitals in PB: RD in Table 4 (Hospitals 32, 16,

conducted in a “black box” region because theand 9, respectively) are licensed to charge adata and information are tightly held as

psychiatric emergency hospitalization fee. The

confidential to the institution.

PEB: PB of these hospitals is 0.24, 0.25, andOn the other hand, external control, which

0.22, respectively. Hospital 8 (Shichiyama) is an

is usually performed by regulatory agencies or

exception because it’s PED: PB is 0.075, which

the like, is exerted in the presence of available

is much lower than those of the other three

information. The term of “external control”

hospitals mentioned above.

shown in (1) and (2) in Figure 4 seems different
from “external control” defined in (Fujioka, 2013,

Table 4. Psychiatric Beds per Regular Doctor andp.197), but can be an indicator of external

Psychiatric Emergency Beds per total bed (PB/RD

control or official approval from externalratio and PED/PB ratio, respectively)

regulatory agencies or the like. In this sense, thesystem of private psychiatric hospitals has
evolved by strengthening internal controls ineach hospital, and by receiving a license to
and/orofficial

accreditationasexcellent

hospitals.
7. Hierarchical formation in terms of clinicalcompetence
Despite multiple attempts by the author,
previously disclosed data and information
related to the number of regular doctors andnumber of psychiatric beds has been elusive toretrieve, even from disclosure system of theregulatory agency. Therefore, a cross-sectional
study was conducted to investigate hierarchicalformation of the private psychiatric hospital

NumberHospitals(Abbreviation)

32
16
15
41
9
31
14
7
40
29
45
38
3
39
44
2
33
34
37
10
13
20
1
8
4
12
11
43
27
35

HannanSawa
Kouai
TanpisouNeyagawa
Mikunigaoka
KosakaKeihanShinabuyama
Sakamoto
Ozone
Yao
Yoshimura
Kaede
Hamadera
KijimaKokoroa
Izumichuou
Minou
Kaizukachuou
Osakasayama
Ainohanazono
MizumaShichiyama
SakanekumedaOrenji
Kisen
Kansaisanatoriumu
MiharaRegular PsychiatricMedicalPB/RDdoctorbeds
district
Ratio
(RD)
(PB)
F
A
B
E
C
F
D
C
B
D
A
D
E
G
G
G
G
G
A
G
E
A
G
G
G
G
B
G
G
F

46
30
10
12
10
5
17
9
8
16
16
14
6
4
20
13
11
5
8
9
6
13
11
13
3
9
3
3
2
5

690
455
221
310
267
144
537
306
273
546
557
513
222
150
749
492
450
206
345
406
279
606
541
640
150
494
240
260
192
562

15
15.2
22.1
25.8
26.7
28.8
31.6
34
34.1
34.1
34.8
36.6
37
37.5
37.5
37.8
40.9
41.2
43.1
45.2
46.5
46.6
49.2
49.2
50
54.9
80
86.7
96
112.4

Psychiatricemergency PEB/PB
beds
Ratio
(PEB)
168
114
0
0
60
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
48
0
0
0
0
0
0

0.24
0.25
0
0
0.22
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0.075
0
0
0
0
0
0

Source: This Table is modified from Table 2.

system in this study.
Table 4 is modified version of Table 2, in

Hospital 8 (Shichiyama) in Table 4 isthat the PB/RD Ratio (PB:RD), which is defined

located in medical area G in Figure 3. The PB:

as psychiatric beds per regular doctor, andRD of Hospital 8 is ranked eighth among all 12

PED/PB Ratio (PEB:PB), which is defined as

hospitals in medical area G (Table 2), which

psychiatric emergency beds per psychiatric bed,means Hospital 8 seems to be an ordinary

are calculated, and the PB/RD Ratio column

private psychiatric hospital. On the other hand,rearranged in ascending order (unnecessary

Hospitals 32, 16, and 9 have top-ranked PB:RD

columns in this section are omitted).

in their respective medical areas (F, A, and C).
12

Journal of Japanese Management Vol.1, No.1, November 2016

ISSN 2189-9592

In this sense, PB:RD=49.2 and PEB:PB=0.075

to the letters in Figure 3, and Tables 3 and 4. In

for Hospital 8 may be an outlier among

Table 5, the deviation values were derived based

Hospitals 32, 16, 9, and 8.

on the averages and standard deviations in

Hospital 16 in Table 2, 3 and 4 is the only

Japan.

private psychiatric institution licensed as a

The deviation value of medical area G andSocial medical corporation (Shakai Iryou-houjin

H is significantly high and low, respectively,

in Japanese), which suggests the hospitalwhich shows the uneven distribution ofundertakes a very high level of public-interest

psychiatric beds in Osaka, Japan. The causal

activity.

medicalfactors for situation remain to be investigated,

corporation was established in 2008 31 . This

though the result here is similar to that offeredsystem aims to act strongly in the publicin the discussion of Table 4. Medical area Ginterest.

medicalreceived excessive total psychiatric beds (Table

corporations in Osaka, Japan is 31 as of 1 April,5), but was not successful in obtaining

201632.

psychiatric emergency beds (Table 4).

The

The

systemofnumber ofsocialsocialHospital 14 in Table 2 and 4 is the only
hospitalestablished

Corporation

bySocial

Welfare(Shakaifukushi-houjin(3) ConclusioninThis study showed that, psychiatric beds asJapanese)33. The other hospitals in Table 2 andwell as incorporated psychiatric hospitals that

4 are established by incorporated medical

have “a license to charge a psychiatricinstitutions.

emergency hospitalization fee,” are distributed
unevenly among medical areas in Osaka.

8. Uneven distribution of psychiatric beds

On the other hand, a hierarchical structure

A working paper No. 352 of the Japan
Medical

Association

Researchof private psychiatric hospitals was observed in

Instituteeach medical area where an incorporated

reported the distribution of psychiatric beds inpsychiatric hospital possessing “a license to

Osaka (www.jmari.med.or.jp). The reported

charge a psychiatric emergency hospitalization

deviation value of the number of psychiatricfee” is located.

beds per person for each medical area is shown

The result of this study might provide ain Table 5,. Letters A–H in Table 5 corresponds

framework for investigating other types of
hospitals in the absence of internal hospital
data.

Table 5. Uneven distribution of psychiatric beds

A limitation of this study is that theinternal controls utilized in each hospital could
not be discerned because of too limitedly
Source: This Table is created based on the data in thedisclosed data, and that the hierarchicalwebsite; www.jmari.med.or.jp.

formation process of incorporated psychiatricIseikyoku/0000073016_10.pdf

31 http://www.mhlw.go.jp/topics/bukyoku/isei/igyou/

33 The Ministry of Health, Labor and Welfare:dl/shakaiiryouhouzin1.pdf
32 http://www.mhlw.go.jp/file/06-Seisakujouhou- 10800000-

http://www.mhlw.go.jp/bunya/seikatsuhogo/shakaifukushi-jigyou3.html

13

Journal of Japanese Management Vol.1, No.1, November 2016

ISSN 2189-9592

hospitals could not be investigated utilizing

Soshikitime-series data.

Institutions). Tokyo: Dobunkan Shuppan.

(Self-reforming

MedicalIn the future, the process formation of the

Matsubara, Yumi, and Tanaka, Shigeru (2004).

psychiatric hospital system remains to be

Iryou-houjin no gavanansu ni tsuite (Oninvestigated from an historical viewpoint in

the governance of incorporated medicalorder to reveal the systems influencing Japan’s

institutions). Tokyo: The ministry of Health,

medical institutions.

Labour and Welfare. (http://www.mhlw.go.
jp/topics/bukyoku/isei/igyou/igyoukeiei/ken

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toukai/4k)

Fujioka, Eiji (2013). Iryokikan no Gavanansu to

Takaya, Masahiko (2015). Nihon ni okeru

Kansa (The governance and inspect of

Byouin-seido no Sinka to Kouekisei ni

medical institutions). Tokyo: Chuokeizai-

Kansuru

Sha.

Senmon-i Seido wo Reitoshite - (OnKousatsu-

Ipanbyouinto

Hotta, Kazuhiro (2012). Hi-eirisoshiki no Riron

Evolution of Hospital System in Japan andto Konnichitekikadai (The theories about

Public Interest of Japanese Hospitals -nonprofit

current

Especially on Regular Hospitals and on

subjects of research). Tokyo: Maruzen

Training for Specialists -). Journal of

Publishing.

Association for Research on NPOBP, Vol.17,

organizations

andKawabuchi, Koichi (2004). Dairokuji Iryohou

pp.107-120.

kaisei no Pointo to Taiousenryaku (The－ (2016). Iryou-houjin ni okeru gavanansu topoints of the 6th revision of the Medical

akutibiti

Care Act, and the strategies for it). Tokyo:

Jishoubunsekijyoron- (The RelationshipJapan Medical Planning.

between Forms of Governance and Activity

Kazamatsuri, Hajime (2001). Wagakuni noin-Seishinkabyouin

Incorporated

Medicalni

okeru

Institutions-

Seishinka-iryou wo Kangaeru (On thePreliminary

psychiatric medical care in Japan). Tokyo:

Analysis of Psychiatric Hospitals-). Journal

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of Association for Research on NPOBP,

Matsuo, Makoto (2009). Gakushu-suru Byoin

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Vol.18, pp.39-49.

(Received: May 31, 2016)(Accepted: August 29, 2016)14

Journal of Japanese Management Vo.1, No.1, November 2016

ISSN 2189-9592

Entrepreneurial Activities and Residential Networks ofCreative Areas in Japan and Korea
Rihyei Kang

Niigata University of Pharmacy and Applied Life Sciences
Japan Creativity Society E-mail: rie@nupals.ac.jp
Takahiro Kawaji

Kurume University
Japan Creativity Society E-mail:kawaji_takahiro@kurume-u.ac.jp
Abstract
This study surveyed and compared the creative and entrepreneur activities of small-size
local areas in Japan and Korea adopting creative city policies with qualitative analysis. The
result showed that the tolerance of these areas had influence on the entrepreneur activities, andthe strength of social network among citizens had related with the effect of creative city policies.
Along with the findings from the previous studies, this study proposes a new finding that
residential network, which has not been discussed in the original creative city theory, and its
strength could be essential factors affecting success of creative city policy and entrepreneur
activities.
Keywords
Creative city, Entrepreneurship, Residential Networks(1) Introduction

attract creative class, give birth to creative firms,

The theoretical background of creative cityand finally succeed in regional vitalization

policy can roughly be divided into two streams.

through making its environment attractive for

One is based on Landry (1995) and the other iscreative workers. Specifically, he classified

on Florida (2004). This study is based on theprofessions such as scientists, artists, designers,

latter as it is more widely adopted.

entertainers as “Super Creative Core” andAs a bearer of modern economy, Florida

defined adjacent professions, such as managers,

pointed out the existence of “creative class,” a

as “Creative Professions.” People belonging togroup of people engaged in economic activities

these classes exceeded 30 percent of total

with their creativity as initial capital, andpopulation in the United States according to“creative economy” sustained by them. He

Florida (Florida, 2004).

criticized conventional policy which tried toCreativeindustry

excelsothersinincrease population by inviting large-size

production effectiveness. For example, althoughfactories, and insisted that local area could

workers of creative industry accounted only four15

Journal of Japanese Management Vo.1, No.1, November 2016

ISSN 2189-9592

to six percent of the total workforce in thein the beginning of the 21th century, and some

United Kingdom, its output of about 21 trillion

of local governments had adopted it as theyen far exceeded that of financial sector

theoretical basis for their policies.

(NESTA, 2004). According to Yoshimoto (2009,First of all, Kanazawa Association ofp.42), Japanese creative industry had 250

Corporate Executives started an international

thousand offices and 2.19 million employees inconference “Kanazawa Creative City Confe-

2006, which accounted for 4.4% and 4.0% of therence” in 2001. Then Yokohama came to the firstwhole offices and employees respectively.

city to adopt creative city policy by establishing

According to the trial calculation of Nomura“Creative City Promotion Section” and starting(2012, p.23), the output of Japanese creative“Creative City Yokohama” project in 2004.

industry was 64.4 trillion yen, comparable to

Sendai, Kobe and some other cities followed

those of agriculture (8 trillion yen), financial

Yokohama, but this movement was mainly

industry (98 trillion yen), steel industry (16observed in large cities such as ordinance-

trillion yen), automobile industry (including

designated cities in Japan (Sasaki, 2012).

parts industry) (42 trillion yen), medical welfare

Japanese Agency for Cultural Affairs

industry (42 trillion yen). This indicates thatlaunched “Creative Cities Network Japan” increative industry is one of highly efficient2013, which held small-size autonomies such asindustries which can produce large output with

Higashikawa town in Hokkaido prefecturesmall workforce.

(population 7,800), Nakanojo town in Gunma

Florida (2004) pointed that three Ts - Tech-prefecture (population 17,000). The Agency

nology, Talent and Tolerance - were required inannounced that it would promote the creative

order to enhance creative economic activities ofcity policy even for areas populated below

these classes. The area with these three

100,000.

elements were said to be able to bear creativity,

However, most of researches have focused

attract creative workers, give birth to creativeon large cities, and few of them have discussed

firms created by entrepreneurs, and keep

whether this creative city policy model worked

growing regionally.

even for a small-size autonomy. Kang and
Kawaji (2015) conducted fieldwork on amarginal settlement implementing the policy,
and found that although it was effective forentrepreneur

activities

andbusiness

performance in the area, unexpected reverse
economic effect was caused by the fact that
regional intolerance drove out immigrated
entrepreneurs and artists from the area.

Figure 1. Florida's 3Ts for Creative City

Creative city policy has been aggressively

Source: Florida, 2004

pursued in not only Japan but also Korea,(2) Background in Japan and Korea

mainly among large to middle cities. For

Florida’s theory was introduced into Japan

instance, Incheon city joined UNESCO Creative
16

Journal of Japanese Management Vo.1, No.1, November 2016

ISSN 2189-9592

Cities Network in the field of Craft and Folk Art,

residential approach. That is Seongmisan

Seoul city did in the field of Design and Jeonju

Village in Mapo district of Seoul city, where

did in the field of Gastronomy.

community development has been led by

In addition to this, Korean government

residents. They started business such as

started to implement creative city policy1.

theaters, schools and cafes consecutively, andbecame popular even among Japanese citizens
engaging in regional vitalization. Related books
were published (Empublic & Nihon Kibou
Seisakujo, 2011) and visiting tours wereconducted in Japan2.
(3) Research
1. Research Question
Creative city policy has come to be
implemented in not only large cities, but also
small-size areas as stated above. Kang and
Kawaji (2015) conducted a survey on a marginal
settlement implementing the policy, and foundthe unexpected economic effect caused by thefact that regional intolerance ousted creative

Figure 2. Creative & innovative cities and supporting

workers to entrepreneur activities outside thecompanies in Korea.

area. In order to explore the difference between

Source: Korean Creative Economy & Innovation

characteristics specific to the creative city

Center, 2016.

activities of small-size areas and those of large
cities, we decided to conduct surveys in wider

The government designated eighteen cities

areas.

throughout Korea, where leading companies

Specifically, our objectives are to explore (1)were designated as implementing entities, andwhether creative city policy is effective even forstarted “Creative Economy Innovation Center”

small areas, (2) if it is so, how it contributes toproject aiming at creation of creative economy

development of the area, (3) what kind of

by a policy-driven approach. This is a

influence entrepreneur activities receive, bymechanism

issurveying typical cases of small-size areas

responsible for promotion of creative economy invitalizing communities with creativity (two in

the area.

Japan, one in Korea).

in

which

each

company

On the contrary to the governmental
approach, there is an area famous for its

2 Research Method

1 In President Park Geun-hye’s first press conference inat that time, some of which included “Seongmisan Cooperative Visiting Project” by NPO Corporation Akatsuki,“Let’s go to see, as ‘town development’ in Seoul is awesome”
by Bukasu Do! Regional Revitalization Section.

Jan 6th 2014 after her inauguration.
2 We encountered some of tours from various places, suchas Tottori prefecture in Japan. Many other tours were held

17

Journal of Japanese Management Vo.1, No.1, November 2016

We adopted qualitative approach for small

ISSN 2189-9592

Kang (2013) studied Sendai and Kobe cities.

areas vitalizing communities using creativity.

For small creative areas, there are few

Specifically, we visited related facilities andstudies conducted at this point, but the study ofinterviewed policy makers. The interviews were

small area with population decreasing could

recorded, converted into text, and analyzed withmislead us to the problem of depopulation. Thus

SCAT 4-step coding method (Otani, 2007).

we excluded this field and concentrated on

The surveyed areas were Yanedan district“creative small area with population increasing,”

Kanoyaprefectureand selected three typical areas, Yanedan,(conducted in 2014), central area of Kurume city,

Kurume city and Seongmisan Village. They are

Fukuoka prefecture (2015), and Seongmisan

not only small size population increasing areas,

Village in Mapo district of Seoul city, Korea

but also famous for creative activities. Yanedan(2016).

has its own source of income based on its

in

city,

Kagoshima

creative

regional management philosophy(Toyoshige, 2004). Creative regional economic
activities of Kurume city are supported byentrepreneurs (Kawaji et al., 2016, p.1-4).
Seongmisan

Village

has

built

its

local

infrastructure from the point of building
resident associations (Empublic & Nihon Kibou
Seisakujo, 2011, pp.40-45).
Table 1. Creative city research matrix

Figure 3. Creative cities in Japan and Korea
Source: Prepared by authors.

Population

Large City

Small Area

Decreasing

Kobe

Depopulation

Increasing

Yokohama
Sendai

Not studied

Let us explain the reason why these areas
were chosen. There are four research fields(4) Results

regarding creative cities (Table 1), large city

1. Yanedan district

with population decreasing, large city withpopulation

increasing,

small

area

Yanedan district is a small settlement inwithKanoya city, Kagoshima prefecture. It had

population decreasing, and small area with

about three hundred residents and aging rate of

population increasing.

over 30 percent in 2015. It had carried out

For large creative cities (with population

aggressive reforms (starting town businesses

around more than 0.5 million), there are various

producing and selling Shochu (Japanese

reports already. For example, City of Yokohama

traditional white liquor), selling deodorants,

and Suzuki (2010, p.130-231) summarizedetc.) since Mr. T (age 75) was installed as acharacteristics of twelve creative cities, andpresident of a residents' association.
18

Journal of Japanese Management Vo.1, No.1, November 2016

ISSN 2189-9592

Table 2. Concepts extracted from interviews (Yanedan district)
Interviewee

Concepts

T

A

B

C

D

E

70s
Male
President ofa residents'

40s
Male
Photo
Design30s
FemaleGrass
Sculpture

30s
Male
Painting

60s
Male
BronzeSculpture

60s
Male
Ceramics

++

-

-

--

--

+

-

--

-

+++

-

-

N/A

+++

++

+++

++

+

++

---

---

---

---

--

++

+

-

-

-

+

N/A

+++

-

+++

+++

+

+++
+++

--++

--++

--+++

--++

+
++

association

Enhancing creativityof the area
Enhancing creativityof his/her own
Enhancing skillsof his/her own
Tolerance of the area
Entrepreneur activities
in the area
Entrepreneur activities outside
the area
Willing to live continuously
Total Valuation

Source: Prepared by authors.

The

reformwassuccessful

and

its

On the other hand, artists suffered from such

residential internal revenue sources totaled toindifference,haddifficultyinadapting

be over five million yen, which made it possible

themselves to old conventions in the area, andto distribute bonus of ten thousand yen to eachwere apt to disconnect from association withof one hundred twenty two households.

local residents. Tolerance of the area was at the

An artists invitation project had been

worst level, which made the artists discontent.

started since 2006, aiming at enhancing

As a result, the artists got out of the district

cultural level of the area by letting artists live

to outside area and achieved good performancevacant houses with low rent fee. Houses ofby actively engaging in entrepreneur activities

immigrated artists were named as Geihinkan

with firms and organizations there. This made

(VIP guest house), galleries reformed fromthe district lose some of the outcome of creative

vacant houses were scattered around theeconomy, but they still could establish its brand

district, and an art festival was held once a year.

as “village of artists.” Thus both of residents andWe interviewed Mr. T and all artists living inartists accomplished part of their objectives.

the district at the time of survey. The

In contrast to this, one of the essential

interviewed contents were converted into text,

objectives of creative city policy, “development ofcoded, and reconstructed by concepts (Table 2).

regional creativity,” was not observed in the

The table indicates the creative city policy

area, whereas it was active outside the area.

in the area caused discontent, dissonance andJudging from this finding, we confirmed that adisagreement on future direction in both sides

creative economy model was effective even forof residents and artists.

small-size autonomies, but the largest inhibitor

Residents had little interest in creativity of

was tolerance.

artists or enhancement of regional creativity.
19

Journal of Japanese Management Vo.1, No.1, November 2016

2. Central area of Kurume City

ISSN 2189-9592

with person.” According to Mr. I, each subject

Kurume city is a core city holding thirty

engaged in a job which he/she believed to realize

million people, and one of few cities withhis/her “belief” and worked separately before

increasing population in Japan. Nishinippon

she came to Kurume. They tried to vitalize theShinbun (2014) listed three reasons for thearea using various methods, but such trials

increase as follows; (1) low house acquiring cost,were not successful. One of the reasons could be(2) reliable medical system, (3) increasedlack of connection among them. “We knew each

employment by local firms, which reduced

other’s face, but that is all.”draining out of young workforce.

After meeting at an event held by city

For promoting creative activities in city,

government and noticing this problem, they

Kurume city invited Ms. Yuko Yamashita to

startedHighmart Kurume, a third sector company. She(Yamashita, 2015, p.18) in which participants

was a regional vitalization producer andconnected their pieces of wisdom. “It did not

succeeded in promoting creative activities income out in a good shape actually” (Yamashita,urban areas such as Toyama city (Yamashita,

2015, p.17) at first, but “Wisdom such as vision,2013). Under her planning and guidance, we

idea, network in each area began to connect

conducted

Connection

Project,”

interviews

toeach other” (Yamashita, 2015, p.21) after

activities

infinding that “there are many active people!”

Kurume city. Note that we moved from place to(Yamashita, 2015, p.19) in each area of Kurume

place on foot, indicating that creative activities

city according to Yamashita.

residents

non-structured“Wisdom

involvingcreative

were carried out within walkable distance.
Subjects

were

Ms.

Yamashita

stronger human relation gets. Such tendency is(indicated as Mr. Y), Mr. F, a designer/producer

strong in local cities, where territorial, blood andof Kurume Kasuri (a traditional splashededucational relation-ships temper the tendency.

textile), Mr. G, a Kurume Kasuri wholesaler

Under such situation, Yamashita succeeded

and a cheap sweet shop owner, Mr. H, a video

in not only connecting people, but also bringing

creator, Mr. I, a business conductor, and Mr. J, amany points connecting Kurume residents andreal estate renovator. All of them wereoutside people. For example, she invited Ms.

managers, as young as their thirties, had

Tomsuma Alternative, who is a contemporary

territorial

art performer, from Toyama prefecture in “2016relation-ship,

Yuko

In general, the eager activity gets, theandengagedinentrepreneur activities.
Most

of

interviewees

Wisdom Connection Lecture” held in Feb 2016.
startedtheir

By asking her to explain cases and information

businesses after working or studying outside

nothing to do with Kurume, she tried to break

Kurume city. All of them strongly respected Ms.

firm relationships in the area. She continues

Yamashita, and stated that she brought weak

this kind of activities, which are thought toties into strong territorial and blood ties ofbring weak ties into the area.

Kurume, which had influenced on their creative
activities at that time.

3. Seongmisan Village in Mapo District of

Yamashita said “my job is to connect person

Seoul, Korea
20

Journal of Japanese Management Vo.1, No.1, November 2016

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Table 3. Concepts extracted from interviews (Kurume city)
Interviewee

Concepts

Y

F

G

H

I

J

40s
FemaleRegional
activation

30s
FemaleTextileDesign30s
Male
Textile
Shop

30s
Male
Video
Artist

30s
Male
Share
Office30s
Male
RentalHouse

Business

Business

Coordinator

Entrepreneurial
Environment
Experience outside
KurumeBusiness Performance
Willingness to makeregional contribution
References to Strong
Network
References to Weak
Network
Respect to Yamashita

++

++

+

+++

+++

+++

+++

++

—

+++

++

+

——

+

++

+

+

+

++

+++

+++

+++

+++

+++

+++

++

++

++

+++

++

+++

++

++

++

+++

++

N/A

+++

+++

+++

+++

+++

Source: prepared by authors

A part of residential area adjacent to“we came to know that housewives usually havedowntown Seoul is known as Seongmisan

secret savings of ten million won (US$ 10,000)

Village. Twenty-five households began toor so.” Actually, most investors participating inconnect each other and engaged in regional

entrepreneur projects invested around ten

activities, taking the opportunity of building amillion won to cooperatives, restaurants,

nursery by themselves. They have continuously

groceries, cafes or theaters.

engaged in entrepreneur activities, making the

The environment of these residential

area known as a creative activity area.

businesses is, however, harsh. One of the

Today,residents

cooperatives,difficulties is specific to Korean lease contract,

restaurants, groceries, cafes, theaters and so on

in which rent increases each time of renewal.

by themselves.

“Rent rises more than twice, making us hard to

there

run

The area holds around 0.1 million residents.

continue business,” said Mr. S. Despite of it,

Two thousand citizens partici-pate in regional

more than twenty businesses have started by

activities, of which ten percent live outside theresidents for more than twenty years, indicatingarea (Empublic & Nihon Kibou Seisakujo, 2011).

their competency in entrepreneurship.

We interviewed Mr. S, a leader of

As stated earlier, not all of residents

residential activities of Seongmisan Village,

participate in these creative or entrepreneur

visited facilities in the area, and conducted a

activities. 1.8 thousand of 0.1 million residents

literature survey in March 2016. The result isparticipate, meaning that a participation ration

shown in Table 4.

is only 1.8 percent. Moreover, people living

The residents in Seongmisan Village do not

outside can also participate them. Thus,

receive any public fund, and engage in creative

although these activities are strongly related toactivities with their own funds. Mr. S told thatthe area, they can be regarded as being21

Journal of Japanese Management Vo.1, No.1, November 2016

ISSN 2189-9592

supported by weak ties, which hold residents

also strong ties, connecting entrepreneurs who

together with shared wishes such as “I want tohave strong and clear will of “want to start myprotect regional environment,” “I want to stickbusiness,” “want to be successful in business” into my own lifestyle.”

specific fields.

However, there were not only weak ties but
Table 4. Concepts extracted from an interview and literature (Seongmisan Village)
Concepts

S

Articles & Fieldworks

40s
FemaleBooks, Thesis
Visiting, Observation etc.

Entrepreneurial environment++++

Spontaneous creative activities

++

+++

Business performance—

Willingness to make regional contribution

++

+
++

References to strong network

+++

++

References to weak network

+++

++

Source: Prepared by authors.

(5) Discussion

relationships restricted inside the area had a

Viewing from the aspect of theory oflimitation (they tend to become strong ties),“strength of weak ties” (Granovetter, 1973), boththanks to the construction of connections amongof weak and strong ties had influence on

people spatially separated by Mr. Y, humancreative and entrepreneur activities in three

relations with weak ties among them werecases described in this research.

successfully formed. This type of network exerts“The strength of weak ties” is a theory

powerful influence of exchanging useful andaddressing that information of high novelty andnovel information, which is not visible fromvalue can be obtained more from weakly

inside of network with strong ties.

connected network (weak ties), such as “friend’s

In Seongmisan Village, strong ties aiming

friend,” than from strongly connected networkat starting business together were naturally(strong ties), such as blood or territory relation.

spawned among people tied weakly. This

This theory implies that weak ties enhance

mixture of weak and strong ties was observed to

exchange of information of high novelty andvitalize the area.

value, thus stimulate creative and entrepreneur

Weak ties bridge gap between strong ties,

activities.

and play an important role in conveying

In Yanedan district, artists invited fromvaluable information. This study thinks that aoutside felt intolerance to strong regional ties,

mixture of weak and strong ties facilitatesand sought weak ties outside the district.

communication and vitalizes creative andConsequently, the entrepreneur activities wereentrepreneur activities.

vitalized and content level of immigrated artists

The previous studies of creative cities haveincreased.

not put much emphasis on the connection

In Kurume city, although activities andamong residents so far. For example,
22

FloridaJournal of Japanese Management Vo.1, No.1, November 2016(2004, 2005) insisted that creative workers

ISSN 2189-9592

theory.

gathered to the area naturally as the level of

Although we made some contribution toregional creativity increased, regardless of blood

creative studies, our findings should not beor territorial relationship.

generalized as they are based on the surveys in

Our results, however, cast a doubt on it, as

limited areas and time interval. To beconnection among residents is found to be an

specifically, we focused on small population

important factor affecting creative activities.

growing areas in Japan and Korea, where

Some studies also reported the similar

creative activities were observed (Table 1). Let us

results. An international research team of EU

summarize the space and time boundarycommittee

conditions of our study as follows:(ACRE

project)

conducted

aquestionnaire survey on thirteen creative cities

a. Part of Eastern Asia centered in Japan andin EU (Martin-Brelot et al., 2010). Their result

Korea.

showed that creative workers’ willingness tob. Area where creative economic activities canlive in creative cities was much more strongly

be observed.

affected by personal connections (such as familyc. Not large region, but small area.

members or friends live in the same cities, ord. Not population decreasing, but increasingclose places) than working environment. Thisarea.

fact was inconsistent with the widely accepted

e. At the time from Dec. 2013 to Mar. 2016,

theory that good working environment withwhen our surveys were conducted.

sufficient tolerance attracted creative workers.
Their and our findings jointly indicate that

(6) Conclusion

residential network might be essential for

This research found out three importantcreative activities, and research on it should befacts.

promoted.

a.

In Yanedan district, immigrants engaging

Kang (2013) surveyed three advanced cities

creative activities escaped from strong ties

implementing creative city policy Sendai,of old residents, and sought for weak ties

Yokohama and Kobe in Japan, and pointed out

outside the district.

that although these cities helped creativeb.

In central area of Kurume city, a producer

workers by offering abandoned facilities, such

invited from outside brought weak ties andhelp might hinder spontaneous development ofcreativity from outside.

creativity.

c.

Creative economy theory originally states

In Seongmisan Village, regional active-ties
were supported by weak ties amongthat creative environment develops and attracts

residents

as

they

were

startedascreative works naturally without public support.

volunteers’ weak connections. Note that

This statement and our findings suggest thatsome activities, such as starting a businessnot only public support of facility or fund, butwith joint investment, could be supported

also policy aiming at bringing strong and weakby strong ties.

ties to residents might enhance spontaneous
creative activities when adopting creative city

Judging from these three findings, we23

Journal of Japanese Management Vo.1, No.1, November 2016

ISSN 2189-9592

concluded that when implementing creative city

human resource, but with different approaches.

policy in small-scale area, two points should be

Another approach is society type theory,

considered.

Gemeinschaft and Gesellschaft. Gemeinschafta.

Social tie is one of the required components

means a community where its members are(both of strong and weak ties arestrongly connected with territorial and blood

important).

ties, while Gesellschaft is an association where

Weak tie is necessary for creative city policy.

its members are weakly connected with benefitsb.

or contracts. The former often refers to a preThe previous study of creative cities had

modern society where people gather on

seldom focused on residential network, andcommunity events, while the latter to a modern

Florida’s creative city/economy theory insisted

global society where people communicate withthat creative workers migrate among cities

SNS. By linking weak/strong tie theory withlooking for talent, skills, and tolerance without

Gesellschaft- Gemeinschaft theory, we may

minding such network. Our findings andapproach to the problem of building ties. For

Martin-Brelot et al. (2010), however, cast doubt

example, we may say that community activities

on such a simple view.

are effective for building strong ties in

Our findings imply that strong and weakGemeinshaft while SNS are beneficial for weakties of residential network interact each other,ties in Gesellschaft.

and exert influence on will of living and creative
activities of creative workers. The underlain

Acknowledgment

mechanism is, however, unknown. Further

This research was kindly assisted by policy

research is needed for clarifying processes andmakers and staff of related organizations andvariables in it. Moreover, the way of building

facilities of Sendai city, Yokohama city and Kobe

these ties should be studied.

city. Specifically, the survey in Sendai city was

One way of approach to this problem could

assisted by the guidance and cooperation frombe management resource needed for starting

Kenichi Sato, a professor of University ofcreative or business activities. That is, byElectronic Communications. The survey inscrutinizing benefits of strong/ weak ties which

Yanedan district was kindly helped by residents

vary from resource to resource, we may clarify

and Ms. Rie Kurose, a businesswoman living in

the processes where these ties exert influence on

Kanoya city. We deeply appreciate their

the activities. For example, the benefit of strong

cooperation.

ties on human resource when starting theactivities may be “obtaining core management

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Journal of Japanese Management Vol.1, No.1, November 2016

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Impacts of Overtime Reduction on Psychological Well-Being
for Japanese Research and Development Engineers:
Positive and Negative Sides of Work Time Regulations
Tetsushi Fujimoto

Doshisha University, JapanThe Japanese Association of Administrative Science
Hideki S. Tanaka

Aomori Public University, Japan
Japan Society of Human Resource Management
Shiming Xia

Doshisha University, JapanThe Japanese Association of Administrative Science
Abstract
In recent years, Japanese employers increasingly impose restrictions on employees’ work time.
Reduced overtime work has impacted a large number of engineers employed in private firms,
making it more difficult to put in extra hours to complete their work. As a result, the incidences ofexperiencing incompletion and non-accomplishment in work have grown among Japanese engineers.
This study investigates whether and how the overtime reduction affects engineers’ work experiences
and their psychological well-being. Results show that intensification in overtime reduction
negatively affects engineers’ work experiences regardless of their managerial status. It increases
their job demands and unfinished work, while it reduces their workplace communication.
Furthermore, overtime reduction is likely to deteriorate engineers’ psychological well-being.
Reduced overtime exhibited negative indirect influence on their work engagement and mental
health via increased demands and reduced communication. Findings suggest that managing
overtime work is an important aspect of human resource management of engineers, and it isimperative that we recognize immoderate work time regulations may bring about unintended
negative consequences in engineers’ work.
Keywords
overtime reduction, engineers, work engagement, depression, Japan27

Journal of Japanese Management Vol.1, No.1, November 2016

ISSN 2189-9592(1) Introduction
Long hours of work have been regarded formany years as an important characteristic ofJapanese work lives (cf. Kuroda & Yamamoto,2012; Ogura, 2007). It is officially reported thatthe annual work hours in Japan between 1999
and 2009 were over 1800 hours, and that the
average annual hours worked exceeded 2,000
hours1 in several years during this period (SeeTable1; Ministry of Health, Labour and Welfare,2011). Full-time employees in Japan worked
approximately 2000 hours per year, and thiswas 400 hours longer than the hours theircounterparts in Germany and France worked(The Japan News, 2012).
Japanese employers, however, started to
cut back on the hours of employees’ overtime
work soon after the financial crisis hit theeconomy in 2008 (See Table 1). Employer’s
restriction of overtime work has impacted alarge number of R&D engineers employed in
private firms, making it increasingly difficult forthem to put in extra hours in work. As a result,the incidences of experiencing incompletion andnon-accomplishment in work grew among
Japanese engineers.
Japan is an island country with limited
natural resources, so that innovative,
technological contributions that R&D engineers
make are a crucial requisite for Japan’s
economic development. In order to elicit theircontinued contributions, it is important to lookcarefully at R&D engineers’ work conditions.
Up till today, a limited number of studies
have explored the psychological experiences of
R&D engineers in Japan. Fujimoto and Nakata(2007) reported that Japanese engineers’
motivation had declined between 1994 and 2005.
They found that the negative effect of
dissatisfaction with HRM on work motivation

had become exacerbated during the 9 years
between 1994 and 2005. Such results imply thatJapanese R&D engineers’ psychological wellbeing may have deteriorated during the past
two decades. Psychological well-being isconceptualized as a combination of positive
affective states such as happiness (the hedonic
element) and functioning with optimal
effectiveness in individual and social life (theeudaimonic element) (Deci & Ryan, 2008).
Huppert (2009) claims that psychological wellbeing is about lives going well, and it is the
combination of feeling good and functioning
effectively. Based on Schaufeli & Bakker (2004),
we view engagement in work and mental healthas two important factors of psychological wellbeing. While we believe that “living well” isimportant to all people regardless of occupations,
it is highly likely that well-being is an important
psychological resource which enables R&D
engineers’ creative performance at work. Yet,
only a limited attention has been paid to thisday to the Japanese R&D engineers’
psychological well-being in relation to thecircumstances of their employment.
The purpose of this study is to investigate how
the intensified reduction of overtime work inJapanese firms after the financial crisis in 2008
affected R&D engineers’ work experiences andtheir psychological well-being. Specifically, we
address the following research questions: (1)Does reduction in overtime work increase
Japanese engineers’ job demands and decrease
their workplace communication? If so, does it
exert stronger impacts on managerial engineers
than on non-managerial engineers? (2) Does
overtime reduction deteriorate engineers’ work
engagement and mental health? If so, does it
exert an indirect influence on them via
increased job demands and decreased

12007 exceeded 2000 hours. In 2007, the average reached2033 hours.

The average annual hours of work between 2002 and28

Journal of Japanese Management Vol.1, No.1, November 2016

communication, or does it exert direct impacts
on them?
This paper is organized in the following order.
First, we overview the situations surrounding
engineers’ work in Japan, and we briefly review

ISSN 2189-9592

our theoretical framework and analytic model.
Then, we provide details of our method andreport the results of statistical analysis. Finally,
we discuss our findings and conclude this paper
by indicating the direction for future research.

Table 1. Changes in Annual Work Hours between 1999 and 2009
Average of Official

Average of Actual

Average of Overtime

Year

Work Hours

Work Hours

Work Hours

1999

1834

1990

156

2000

1835

1999

164

2001

1835

1990

155

2002

1836

2000

164

2003

1843

2016

173

2004

1836

2015

179

2005

1832

2012

180

2006

1837

2024

187

2007

1841

2033

192

2008

1820

1996

176

2009

1807

1972

165

Source: Ministry of Health, Labour and Welfare (2011)
Note: The survey was conducted among full-time employees in Japan.

(2) Backgrounds
1. Work Hours in Japan
In Japan, the importance of work-lifebalance is increasingly recognized by employers
and employees, as well as the government. Mostof the past research on work-life balance evolved
around the key issue of how to reduce long hours
of work in order to ensure sufficient time forprivate life. Needless to say, regulating longhours of work is important to improve workers’
well-being. In this sense, it is probably true that
overtime restriction in and of itself is a blessing
for a majority of Japanese workers.
A cross-national comparison of the averageannual hours actually worked by employees

shows that Japan is not the only country withlong hours of work, but workers in Japan, U.S.
and Korea work equally long hours 2 (Japan
Institute for Labour Policy and Training[JILPT], 2013)3. In addition, the proportion of
employees who work more than 60 hours per
week is over 10 percent in Japan (Ministry ofInternal Affairs and Communications, 2013),
and the proportion of those who put in longhours of work is not only larger compared withother industrialized nations but is also as large
as in other developing countries (Ogura, 2008).
The average annual hours of overtime forJapanese workers between 2006 and 2008
(before the financial crisis) exceeded 180 hours.

2

3 Note that there are differences in the ways work hours areThis comparison included both full-time and part-timeworkers.

defined between OECD countries (JILPT, 2013; Ogura,2008).

29

Journal of Japanese Management Vol.1, No.1, November 2016

ISSN 2189-9592

Also, Research Institute for Advancement of
Living Standards (2009) pointed that the
average daily hours of overtime for Japanese
workers, especially men, exceeded 100 minutes.
Note that this number does not include hours of
unpaid overtime, or so-called “service overtime.”
Therefore, if we are to include those hours,
overtime work for Japanese workers will
become even longer.
Historically, overtime work has been an
integral part of Japanese management, and this“structured overtime” is one of thecharacteristics of the management in Japan.
While firms are to pay extra to employees who
work overtime,4 Japanese employers in manycases load their employees with an amount ofwork that easily exceeds what an employee canhandle within standard work hours (Sato, 2008).
Japanese employers tend to view this mismatchnecessary since it allows them to adjust flexibly
the volume of work without firing employees
during the time of recession. This mismatch isone of the important background factors thatsustained Japanese long-term employment,
and both employers and employees tacitly agree
to maintain the system. However, just after thefinancial crisis in 2008, most Japaneseemployers started to impose restrictions on
overtime work in order to reduce labor costs. A
survey on Japanese employers’ employment
adjustment practices between 2009 and 2011
revealed that, followed by a temporary
suspensionofbusinessandlayoff,approximately 30% of Japanese enterprises
regulated overtime work after the financial
crisis (JILPT, 2014). In this survey, 42.1% ofJapanese respondent firms reduced overtime
work in 2008 (immediately after the financial
crisis), and 34.7% in 2009 (See Table 2; JILPT,2014). Due to this employer reduction of
overtime, work hours for Japanese employees,
including R&D engineers, were significantly cut
down.

4 As a common practice in Japan, employees in managerial

time when trying to accomplish their work. Research anddevelopment is one of the “professional services” jobs
designated in the discretionary labor system. In addition,
managers’ work hours are usually not regulated by Japan’sLabor Standards Act.

2. Changes in Japanese R&D Engineers’ Work
Intensification in employer reduction of
overtime after the financial crisis has caused
unexpected problems in Japanese engineering
workplaces. An earlier interview research
conducted in Japanese manufacturing firms
reported that engineers underwent a serious
time shortage due to the overtime reduction,
and as a result the incidences of experiencing
incompletion/ non-accomplishment in work
were growing among them (Fujimoto,
Shinohara, Tanaka, & Nakata, 2013). In
addition, managerial engineers and teamleaders, who normally worked in discretionary
labor system5, were likely to be left with the jobtasks that their subordinates could not complete
within standard hours, so that the total amountof their work significantly increased, and moretime pressure and stress were added on them.
In general, reduced overtime may be a
blessing for workers. However, Fujimoto et al.
(2013) pointed out that due to the intensified
overtime reduction after the crisis a large
number of Japanese employees, R&D engineers
in particular, became increasingly unable to put
in sufficient amount of time in work. Findingsin this study showed that reduction of R&D
engineers’ work hours had a significant negative

positions are treated as exempt. However, “the level andtiming of assigning employees as exempt vary among firms
depending on their own long standing practices” (Kuroda &Yamamoto, 2012, pp.252).
5 Discretionary labor system is an example of the flexible
work hour system, and it is designed to allow employees incertain designated jobs to decide on how they utilize their

30

Journal of Japanese Management Vol.1, No.1, November 2016

impact on the sense of accomplishment forJapanese engineers.
These results imply that reduction of

ISSN 2189-9592

overtime may carry a connotation for R&D forengineers different from what we typicallybelieve about reducing workers’ overtime.

Table 2. Employment Adjustment Practices between 2008 and 2011 in JapanYear
Total Number of respondent companies

2008

2009

2010

2011

N

974

2,108

1,997

1,913

%

100.0

100.0

100.0

100.0

N

410

731

591

529

%

42.1

34.7

29.6

27.7

Standstill/Reduction of Employment of

N

203

344

337

309

New School Leavers

%

20.8

16.3

16.9

16.2

Standstill/Reduction of Mid-Career

N

231

377

317

276

Recruitment

%

23.7

17.9

15.9

14.4

Temporary Suspension of Business and

N

477

1,499

1,342

1,281

Layoff (Daily)

%

49.0

71.1

67.2

67.0

Temporary Suspension of Business and

N

154

379

373

406

Layoff (Hourly)

%

15.8

18.0

18.7

21.2

Cutback in Overtime Work

Source: JILPT (2014), p.60.
Note: Numbers in the table represent multiple responses.

(3) Theoretical Framework
Our main focus in this study is whether andhow overtime reduction affects Japaneseengineers’ work experiences and their
psychological well-being. We explore how
reduced overtime influences engineers’ jobdemands, unfinished work and workplacecommunication, and then how these in turnaffect their work engagement and depression.
We draw on the job demands-resources model toframework these relationships among JapaneseR&D engineers.

employee’s adaptive capability” (Bakker,
Hakanen, Demerouti & Xanthopoulou, 2007).
Specifically, job demands are “physical, social,or organizational aspects of the job that
require sustained physical and/or psychologicaleffort on the part of the employee, and are
therefore associated with certain physiologicaland/or psychological costs” (Demerouti, Bakker,
Nachreiner & Shaufeli, 2001). Examples of job
demands include work pressure (including timepressure), emotional demands, adverse physicalwork environment, role ambiguity, role conflicts
and overload.
Job resources, on the other hand, refer towork conditions that provide supportive meansfor employees when trying to accomplish theirwork. Specifically, job resources are “physical,
psychological, social, or organizational aspectsof the job that may (a) reduce job demands andthe associated physiological and psychological

1. Job Demands-Resources Model
Job demands-resources (JD-R) model(Demerouti, Bakker, Nachreiner & Shaufeli,2001) focuses on two types of work conditions,
i.e., job demands and job resources. Job
demands refer to “characteristics of the job that
potentially evoke strain, in case they exceed the31

Journal of Japanese Management Vol.1, No.1, November 2016

costs, (b) are functional in achieving work goals,
and (c) stimulate personal growth, learning anddevelopment” (Demerouti, Bakker, Nachreiner& Shaufeli, 2001). Job resources may be locatedin several different levels, includingorganization (e.g., salary, career opportunities,
job security), inter-personal (e.g., supervisor andco-worker support), organization of work (e.g.,role clarity, participation in decision-making),
and task (e.g., performance feedback, skill
variety, autonomy) (Bakker, Demerouti &Verbeke, 2004).
Generally, past research suggests that job
demands and resources are negatively related
to each other, because high demands are likely
to prevent the mobilization of job resources, andavailability of job resources are likely to reducejob demands (Bakker and Demerouti, 2007).
JD-R model suggests that an increase in job
demands and a decrease in job resources may
deteriorate individuals’ psychological well-being
and reduce their work engagement.
Work engagement is defined as a positive
work-related state of mind that is characterizedby vigor, dedication and absorption (Shaufeli etal., 2002). Since vigor and dedication are
considered as a reverse condition of exhaustionand cynicism, engagement is assumed to be
negatively related to burnout (Shimazu et al.,2008). As Schaufeli et al. (2006) stress, work
engagement and depression are negatively
related, and engagement in work ameliorates
individual mental health.

ISSN 2189-9592

resource that engineers particularly value when
they try to accomplish their work, and therefore
overtime reduction necessarily decreases theirvalued resource of time, affecting the ways inwhich engineers engage in work.
Since overtime work is often allowed forwhen Japanese employers estimate the amountof work assigned to engineers, unless the total
amount of work assignment is significantly cut
back when overtime is reduced, they are likely
to experience work overload and become unable
to complete their assignment without extra
work time to put in. Also in a situation like this,engineers may feel they have so little time forcommunication with others at work. Therefore,
we expect that overtime reduction increases job
demands and unfinished work for engineers,
while it decreases the level of their workplacecommunication, and these in turn negatively
affect engineers’ work engagement and mental
health.
Note that overtime reduction usuallyaffects work hours for non-managerial
engineers, making it more difficult for them tocomplete their work within standard work
hours. However, the work that non-managerial
engineers are unable to complete has to befinished by their managers and team leaders.
Managerial engineers and team leaders ingeneral take charge of a wider range of jobs. In
addition, leaders and managers in R&D
divisions tend to participate in multiple R&D
teams/ projects. In consequence, their job
demands may increase significantly when theymust take on additionally their subordinates’
unfinished tasks. Hence, the reduction of
overtime work may affect managers and nonmanagers differently. We predict that overtime
reduction has stronger impacts on engineers inmanagerial status, and it is likely to exert
stronger influence on work engagement andmental health for managerial engineers. In this

2. Analytic Model
The JD-R model emphasizes that job
demands and resources are the two key
determinants of employee well-being, and it ispredicted that an increase in job demands andreduction in job resources are likely to result in
deterioration of employees’ work engagement
and mental health. We argue that time is a job
32

Journal of Japanese Management Vol.1, No.1, November 2016

study, we test an analytic model as shown in
Figure 1, using data collected from among R&D
engineers in Japan.

registered at one online survey company, which
consisted of 6,740 research and development
engineers,
6,480
systems development
engineers, 5,341 systems planning engineers.
While the target number of respondents was set
for 4,500, 4,482 engineers completed the survey.
Our analytic sample for this study was 4,374
engineers, which consisted of 2,226 engineers inmanagerial positions and 2,148 engineers in
non-managerial positions.

(4) Methodology
1. Data
The data used in this study come from an
online survey “Survey on Work and Life among
Research and Development Workers” conductedby Fujimoto in March, 2012. Samples weretaken from over 22,500 Japanese engineers

Increase in
Job Demands
Intensificationof Overtime
Reduction

ISSN 2189-9592＋
Depression

ReducedTemporalResource

Engagement
Increase in
Unfinished Tasks &Decrease in
Workplace
Communication－

Figure 1. Analytic Model

2. Variables
2.1. Dependent Variable (1): Work Engagement
Work engagement was measured by using
the shortened Japanese translation of Utrecht
Work Engagement Scale (UWES, Schaufeli,
Bakker, & Salanova, 2006; Shimazu et al., 2008).
The 9 items in the shortened UWES
represented 3 facets of engagement (vigor,
dedication, and absorption), including items
such as “At my work, I feel that I am burstingwith energy (vigor),” “My job inspires me(dedication),” and “I get carried away when I am
working (absorption).” Responses ranged from
“1= strongly disagree” to “4= strongly agree”,
such that higher scores indicated stronger
engagement in work. We computed the averageof these 9 items and used it as a composite scale.

The internal reliability (Cronbach’s alpha) of thescale was .93 for managerial engineers and .94
for non- managerial engineers.
2.2. Dependent Variable (2): Depression
Depression was measured by using 10
items from the Japanese version of Selfreporting Depression Scale (Zung, 1965).
Respondents were asked their physical andmental conditions (e.g., “I feel down andmelancholy,” “I cannot sleep at night” etc.) witha 4-point response scale (1 = hardly ever to 4 =always.) We computed the average of these 10
items and used it as a composite scale. Theinternal reliability of the scale was .60 for bothmanagerial and non-managerial engineers.
2.3. Intervening Variable (1): Job Demands
Job demands was measured by a scale
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Journal of Japanese Management Vol.1, No.1, November 2016

which is the unweighted average of thefollowing three items: “Do you think that thevolume of work is balanced with the amount oftime available in your workplace? (4=strongly
disagree, 3=disagree, 2=agree, 1= strongly
agree.) ” “Because of a shorter delivery period,
many people at my work cannot work
satisfactorily.” “During the past year, I have had
verylittletimeindelivering
mywork.”(4=strongly agree to 1= strongly
disagree.) The internal reliability of the scale
was .64 for both managerial and nonmanagerial engineers.
2.4. Intervening Variable (2): Increase in
Unfinished Work
Increase in unfinished work was measured
by using a single item phrased “During the past
year, I am increasingly being unable to finish
my job (1= strongly disagree to 4= strongly
agree).”
2.5. Intervening Variable (3): Decrease in
Workplace Communication
Decrease in workplace communication was
tapped by a single item phrased “During thepast year, the atmosphere for communication
has deteriorated at my work (1= strongly
disagree to 4= strongly agree).”
2.6. Focal Independent Variable (1): Reduction
in Overtime Work
The focal independent variable in thisstudy was intensification of overtime reduction.
Respondents were asked whether reduction in
overtime work had been intensified during thefive years prior to the survey (i.e., between 2007
and 2012). In our analysis, the variable wasdummy-coded as 1= intensified, 0= no change orrelaxed.
2.7. Focal Independent Variable (2): Managerial
StatusManagerial status was coded as 1=manager,
0=non-manager.
2.8. Control Variables

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We included the following independent
variables as controls. First, years working for
current employer were measured in years. We
controlled for years working for current
employer, instead of respondents’ age, because
these two variables are significantly and highly
correlated each other (r=.662). Educational
attainment was measured as 1=junior highschool or high school, 2=some college, 3=college,
4=master degree, and 5=doctoral degree.
Income in the past year (in Japanese yen) wascoded as 1=less than 3 million yen (equivalent
to approximately US $35,000 or less), 2=3.003.49 million yen (approximately US $35,00040,000), 3=3.50-3.99 million yen, … 15=9.509.99 million yen, and 16= 10 million yen(approximately US $120,000) or over. Monthly
overwork hours were measured in hours.
Number of projects currently involved was also
controlled. Type of industry was dummy-coded,
such as communication/IT (reference category),
manufacturing, or other types of industry.
Finally, area of work was dummy-coded as
research(reference
category),
development/planning, information processing/software development, or other areas.
3. Statistical Procedure
Our analysis proceeded in two steps. First,
we conducted mean comparisons between
managerial and non-managerial engineers inovertime reduction, work engagement,
depression and other major job outcome
variables. Then, Ordinary Least Squares (OLS)
regression models were estimated to examine(1) whether intensified overtime reduction
exerts differential impacts on job demands,
increase in unfinished work, and decrease inworkplace communication for managerial andnon-managerial engineers, and (2) whether andhow the above work intervening variables inturn affect engineers’ engagement and mental
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Journal of Japanese Management Vol.1, No.1, November 2016

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Table 3. Mean Comparisons of Variables in Analysis: Managerial andNon-Managerial Engineers
Managerial(N=2,226)

NonManagerial(N=2,148)

Mean

S.D.

Mean

S.D.

Mean
Difference

Intensified Overtime Reduction

.415

.493

.389

.488

†

Work Engagement

2.472

.616

2.263

.657

***

Depression

2.064

.346

2.047

.358

Job Demands

2.631

.638

2.569

.666

***

Increase in Unfinished Work
Decrease in Workplace Communication

2.460

.853

2.360

.903

***

2.360

.770

2.320

.827

Sex (1=female)

.068

.252

.255

.436

Education

3.870

.976

3.880

1.013

Marital Status (1=married)

.779

.415

.525

.499

***

Children (1=present)

.675

.469

.397

.489

***

Annual Income

9.220

4.529

5.050

3.522

***

Tenure16.870

9.390

9.800

8.556

***

Recruitment Status (1=regular)

.560

.497

.500

.500

***

Employment Status (1=regular)

.530

.499

.620

.485

***

Monthly Hrs. of Overtime Work78.47073.35267.66072.376***

N of projects R participates

2.920

3.588

2.130

3.273

***

Firm Size

3.620

1.499

3.560

1.469

Job Type: Research (reference)

.101

.304

.119

.324

Job Type: Development

.320

.467

.305

.460

Job Type: Systems Engineering

.342

.474

.364

.481

Industry: Manufacturing

.417

.493

.401

.490

Industry: IT (reference)

.334

.472

.380

.486

***

Industry: Other

.235

.424

.213

.409

†

Focal Variables

Control Variables***†

Note: *** p <.001, ** p <.01, * p <.05, † p <.10

health.

scores between managerial and non-managerial
engineers for all variables in analysis. First, wefind that engineers in managerial positions
were more likely than their non-managerial
counterparts to experience intensification in
overtime reduction. While at a marginal level(5) Results
1. Descriptive Results
Table 3 reports the results of t-tests
conducted to examine the difference in mean
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Journal of Japanese Management Vol.1, No.1, November 2016

(p<.10), the mean of overtime reduction was
higher for managers (.415) than for nonmanagers (.389).
Mean comparison revealed that managers
were more likely than non-mangers to engage inwork. Mean scores of work engagement were
2.472 for managers and 2.263 for non-managers.
Managers exhibited a significantly higher meanscore in job demands (2.631) than nonmanagers (2.569). Also, managers perceived asignificantly higher level of increase in
unfinished work (2.460) than non-managers(2.360). However, we found no significant meandifferences in depression and decrease inworkplace communication between engineers inmanagerial and non-managerial positions.
Mean scores for indicators of demographic
characteristics also showed differences between
managerial and non-managerial engineers. For
instance, significantly more non-managers were
women (25.5%) than managers (6.8%).
Managers’ tenure in the current employer was
significantly longer (16.87 years) than nonmanagers (9.80 years). While we observed nosignificant mean difference in educational
attainment, managers earned a higher level ofannual income (9.220) than non-managers(5.050). Managers worked significantly longer
monthly hours of overtime (78.470 hours)
compared with non-managers (67.660 hours),
and managers were also involved in more
projects (2.920) than non-managers (2.130).
Thus, managers were working more intensively
than non-managers in our sample. We found nostatistically significant mean differences in firm
size and type of industry. As to job type, nonmanagers were slightly more likely (11.9%)
than managers (10.1%) to work in research,while approximately equal proportion ofmanagers and non-managers were working indevelopment/planning and systems engineering.
In terms of family status, managers were much

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more likely (77.9%) than non-managers to havespouse (52.5%). Managers were significantly
more likely (67.5%) than non-managers (39.7%)
to have children in the household.
2. Multivariate Results
Table 4 reports the result of OLS regression
predicting job demands, increase in unfinished
work,
and
decreaseinworkplacecommunication. First, the regression result forjob demands indicate that intensified overtime
reduction is likely to increase engineers’ jobdemands, and managerial engineers weresignificantly more likely than non-managerial
engineers to feel burdened with their high job
demands. Yet, we found no significant
interaction effect of over time reduction andmanagerial status. Several demographic
characteristics were significantly associatedwith job demands. For instance, women wereless likely to experience high job demands
compared with men. Higher income level andlonger tenure were negatively associated with
job demands, while longer hours of overtime
and more projects currently involved werepositively related to job demands. Those who
were in manufacturing industry were more
likely to experience a higher level of job
demands than those in other industries.
Engineers in development and systems
engineering were more likely to be burdenedwith demands, compared to those who were in
research.
Second, we find that intensification of
overtime reduction tends to increase engineers’
unfinished work, and that those in managerial
positions were significantly more likely thantheir counterparts in non-managerial positions
to experience an increase in unfinished work,when controlling for demographic conditions.
Yet here again, we found no significant
interaction effect of over time reduction and36

Journal of Japanese Management Vol.1, No.1, November 2016

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Table 4. OLS Regression Coefficients for Models of Job Demands, Increase in Unfinished Work,and Decrease in Workplace Communication
Job
Demands

Increase in
Unfinished
Work

beta

Sig

beta

Sig

beta

Sig

Overtime Reduction

.206

***

.101

***

.098

***

Manager《Interaction Term》
Overtime Reduction * Manager

.057

***

.072

***

.016

Sex (1=female)-.059

Education

.023

.020

.021

Marital Status (1=married)

.013

.021

.011

Children (1=present)

-.018

-.042

Annual Income

-.063

**

-.016

Tenure

-.045

*

-.095

Recruitment Status (1=regular)

.034

*

Employment Status (1=regular)-.020

Monthly Hrs. of Overtime Work.033

N of Projects R Participates.085

Firm Size-.021

Development.144

Systems Engineering.117

Other Job Types.034

Manufacturing

.036

R2

.073

.010

.016
***

-.037

Decrease in
Workplace
Communication

-.003
*

*

-.049

**

.010
-.048

*

***

.033

+

.068

***

-.038

*

-.033

*

.032

*

*

.049

***

.031

*

***

.067

***

-.007

.004

.005

***

.030

.013

***

.011

-.008

-.033

.006

.022

.017

.035

.015

*

Note: + p<.10, * p<.05, **p<.01, ***p<.001
Coefficients indicated in table are standardized beta coefficients.
Reference category for job type is basic & applied research.

managerial status. Several demographic
characteristics were significantly associatedwith increase in unfinished work. For instance,
women were less likely than men to experience
increase in unfinished work. Longer tenure wasnegatively associated with the increased
unfinished work, while working longer hours ofovertime and being involved in more projects
were positively related to the increase.

Third, while overtime reduction does
decrease workplace communication, we
found no significant effect of being inmanagerial position on the decreased
communication at work. Here again, sex
exhibited a significant negative effect,indicating that women were less likely thanmen to feel the decrease in workplacecommunication. Those who earn higher annual37

Journal of Japanese Management Vol.1, No.1, November 2016

ISSN 2189-9592

Table 5. OLS Regression Coefficients for Model of Work Engagement

Work Engagement
Model 1Model 2

beta

Sig

beta

Overtime Reduction

-.057

***

-.022

Manager《Interaction Term》
Overtime Reduction * Manager

.091

***

.093

Sig
***

-.017

-.016

Sex (1=female).058

Education

.006

.010

Marital Status (1=married)

.029

.029

Children (1=present)

.029

.033

Annual Income.113

Tenure.021.030

Recruitment Status (1=regular)

-.022

-.029

+

Employment Status (1=regular)

-.055

***

-.050

***

Monthly Hours of Overtime Work

.029

+

.031

*

Number of Projects R Participates

.065

***

.070

***

Firm Size

-.047

**

-.051

**

Development

-.096

***

-.071

**

Systems Engineering

-.158

***

-.138

***

Other Job Types

-.079

***

-.067

**

Manufacturing

.023

.029

+

Job Demands

-.197

***

Increased in Unfinished Work

.155

***

Decrease in Workplace Communication

-.109

***

R2

.069

***

***

.047

.098

**

***

.114

Note: + p<.10, * p<.05, **p<.01, ***p<.001
Coefficients indicated in table are standardized beta coefficients.
Reference category for job type is basic & applied research.

income are less likely to feel the decrease incommunication. Longer tenure was positively
associated with the decreased communication,
while longer overtime was negatively related tothe decrease.
Tables 5 and 6 show the results of OLS
regression predicting work engagement anddepression. First, we examined whether

intensification in overtime reduction exerted a
direct impact on each dependent variable(Model 1). Then we entered additionally job
demands, increase in unfinished work, anddecrease in order to examine whether and how
these intervening variables affect engagementand depression, and whether intensification of
overtime reduction affect engagement and de38

Journal of Japanese Management Vol.1, No.1, November 2016

ISSN 2189-9592

Table 6. OLS Regression Coefficients for Model of Depression
Depression
Model 1beta

Model 2
Sig

beta

Sig
*

Overtime Reduction

-.012

-.033

Manager《Interaction Term》
Overtime Reduction * Manager

.025

.016

-.007

-.009

Sex (1=female)

.098

***

.105

***

Education

.034

+

.031

+

Marital Status (1=married)

.016

.013

Children (1=present)

-.017

-.013

Annual Income.042

Tenure

-.015

-.006

Recruitment Status (1=regular)

.013

.007

Employment Status (1=regular)

.004

.006

Monthly Hours of Overtime work

.027

+

.020

Number of Projects R Participates

.074

***

.065

Firm Size

-.018

-.017

Development

.012

.002

Systems Engineering

-.043

-.050

Other Job Types

.015

.016

Manufacturing

-.022

-.026

*

.048

*

***

+

Job Demands

.048

**

Increased in Unfinished Work

.082

***

Decrease in Workplace Communication

.027

+

R2

.017

.032

Note: + p<.10, * p<.05, **p<.01, ***p<.001
Coefficients indicated in table are standardized beta coefficients.
Reference category for job type is basic & applied research.

pression only through these intervening
variables.
As reported in Table 5, the result in Model
1 for work engagement shows that intensified
overtime reduction exerted a significant
negative impact on work engagement. However,when we added job demands, increase in

unfinished work, and decrease in workplacecommunication in Model 2, the negative effect ofovertime reduction was reduced to nonsignificance. These results suggest that
intensification in overtime reduction affects
work engagement only via these intervening
variables.
39

Journal of Japanese Management Vol.1, No.1, November 2016

All three intervening variables entered
Model 2 exhibited statistically significant effects
on work engagement. Job demands anddecreased workplace communication werelikely to reduce work engagement, whereas
increased unfinished work was likely toenhance engagement for engineers.
The regression results in Models 1 and 2
also show that managerial engineers weresignificantly more likely than non-managerial
engineers to be engaged in work, controlling forvarious demographic characteristics. Hereagain, we found no significant interaction effectof over time reduction and managerial status.
Several demographic characteristics weresignificantly related to work engagement(Model 2). For instance, women were more
likely to be engaged in work compared with men.
Higher income level and more projects currently
involved were positively associated withengagement, while working in larger firms was
negatively related to engagement. Those who
worked in manufacturing industry were more
likely to engage in work than those in otherindustries. Work engagement for engineers inresearch and development tends to be higher
than those who were in other types ofengineering jobs. Turning to the results fordepression (Table 6), intensified overtime
reduction exerted no significant effect on
depression. In Model 2, however, the negative
effect of overtime reduction turned statisticallysignificant after controlling for job demands,
increase in unfinished work, and decrease inworkplace communication. These results
suggest that intensification in overtime
reduction has a direct impact on depression, in
addition to the indirect effects via job demands,
increase in unfinished work, and decreased
workplace communication.
The results in Model 2 revealed that higher
job demands and increase in unfinished work

ISSN 2189-9592

are likely to deteriorate engineers’ mental
health. Decreased workplace communication
also exerted a positive influence on depression,
yet the effect was only marginally significant(p<.10).
The regression results for depression(Model 2) also revealed that women were more
likely than men to be depressed, and those who
earned higher income and had more project
assignments were more likely to feel depressed.
We found no significant effect of managerial
status on depression in Models 1 and 2.
(6) Discussion and Conclusion
Present results show that recent
intensification in overtime reduction in
Japanese firms has negatively affected
Japanese R&D engineers’ work. We found that
overtime reduction increased their job demands
and unfinished work, while it decreased thelevel of their workplace communication. We also
found that Job demands and decreased
workplace communication were likely to reduce
work engagement, whereas an increase in
unfinished work was likely to enhance
engagement for Japanese engineers. We
predicted that overtime reduction would exhibit
stronger impacts on engineers in managerial
status, and that it would exert a stronger
influence on work engagement and mental
health for managerial engineers. While
managers were marginally more likely thantheir non- managerial counterparts to perceive
the intensification of overtime reduction, we
observed no differences in the effect of overtime
reduction on work engagement and depression
for engineers in managerial and nonmanagerial positions. Thus, intensified
reduction of overtime work has negative
influence on Japanese engineers irrespective of
their managerial status.
We also found that intensification in40

Journal of Japanese Management Vol.1, No.1, November 2016

overtime reduction only indirectly affects
engineers’ work engagement via job demands,
increase in unfinished work, and decreased
workplace communication, whereas it has both
direct and indirect impacts on depression.
Findings in the present study raisedquestions about the commonly held perceptionof long hours of work for Japanese employees.
Overtime reduction for Japanese engineers may
have both positive and negative sides, and whileon one hand it enhances the time availability for
their life outside paid employment, on the other
hand it reduces the adequacy in time spent forwork. As Yoshimura (2007) claims, scientists ingeneral are highly involved in their jobs,
meaning that work tends to be their central life
interest, and it is an important source of theiridentity. While we found a positive association
between an increase in unfinished work andwork engagement, it may be that engineers
become all the more absorbed in work when
they feel their work-centered identity isthreatened by not being able to accomplish theirwork.
In order to strike an adequate balance
between work and life, it is not sufficient to justreduce time at work, but it is also necessary toevaluate the adequacy in work time
simultaneously. Although employers may
generally believe that reducing employees’
overtime work is an effective means to reducelabor costs, it is important that they realize
immoderate work time regulation may bringabout unintended negative consequences inengineers’ work. In order to improve the wellbeing and creativity for R&D engineers believed
to be motivated by intrinsic aspects of work (fun,challenges etc.), it is necessary to carefully

ISSN 2189-9592

examine the role of “time management.” Ourfinding that work engagement for engineers indevelopment and systems engineering is lower
than those in basic research has an implicationthat we must pay attention to how engineers in
different job types work. We will need tocompare how time at work is differentiallyexperienced by those who work under tightschedule control and those who do not, in orderto evaluate the role of “time management” forengineers in different job types.
Finally, the limitations of the present study
need be mentioned. First, the data used in thisstudy did not allow us to look more carefully at
how overtime reduction affected other aspects ofengineers’ work, such as voluntary unpaid
overtime. While some may argue that reduced
paid overtime is compensated by increase inunpaid overtime, our data did not include
information to examine whether this was true,
and to our best knowledge there is no publicdata available to see whether unpaid “service”
overtime increased between 2007 and 2012.
Perhaps our conceptual model requires awider scope to capture the processes throughwhich overtime reduction affects engineers’
work. In addition, although we looked at the
impact of managerial status in our analysis andhow the effect of overtime reduction isconditioned by incumbency in a managerial
position, we did not carefully compare the waysthat managerial and non-managerial engineers
worked. Future research should also look atwhether and how intensified overtime reduction
has exerted differential impacts on the workand non-work lives for managerial and nonmanagerial engineers.

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Journal of Organizational Behavior, 25,(Received: May 30, 2016)(Accepted: September 6, 2016)43

Journal of Japanese Management Vol.1, No.1, November 2016

ISSN 2189-9592

Family Firms’ Transformation to Non-family Firms
During 1920’s-2015
Toshio Goto

Japan University of Economics, Japan
The Academic Association for Organizational ScienceE-mail: tsgototsgoto@gmail.com
Abstract
This paper sheds light on the transformation of the listed family business during almost a
century (1920’s - 2015) in Japan, to analyze the erosion of family influence upon the firm fromthe resource-based view perspective. Family business, broadly defined as any firm under family
influence, are known for their major role in the national economy and superior performance bothin developed and developing countries. Despite the importance of the continuation of the family
firms for generations, little research has been done to analyze its transformation to non-family
status.
This paper examines the family firm transformation process as the family capital committed
to the firm decreases, to identify the sequence and causes of the transformation. Major findingsof the research include:(1) Family capital is essential to maintain the family business status.
(2) Erosion of the family financial capital is the most important force that causes thetransformation.
(3) Major causes of the transformation include the decision-making at the businessexpansion phase, separation of ownership and management, disposal of the shares andresignation from the board of directors.
(4) The transformation process to the non-family status, once occurred, is seldom reversible.
With the above findings, this paper contributes to the existing literature to enrichunderstanding of the transformation and importance of family capital to maintain the family
influence on the firm. This paper presents academic, practical and administrative implications
before arriving at the conclusion.
Keywords: family business, ownership, succession, board of directors(1) Introduction
This

paper

to analyze the erosion of family influence upon
sheds

light

on

the

firms from the resource-based view (RBV)transformation of the listed family businessperspective. As a theoretical lens to view theduring almost a century (1920’s - 2015) in Japan,

resources of the firm as the source of its
44

Journal of Japanese Management Vol.1, No.1, November 2016

competitiveness(Barney,1991),

RBV

iseconomyISSN 2189-9592

over

the

world,

its

superior

employed to analyze the erosion of the various

performance and its unique characteristics.

resources of the family business and its impact

Both contradict the famous declaration of aupon the family influence. The research

separation of ownership and control (Berle &questions

Means, 1932) and Chandler (1977), which

are;

in

what

sequencethetransformation takes place, and what major

assesses the family business as outdated.

factors cause the transformation.

It is conservatively estimated that family

Family business research is one of thebusinesses comprise between 65% and 80% of

emerging fields, reflecting the major role of the

all existing firms worldwide (Gersick et al.,family business in the national economy both in1997). Among the big firms, family businesses

developed and developing countries, its uniquealso take a significant share. In the United

characters, and its superior performance

States, for example, 35% of the S&P firms

compared to the non-family business. Since the(excluding financial institutions) are family

inception of the research in our field, succession

businesses. It is also well known that family

has remained as the main subject, reflecting thebusinesses outperform other types of firms

short life span of the family business and the(Anderson & Reeb, 2003).

strong desire of business families for longevity

Literature addresses the unique character

for future generations. Despite the importanceof the family business from various viewpoints.

of the continuation of the family firms for

A family business is typically presented as a

generations, little research has been done tothree circle model (Gersick et al., 1997), which isanalyze its transformation to non-family status.

composed of family, ownership and business

The paper aims to contribute to thesubsystems. The family’s involvement and its

literature with major findings about the erosion

influence on the ownership and business/of family capital, which eventually terminates

management

life as a family firm, and provides implications

distinctive from other types of organizations.

make

the

familybusinessin the academic, pragmatic, as well as the

F-PEC (Astrachan et al., 2002) is a concept,

administrative perspectives. The rest of thecomposed of power, experience and culture,

paper is composed of the literature review,proposed to assess the family influence on amethod and the major results, discussions, andcontinuous

implications before arriving at the conclusion.

dichotomizing family and non-family firms.

scale

ratherthanartificially

Familiness (Habbershon & Williams, 1999) is(2) Literature review

another concept to model a family business fromFamily business, broadly defined as any

the RBV perspective. Familiness represents a

firm under a family’s influence (Newbauer &useful all-encompassing term for the sources,

Lank, 1998), has quickly gained considerable

processes,

attention both in the developing and the

involvement

developed countries. The main reasons for thismanagement, and intergenerational intention.

attention include but are not limited to; the

F-PEC and familiness have been discussed but

major role family business plays in the national

not operationalized in a quantitative manner.
45

and
in

consequences
terms

of

of

familyownership,Journal of Japanese Management Vol.1, No.1, November 2016

Measuring the family’s influence on the

ISSN 2189-9592(3) The method and major results

ownership and management, Goto (2016)

This section explains the research method,

analyzes all firms listed on the stock markets indefinitions, information sources, and major

Japan, to identify the family firms and evaluate

results. In order to find the transformation of

the level of family influence. The ownershipthe family firms to the non- family status overinfluence is judged by the level of the stocks

nearly a century, we chose to focus on the listed

owned by the family, both as individuals andfirms, which were family firms in 1950 but lost

firms under the family’s influence, while theits family business status in or before 2015. The

management influence is judged by theyear 1950 is chosen as the first observation

magnitude of the family’s representation on the

period since the Stock exchanges reopened inboard of directors.

1949 after WW2 in Japan. After observing the

The research categorizes listed family firms

transformation since 1950, the observation

into three groups based upon the level of theperiod is expanded back to the 1920’s. Such afamily’s influence and proposes that the family’s

retrospective manner is chosen to make theinfluence tends to be eroded both in thecomparison

ownership and management, which eventuallyavailability before 1950 varies among the firms

brings family firms to the non-family status.

due to the different times of listing andThisfoundation.

processofthefamilybusinessmeaningful,becausedatatransformation to the non-family firm wasInformation sources include all securities

preliminarily examined in the automotive

reports published by the firms, the Joint-stockindustry (Goto, 2016).

company almanacs (Yamaichi Securities, Toyo

Following this approach, the present paper

Keizai Shinposha), company history books,

further expands it with the RBV approach, and‘who’s who’ directories, which are supplemented

adds the temporal dimension to examine theby the following databases: Business Archive

transformation process in a historical manner.

Center (http://j-dac.jp) & eol (http://www.dl.itc.

As Pramodita et al. (2014) emphasize, time is an

u-tokyo.ac. jp /gacos).

important factor in our research field, especially
when

we

researchtheownership

Family business is defined, as an extension

andof Newbauer & Lank (1998), as any firm withleadership transitions across generations.
The

present

paper

examines

multiple members from the same family serving
thesequentially or simultaneously either as thetransformation of the listed family firms to themajor shareholders and/or board members

non-family status between the 1920’s and 2015

(Goto, 2012: 3). Family shareholders are the ten

in Japan. During the post-WW2 period, Japanlargest shareholders, as listed in the securities

has experienced radical social changes andreports of the subject firms, whose name,rapid economic growth, while the pre-war

number of the stocks owned and ownership

period remained relatively stable. There is noshare are available in the securities reports. The

literature focusing on the longitudinal changes

members of the board of directors are alsoof family business during a century of such

available from the same information sources as

drastic changes, anywhere in the world.

the shareholders. Board members include all
46

Journal of Japanese Management Vol.1, No.1, November 2016

ISSN 2189-9592

directors and auditors, either full time or not.

shareholders but no representative in the board

Family members include relatives by bloodof directors. The difference between level 4 andwithin the sixth degree, the spouse, and3 is, same as the above, that the family together

relatives by affinity within the third degree, as

is the largest shareholder in level 4, while thedefined by Civil Code Article 725.

family together is between the 2nd and 10th

While family names give important clues toshareholders in level 3. Group C, composed ofidentify the family members, some people withlevel 2 and 1, includes family firms with at least

the same family name may not belong to theone board member but with no familysame family. Some family members, on theshareholders among the top ten. The difference

other hand, may have different family names

between level 2 and 1 is that the family has abecause of marriage. This needs to be examinedpresident or chairperson in level 2, while theby referring to directories and company history

family has a board member(s) other than abooks. Lastly, on the occasion of the merger &president or chairperson in level 1.

acquisition, we focus on the legal surviving

Out of 57 cases which experienced the totalcompany.

loss of family influence between 1950 and 2015,

The following are the major research

5 firms lost by 1970, an additional 16 firms by

results. Table 1 summarizes the transformation

1980, 7 firms by 1990, 15 firms by 2000, 13 firmsof the family business status between 1950 andby 2010, and 1 by 2015. 10 firms moved directly

2015, where firms are listed in the order of thefrom Group A to the non-family status (level 0),

timing of reaching non-family business status.

while 47 moved from Group C and no firms from

Table 2 shows the transformation of the familyGroup B moving to nonfamily status. There arebusiness between the 1920’s and 1950, where

3 events in 2 firms, which witnessed a loss offirms are listed in the descending order of thefamily influence and its recovery before finallyfamily business status in 1940.

arriving at the non-family status.

Following Goto (2016), family firms are
categorized into three major groups (Group A, B

(4) Discussion

and C), which are further subdivided into twoThis section discusses the research results

levels. Explanations are as follows: Group A,

starting with the general overview, followed bycomposed of level 6 and 5, includes family firms

the importance of the family influence andwith the family members positioned together

family capital, route to the non-family status,

among the major (ten largest) shareholders, andmajor factors that cause the transformation,with at least one family member in the board ofand the reversibility of the transformation

directors. The difference between level 6 and 5

process in this order.

is that the family together is the largest
shareholder in level 6, while the family together

1. General overview

is positioned between the 2nd and 10thFirst, let us review Table 1, whichshareholders in level 5. Group B, composed ofhighlights quick and gradual transformation inlevel 4 and 3, includes family firms with themost cases. There are 5 firms (8.8%), whichfamily positioned together among the major

became nonfamily by 1970 and another 40.3%
47

Journal of Japanese Management Vol.1, No.1, November 2016

ISSN 2189-9592

Table 1. Family status of the listed family business in the post-WW2 period (1950-2010)
Code

Name

Industry

1950

1960

1970

1980

1990

2000

2010

5233

Taiheiyo Cement Co.

Construction materials

1

1

0

0

0

0

0

CN

3106

KURABO Industries

Textile goods

0

1

0

0

0

0

0

CN

8013
4503

Naigai Corp
Astellas Pharma Inc.

Textile goods
Pharmaceutical

1
5

2
5

0
0

0
0

0
0

0
0

0
0

CN
AN

7752

RICOH Co.
Noritake Company

Electronics
Glass & Ceramics
Products
Textile goods
Chemicals
Chemicals

6

6

0

0

0

0

0

AN

6

1

1

0

0

0

0

CN

5
5
3

1
1
1

1
1
1

0
0
0

0
0
0

0
0
0

0
0
0

CN
CN
CN

5331
3501
4461
4613

Suminoe Textile Co.
DKS Co.
KANSAI PAINT CO.

7122

The Kinki Sharyo Co.

Transportation
machinery

1

1

1

0

0

0

0

CN

3110
4043
6508
6326

Nitto Boseki Co.
Tokuyama Corp.
Meidensha Corp.
Kubota Corp.

Textile goods
ChemicalsElectrical equipment
Machinery

2
6
6
6

2
5
5
2

1
1
1
2

0
0
0
0

0
0
0
0

0
0
0
0

0
0
0
0

CN
CN
CN
CN

5352

Kurosaki Harima Corp.

Glass & Ceramics
Products

5

2

2

0

0

0

0

CN

6742

Kyosan Electric Mfg. Co.
KONICA MINOLTA,
INC.
Hodogaya Chemical Co.
THE JAPAN WOOLTEXTILE CO.
TOTO LTD.

Electrical equipment

2

2

2

0

0

0

0

CN

Electrical equipment

6

5

5

0

0

0

0

AN

Chemicals

5

5

5

0

0

0

0

AN

Textile goods

4

5

5

0

0

0

0

AN

4

5

5

0

0

0

0

AN

6
5

6
2

5
0

0
1

0
0

0
0

0
0

AN
CN

4902
4112
3201

7913
3405

Tosho Printing Co.
KURARAY CO.

Glass & Ceramics
Products
Miscellaneous goods
Chemicals

5333

NGK INSULATORS,LTD.

Glass & Ceramics
Products

5

1

1

1

0

0

0

CN

6461
7701
4004

Nippon Piston Ring Co.
Shimadzu Corp.
Showa Denko K.K.

MachineryPrecision Instruments
Chemicals

5
1
0

1
1
5

1
1
2

1
1
1

0
0
0

0
0
0

0
0
0

CN
CN
CN

7971

TOLI Corp.

Chemicals

5

5

5

1

0

0

0

CN

7992
6473
7261
4452

THE SAILOR PEN CO.
JTEKT Corp.
MAZDA Motor Corp.
Kao Corp.

Miscellaneous goods
Machinery
Automotive
Chemicals

6
6
6
5

6
5
5
3

2
2
2
3

2
1
1
1

0
1
1
1

0
0
0
0

0
0
0
0

CN
CN
CN
CN

4508

Mitsubishi Tanabe
Pharma Corp.

Pharmaceutical

6

5

5

1

1

0

0

CN

3408

Sakai Ovex Co.

Textile goods

6

2

2

2

1

0

0

CN

6103

Okuma Corp.

Machinery

6

5

2

2

1

0

0

CN

5332

48

Journal of Japanese Management Vol.1, No.1, November 2016

ISSN 2189-9592

4516
6841
2533
7951

Nippon Shinyaku Co.
Yokogawa Electric Corp.
Oenon Holdings, Inc.
Yamaha Corp.

Pharmaceutical
Electrical equipment
Food processing
Miscellaneous goods

5
5
5
2

5
2
2
2

5
1
2
2

2
2
2
2

1
2
2
2

0
0
0
0

0
0
0
0

CN
CN
CN
CN

6367

DAIKIN INDUSTRIES,Ltd.

Machinery

6

5

5

2

2

0

0

CN

6506

YASKAWA Electric
Corp.

Electrical equipment

5

5

5

2

2

0

0

CN

Chemicals

6

6

5

2

2

0

0

CN

Chemicals

3

5

5

5

5

0

0

AN

Ground transportation

2

6

6

6

6

0

0

AN

Ground transportation

2

1

1

1

1

1

0

CN

Glass & Ceramics
Products

6

5

2

1

1

1

0

CN

Construction materials

5

5

5

2

1

1

0

CN

Precision Instruments

6

1

1

1

2

1

0

CN

Ground transportation

6

5

5

5

2

1

0

CN

Food processing
Machinery

6
5

5
5

6
0

5
0

2
1

1
2

0
0

CN
CN

Ground transportation

1

1

2

2

1

2

0

CN

Chemical

5

3

1

1

2

2

0

CN

Food processing

2

2

2

2

2

2

0

CN

Machinery
Machinery

2
6

2
5

2
5

2
5

2
2

2
2

0
0

CN
CN

Retail

6

5

5

5

5

5

0

AN

Industrial materials

6

3

1

2

2

2

1

CN

4912
4028
9017
9048
5334
7905
7723
9064
2802
6474
9044
4911
2002
6203
6332
8244
3526

Lion Corp.
Ishihara Sangyo Kaisha,
Ltd.
Niigata Kotsu Co.
Nagoya Railroad Co.
NGK SPARK PLUG Co.
DAIKEN Corp.
Aichi Tokei Denki Co.
YAMATO HOLDINGS
CO.
Ajinomoto Co.
Nachi-Fujikoshi Corp.
Nankai Electric Railway
Co.
Shiseido Co.
Nisshin Seifun GroupInc.
Howa Machinery, Ltd.
Tsukishima Kikai Co.
KINTETSU
Department Store Co.
Ashimori Industry Co.

Note 1: Each column shows the level of the family influence as defined in the text.
Note 2: Company names are shown in the current manner.
Note 3: Dark columns show the total loss of the family’s influence (level 0).
Note 4: Black columns in 1950 indicate the extraordinary erosion of the family influence.
Note 5: In the extreme right column, “CN” shows the erosion of the family influence from Group C to non-family,
while “AN” shows the direct loss of the family influence from Group A.
Source: Compiled by author.

became nonfamily by 1990. The number of firms
in Group C show a sharp decrease from 29 (in1960), to 18 (1970), 6(1980), 3 (1990) and1(2000). The majority of the firms (47 firms or

82.5%) experienced gradual erosion, i.e. movingfrom Group C (the weakest family status) to nonfamily status. In contrast, 17.5% of the firms
made a direct move from Group A (the strongest
49

Journal of Japanese Management Vol.1, No.1, November 2016

ISSN 2189-9592

Table 2 Family status of the listed family business in the pre-WW2 period (1920’s-1950)
Code
7971

Name

Founded
1919

S
3

M
1

1920's
6

1930
6

1940
6

1950
5

TOLI Corp.

3106

KURABO Industries

1888

1

2

6

6

6

0

3501
4613
3110

Suminoe Textile Co.
KANSAI PAINT CO.
Nitto Boseki Co.

1883
1917
1923

7
5
6

2
3
3

6
6
6

6
6
6

6
6
6

5
3
2

6326
3201
5332
5333

Kubota Corp.
THE JAPAN WOOL TEXTILE CO.
TOTO LTD.
NGK INSULATORS, LTD.

1890
1896
1917
1919

11
4
5
6

4
2
3
2

6
6
6
6

6
6
6
6

6
6
6
6

6
4
4
5

6841

Yokogawa Electric Corp.

1915

10

3

6

6

6

5

2802
4043

Ajinomoto Co.
Tokuyama Corp.

1907
1918

9
3

5
2

6

6
6

6
6

6

3405

KURARAY CO.

1926

2

1

6

6

5

7701
7992

Shimadzu Corp.
THE SAILOR PEN CO.

1875
1911

6
11

3
2

6
6

6
6

1
6

6103
2533

Okuma Corp.
Oenon Holdings, Inc.

1898
1900

4
5

2
1

6
6

6
6

6
5

4911
4461
7752
6508

Shiseido Co.
DKS Co.
RICOH Co.
Meidensha Corp.

1872
1909
1936
1897

4
5
2

3
1
1
1

6
5

6
6
6
6

5
5
6
6

5352
4112
6473
4452

Kurosaki Harima Corp.
Hodogaya Chemical Co.
JTEKT Corp.
Kao Corp.

1918
1915
1921
1887

4
2
1
1

2
2
2
2

6
6
6
6

5
5
6
5

3408
6367
6506
4028

Sakai Ovex Co.
DAIKIN INDUSTRIES, Ltd.
YASKAWA Electric Corp.
Ishihara Sangyo Kaisha, Ltd.

1891
1924
1915
1920

3
2
1
1

3
2
5
3

6
6
6
6

6
6
5
3

5334
8013
7723

NGK SPARK PLUG Co.
Naigai Corp
Aichi Tokei Denki Co.

1936
1920
1904

4

1

1

1

5
5

5
6

6
5
5

6
1
6

2002

Nisshin Seifun Group Inc.

1900

4

2

5

6

5

2

7261
9048
6474
6332

MAZDA Motor Corp.
Nagoya Railroad Co.
Nachi-Fujikoshi Corp.
Tsukishima Kikai Co.

1921
1894
1928
1905

3
1
1
1

1
1
1
1

6
6
6
6

5
5
5
5

6
2
5
6

5331
5233

Noritake Company
Taiheiyo Cement Co.

1904
1881

5
1

1
2

5
5

5
5

6
1

7951

Yamaha Corp.

1927

1

1

5

5

2

6461

Nippon Piston Ring Co.

1931

5

5

4004

Showa Denko K.K.

1926

5

0

50

5

2

5

6
5

Journal of Japanese Management Vol.1, No.1, November 2016

ISSN 2189-9592

9017
3526
6203
8244

Niigata Kotsu Co.
Ashimori Industry Co.
Howa Machinery, Ltd.
KINTETSU Department Store Co.

1913
1878
1932
1920

3
4
3
3

2
1
1
1

4516

Nippon Shinyaku Co.

1911

3

2

4503
7122
6742

Astellas Pharma Inc.
The Kinki Sharyo Co.
Kyosan Electric Mfg. Co.

1923
1920
1917

4902
7913
4508
4912

KONICA MINOLTA, INC.
Tosho Printing Co.
Mitsubishi Tanabe Pharma Corp.
Lion Corp.

1873
1911
1678
1891

6

7905

DAIKEN Corp.

1945

9064
9044

YAMATO HOLDINGS CO.
Nankai Electric Railway Co.

1919
1884

5
5
5
5
6

4
6

2
6
2
6
5
5
1
2

3

6
6
6
6

1

1

5

4

2
1

6
1

Note 1 & 2: Ditto
Note3: Dark columns show the strong family influence (Group A).
Note4: Black columns in 1950 indicate the extraordinary erosion of the family influence.
Note5: Column “S” and “M” show the largest number of the family shareholders and family board
members respectively.
Note6: Column with a slash indicates the firm didn’t exist then. Vacant column indicates data
isn’t available.
Source: Compiled by author.

family status) to non-family status.

need to look at 1950, which witnessed

The general overview of Table 2 shows, inextraordinary transformations. Immediately

contrast to Table 1, the minor transformation,

after WW2, Japan was occupied by the General

keeping the highest level of family influence

Headquarters (GHQ), which dissolved theboth in the ownership and the management. All

Zaibatsu. The dissolution first targeted 5 major

firms were in Group A, and after experiencing

Zaibatsu, and later the minor and local ones.

an erosion from level 6 to level 5 in general, 30

Their controlling families' assets were seizedfirms (65.2%) still maintained level 6 status inand holding companies were eliminated. There1940.

are 8 Zaibatsu targeted in our sample firms,

This is natural at the infant stage of family

whose family influence in 1950 was eroded tobusiness development (Carlock & Ward, 2001).

the following levels:

Most of the firms started as a small family firm,

Non-family: KURABO[3106] 1 , Showa Denko

which grew and eventually went public, as[4004]

described in the company history books (ex.

Level 2: Nitto Boseki [3110]

Ajinomoto, 1972:29-30, Nachi-Fujikoshi Corp.,

Level 4: JAPAN WOOL TEXTILE [3201]

1978).

Level 3: Ishihara Sangyo Kaisha [4028]

Before discussing the specific subjects, we
1 [Level 5: Kurare [3405], DAIKEN [7905], DAI-

] designates the security code.

51

Journal of Japanese Management Vol.1, No.1, November 2016

ISSN 2189-9592

KIN INDUSTRIES [6367]

influence wasn’t recovered. Other factors that

There are several family firms, which took

erode family influence include huge property

voluntary actions to protect themselves fromtaxes and the decreasing of value of holding

dissolution, and as a result, significantly eroded

stocks (Mishima, 1983). Labor unions were

their family influence. For example, Ajinomoto

another factor to force management concession[2802] made a series of decisions to avoid thein Niigata Kotsu [9017].

dissolution, which included: name change of theSome families recovered family influencefirm, liquidation of Suzuki & Co. the holding

from the extraordinary damage, as presented incompany, and the retirement of Saburosuke

the securities reports of 1960. In such cases, theSuzuki III, the head of the family and Suzuki &paper conservatively normalizes the family

Co. The company history book states, “Change

status of 1950 to the level of 1960 (Table3).

in major shareholders: Suzuki Sanei Co. and theSuzuki family held 44.7% of the shares in June

2. Importance of family influence and the family

1946. Three years later, this number was down

capitalto roughly 7% by June 1949.

Family firms’ uniquenesses arise from theirfamily/firm integration, as presented by the

Table 3. Extraordinary status in 1950 &three-circle model (Gersick et al., 1997). The

normalized statustransformation of the family firm, as we’ve seen,

Name

Code

Original

Normalized

is nothing but the disintegration of such a

KURABO

3106

01

unique relationship between the family and its

Nitto Boseki

3110

2

2

firm, which results in the partial loss of theJAPAN WOOL

3201

4

5

family firms’ uniqueness and finally loses life asa family firm.

TEXTILE

From

theresource-basedview,

Kurare3405

55Showa Denko

4004

0

5

disintergration of such a unique family-firm

Ishihara

4028

3

5

relationship means the detachment of family
capital from the firm. Family capital, defined as

Sangyo Kaisha
TOTO

5332

4

5

totally owned family resources composed of

DAIKIN6367

5

5

human, social, and financial capital (Danes etal., 2009), is vital to the sustainable growth of

INDUSTRIESDAIKEN7905

5

5

Naigai8013

1

2

Niigata Kotsu

9017

2

6

the family business through the family’s
involvement in ownership and management.
Erosion of family influence in its ownership andmanagement means the decrease of the family’s

Note 1 & 2: Ditto

financial and human capital committed to theSource: Compiled by author.

Shimadzu[7701]

firm respectively.
retiredall

It is critical for the family to maintainfamilyfamily influence on the firm, not only from themembers from the board of directors. Thoughfamily viewpoint but also from the perspective

successfully avoiding the dissolution, its family
52

Journal of Japanese Management Vol.1, No.1, November 2016

ISSN 2189-9592

of the national economy. For the business family,

A→B→C→ non-family), and another model toespecially for the founder, the family business is

put Group C & B in-between (ie. A→C→B→

an intense source of energy and interest, which

non-family), and find which model explains therepresents an extension of himself (Levinson,

process better (with less number of deviations).

1971).

The result shows that the former model has

Considering such a special relationship, it

10 deviations in 9 firms, while the latter modelis in the nature of founders/entrepreneurs to

has 13 deviations in 9 firms. Therefore, wehave a difficulty “giving up what they haveconclude that the former model explains thecreated” (Shein, 1985: 275). Erosion of family

process better than the latter model. The model

capital committed to the firm means the partial

positions the erosion of the family’s shareholder

or total separation of the family from the firm as

position as the fundamental force to transforma shareholder or board member, severing a

the family business, which triggers the erosion

special relationship and accompanied emotionalof the family’s position in the board of directors

ties. Such a separation is the last thing for theand ultimately brings the firm to non-familybusiness family to accept.

status.

From the perspective of the national
economy,erosionofthefamilyAlthough the margin is slim, the result is

capitalsupported by the importance of the ownershipcommitted to the firm means the weakening ofin a joint-stock company, where the board of

the unique character of the family firms, which

directors

ultimately results in loss of the major role theshareholders’ meeting and work as agents offamily business plays in the national economy

shareholders. Therefore, family influence as theas addressed in the beginning of the paper.

shareholder(s) is most essential, and it must be

Therefore, the erosion of the family influence, or

maintained to keep the firm under the family’sfamily capital, should be avoided by all means,control.

isappointed

attheannualboth from the family and the national economy’s
perspectives.

Ownership influenceHigh

3. Routes to the non-family status

Group

Concluding the general overview with theBBabove, we now move to the three main subjects

AA

relevant to the transformation of the familybusiness. First is the route and sequence to non-Lowfamily status. Our question is to find the causal

NF

C

relationship between the erosion of the family’s

Low

influence in its ownership and management. In

Management influenceHighorder to answer the question, two models are

Figure 1. Transformation of the family firm

prepared to explain the process to become a non-Note1: Solid and dotted lines show the main routefamily business; one model to put the Group B

and its short-cuts respectively.

& C phase between A and nonfamily status (ie.

Note 2: NF designates non-family.
Source: Compiled by author.

53

Journal of Japanese Management Vol.1, No.1, November 2016

Beside the main route and the sequence as

ISSN 2189-9592

ten-fold to 19,350.2 billion yen during the 1980s

discussed above, two shortcuts need to be added.

(Suzuki, 2013: 41).

One is the direct route from Group A to C, andFurthermore, public stock offerings became

another is from Group A to non-family status.

the major method of the capital increase

Table 1 shows that ten firms, or 17.5%, followed(51.38% during 1970s and 79.42% during

this route, while most of our sample followed the1980s) in contrast to 3.75% in 1950s and 5.67%

major route.

in 1960s (Suzuki, 2013: 41). While the rights

Summarizing the above discussion, Figure

issue, which was the major method of the

1 illustrates the main route/sequence of thecapital increase until the 1960s, doesn’t affecttransformation of the family business, with two

the existing shareholders’ position, public stock

short-cuts.

offerings certainly result in the dilution of theexisting shareholders’ positions. The result

4. Major factors to cause transformationshows that most of the business families

4.1. Decision-making during the businesscouldn’t maintain the same family influence as

expansion period

the shareholders under such circumstances.

Significant erosion of family influence

Summing up, the findings show that the

between 1960 and 1990 coincides with the rapidbusiness family’s decision during the businessgrowthThe

expansion period benefited the firm, whichtransformation to the non-family status started

resulted in the sacrifice of family influence. In

in 1970s, and most significantly in the 1980sorder to maintain the family capital and family’sand 1990s. One of the most relevant factors to

influence on the firms, the family always needs

this end was the dilution of the family’s

to pursue the optimal balance between theshareholding position, which was caused by thebenefits of both the family and it’s firm whencapital increase during 1970s and 1980s,

making a business decision.

especially through the public stock offerings.

4.2.

Stock dilution resulted from the issue ofmanagement

additional common shares by the firms toAnotheroftheJapanese

economy.

finance the business expansion.

Separation

of

the

ownership

andfactorthat

accelerated

thedecrease of the family’s influence after WW2 is

While the firms benefited from thetheseparation

of

the

ownershipandadditional capital and improved profitability,

management, and the appointment of the non-the dilution lowered the family’s positions asfamily members to president. Such practices

shareholders, i.e. ownership percentage andwere considered to be modernization of thevoting control. For the family and its business,management, and started implementation

this meant the decrease of the family’s influence

before the war (ex. Ajinomoto, 1972:30, 113). It

as shareholders. The increase of capital after

became popular after the war, especially at theWW2 was significant in Japan. Compared totime of rapid business expansion, when thethe 1950s, when the total amount of the capitalfamily couldn’t afford to provide enough humanincrease was 1,270.9 billion yen, the amount of

resources both in quantity and quality.

the new capital issuance increased more than

Just like the above discussion, the business54

Journal of Japanese Management Vol.1, No.1, November 2016

ISSN 2189-9592

family needs to carefully consider what is goodcrisis (2 firms), and occasionally scandalous

for the family and the firm in the long run.

incidents (2 firms). Removal from the board of

Separation of ownership and management, anddirectors means not only the erosion of thethe introduction of professional executives may

family influence, but also the loss of revenue aswork well only under certain conditions (Goto,

the executive. Loss of such revenue makes it

2012: 81-83). It is necessary for the businessdifficult to buy newly issued stocks to maintainfamily to fully understand its advantages asfamily influence as a shareholder.

well as disadvantages before making the final

Some of the cases, such as scandalous

decision.

incidents, were expected and avoidable, for4.3. Disposal of shares

which the family executives are responsible.

The disposal of shares is another main

Family executives are also responsible for thefactor for the erosion of family influence inpoor performance and management crisis, atownership. There are various reasons for the

least to some extent. It is the business family’sshares disposal, including the inheritance tax

responsibility to take every possible measure to

payment, financial needs for personal purposes

avoid such incidences beforehand, in order toetc., which are not easy to observe from themaintain the commitment of the family capital.

outside. There were two cases, which weremade public. K. Ichimura, founder of RICOH

5. Reversibility of the transformation process[7752], decided not to pass the baton to a family

Once the family influence is damaged, is it

member and most of his assets (3 billion yen)possible to recover it? Our research shows thatwere donated to the newly established New

the family’s influence in the management can be

Technology Development Foundation. M. Ogura,recovered, while it is very difficult to recover theafter retiring from YAMATO HOLDINGS

influence in the ownership. Table 1 shows 10[9064], donated 4.6 billion yen to establish

incidences of the reverse moves: there are 7

Yamato Welfare Foundation (Mori, 2016). Today,

upward movements in the board member(s),neither of these foundations have family

composed of 2 moves from non-family to level 1,

influence, without having family members in

7 moves from level 1 to 2. In contrast, there is

the executive board.

only

Whatever the motivation and necessity is,one

upwardmove

regardingtheshareholder’s position (from level 5 to 6).

disposal of the company shares means less

It is possible to recover the position in thecommitment of the family capital as theboard of directors as long as the ownership isshareholder. The business family needs tomaintained at a certain level, such as among theconsider the outcome of disposal in the long run.

top ten shareholders (e.g. moves from level 4 to

4.4. Removal from the board of directors

5). We contend that it is quite difficult to move

There

are

at

least

6

firms

which

upward in the shareholder’s position unless theexperienced the family executive’s removal fromfamily continues its conscious effort to this end.

the board of directors, either as a president or

In conclusion, family capital and its

chairperson, reportedly taking responsibility forcommitment to the firm is fundamental to thethe poor performance (2 firms), management

status of the family firm, and the family needs
55

Journal of Japanese Management Vol.1, No.1, November 2016

to continue a conscious effort to maintain it, as

ISSN 2189-9592

business in the long run.

it is very difficult to recover once it is damaged

Theor lost.

third

academic

implication,

themodeling of the sustainable family business, isrelevant for family firms to achieve sustainable(5) Implications

growth for generations. The family businessThis section presents implications, whichtoday is facing various challenges due to ever-are academic, practical and administrativechanging

respectively. Academically, the research hassustainablefamilybusinessthree major implications. First, the paper

constructed

under

such

presents a new definition of family business toenvironmental

quantitatively measure the family involvement

evaluate each family firm for its sustainability,

on a continuous scale. Traditional definitions

succession capability and address its obstacles.

artificially dichotomize family vs. nonfamily

Practical implications are varied, out of

firms when no such clear-cut dichotomy exists

which the following two are briefly remarked(Astrachan et al, 2002: 46). To avoid the problem,

about. One is the importance of the family’s

F-PEC is proposed, which however isn’t

conscious effort to keep control of the business

operationalized.

within the family. The importance of the

This

paper

model,

The
once

ever-changing
is expectedtofamily’s control of its business is echoed bymeasurement of the family involvement, both inErnst Young (2015), summarizing the 2012theasurvey of 280 family businesses in 30 countries,

continuous rather than dichotomous scale,

which says that “two-thirds of all businesses

overcoming

thequestioned said that they planned to keep theconventional definitions and FPEC. It has acontrol of the business in the family.” Thispotential to tap different qualities of businesses,

strong desire should be pursued consciously andmaking it possible to differentiate levels ofcontinuously, otherwise business decisions willfamily involvement, and providing a framework

be easily made in favor of the firm’s interest.

integrating

the

and

management,

weaknessdifferentaconditions,conditions.

quantitativeownershippresents

environmental

of

on

both

theoreticalandAnother practical implication, important tomethodological approaches to the study ofthe business family, is the significance of all

family business.

possible measures to maintain the family’s

Secondly, as discussed in the last section,

influence in a long-term horizon. Education ofthis paper addresses the importance of thethe next generation is one of the most important

optimal solution of the conflict between thefactors to this end, which requires at least one

family and its business. In order to pursue theor two decades to successfully accomplish as

optimal balance between the benefits of both theplanned. Therefore, such a practice can’t befamily and it’s firm, this research emphasizes

overemphasized.

the importance of maintaining the family’s

Last but not the least important is theperspective when making a business decision. It

administrativeis therefore critical to research the optimal point,

policymakers,

to balance the benefit of both the family and its

importance of maintaining the family status,
56

implication.
this

paper

For

the

indicatestheJournal of Japanese Management Vol.1, No.1, November 2016

ISSN 2189-9592

nevertheless administrations in Japan andforce to cause the transformation, and identified

other nations seem to be geared toward non-decision- making during the business expansion

family succession. In Japan, succession is one ofperiod,the very imminent issues for family firms

management,(Small and Medium Enterprise Agency, 2006).

resignation from the board of directors as theLess and less numbers of members of the next

major causes for the transformation. Since thegeneration choose to succeed, and as a result,transformation process to the non-family statusfamily firms are obliged to cease operation. In

is difficult to reverse once occurred, it is criticalsuch a situation, the Small and Medium

for the business family to continue the consciousEnterprises Agency, moves to support various

effort to maintain family capital to influence its

alternate successions, including succession to

firm. This paper presented academic, practical

non-family

and policy-related implications.

members,

following

advanced

separationofdisposalownership

and

of

and

sharesnations which have already geared toward thisThe limitation of the research is the lack of

direction, typically the European Community

comparisons with those firms that have(Europeanmaintained the family firm status until today.

Commission,

2011:

78),

and

especially France (Murakami, 2008: 16).

Also, the comparison with family firms’

It may be argued that various alternate

transformations in other countries is expectedsuccessions serve to the benefit of the family andto give universal applicability to the findings of

its firms. Literature tells the opposite since

the paper.

extra-family succession yields better financial
performance than intra-family succession in the

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Wennberg, K., Wiklund, J., Hellerstedt, K., and(Received: May 31, 2016)(Accepted: September 12, 2016)59

Journal of Japanese Management Vol.1, No.1, November 2016

ISSN 2189-9592

SOCO’s Impact on Individual Sales Performance:
The Mediating Role of Cross-functional Integration
Eunji Seo

Fukuyama-heisei University, Japan
Japan Academy of Business Administration E-mail:eunji0109@heisei-u.ac.jp

Abstract
The effects of sales orientation (SO) and customer orientation (CO) on individual
performance and the mediating effects of cross-functional integration are examined in thisresearch. The assumption, two types of selling motivation (SOCO) differentially influence
individual performance, is modified by evaluating the mediating role of cross-functional
integration based upon the rationale is that SO emphasizes self-interest whereas CO involves
knowledge sharing and internal communication. Hypotheses are tested with structural equation
modeling using survey data from 236 salespeople in a Japanese industrial company and it isfound that SO directly influenced individual performance but cross-functional integration
completely mediated the relationship between CO and individual performance. Based on theseresults, the importance of SOCO both in order to increase upper performance is emphasized anda new perspective on the cross-functional integration of salespeople is provided.

Keywords
sales orientation, customer orientation, salespeople, Japanese industrial company, integration,individual performance(1) Introduction

importance of formulating diverse sales

In the context of increased domestic andinternational

marketcompetition,

strategy and managing the behavior ofthesalespeople has been the focus of considerable
60

Journal of Japanese Management Vol.1, No.1, November 2016academic attention and research interest(Franke

and

Park,

2006).

ISSN 2189-9592

In addition, the academic literature

Althoughexamining SOCO has revealed that thissatisfaction with and maintenance of long-

phenomenon

term relationships with customers are critical,

performance, but it has ignored the possibility

firms also pursuit short-term interests eventhat the observed effect is the result of

though in business-to-business transactions.

intervening

Therefore, salespeople should adapt diverse

personality-performance perspective, whichsales strategy with exclusive psychologicalprovide a framework for how personality

orientations.

affects

This study tests that how salesperson-

enhances

individual

variables.

behavior

psychologicalAccording

sales

to

a

at

work,

a

specificstateaffects

individuallevel sales orientation (SO) and customer

performance through proactive processes

orientation (CO) affect the performance of(Goad and Jaramillo, 2014). As a sales-related

those salespeople by evaluating mediating

concept,

effect of cross-functional integration behavior.

performance through the activation of a

SO is the degree to which salespeople

particularprioritize their own needs and/or the needs ofdevelopment, such as integration with otherthe firm over those of their customers byknowledgeable members. The integration of

attempting to sell as much as possible.

salespeople with a variety of functional

Conversely, CO means that the degree tomembers

which salespeople try to help customers makeinformation and activating organizationalpurchase decisions to satisfy the needs of thelearning, which may affect the effectivenesslatter and the extent to which they enjoy

and ability of a salesperson (Rouzes et al.,doing so (Saxe and Weitz, 1982; Brown et al.,2005). This behavior of salespeople may

1997). Most

researches on

behavior

salespeople

SOCO

may

stage

is

of

criticalindividualorganizational

forsellingreasonably

haveusually

individual performance. In particular, CO

discussed SO as being inversely related to CO

may prompt the delivery of high customer(e.g., Saxe and Weitz, 1982). However, SOCO

value by increasing internal dissemination ofis not exactly inversed concepts because theirmarket-related information and enhancing

effects

unseparated

coordination with other functional members.

empirical

By examining the effects of SOCO on

research has reported a positive or a non-individual performance and investigating theinfluential relationship between SO andmediating role of integration, it may be

performance (e.g., Boles et al., 2001; Wachnel

possible to identify the real effects of SOCOet al., 2009) and has argued for additional

which clarify their implications for sales

research to test this relationship further bymanagers.

to(Schwepker,

performance2003).

Relatedexpectedexchanging

the

of

be

affecttoinfluence

addressing whether both components of

The remainder of this paper is organized

SOCO have a positive impact on performanceas follows. First, I discuss the extant(Wachnel et al., 2009; Goad and Jaramillo,

literature on the sales behavior of salespeople2014).

and their integration with other functional
61

Journal of Japanese Management Vol.1, No.1, November 2016

ISSN 2189-9592

members. Then it is developed related

research is based on the view that SOCO arehypotheses. Next, I present the methods useddistinct rather than opposite constructs andin our empirical research and discuss thethat they should be assessed with separate

results. Then the theoretical and managerial

measures (Guenzi et al., 2011). Specifically,

implications of findings are presented. Finally,

the antecedents and benefits of CO, such as

it is discussed the limitations of this study

job satisfaction, commitment, organizational

and implications for future research.

citizenship, and the behavior of members,
have been outlined (Cross et al., 2007).

(2) Conceptual background

Despite

1. Sales motivation of salespeople

attempted tonumerous

studieshave

identify and explore the

Research regarding the sales motivation

relationship between performance and salesof salespeople has developed the SOCO

motivation, no consensus has developed in

criterion to estimate the degree to which tasks

this regard (Goad and Jaramillo., 2014).

are effectively accomplished by salespeople.

Indeed, few researchers have focused on SO

The degree of SOCO is important for

as a significant contributor to performanceorganizations because it influences the job-because they have assumed that SO is

related attitudes and goals of salespeople

negatively related to organizational outcomes(Schwepker, 2003; Jaramillo et al., 2007).

under the rationale that the use of a primarily

The

SOCO

scale

incorporates

twosales-oriented sales strategy involves lesssubscales: SO (sales-oriented selling) and CO

concern for customers’ interests (e.g., Guenzi(customer-oriented selling). The SOCO scale

et al., 2009). However, the impact of SO on

addresses the following characteristics of asalescustomer-oriented sales process: the desire to(Schwepker, 2003).

help customers make satisfactory purchaseIn

performance
addition,

remains

only

a

few

uncertain
potential

decisions, helping customers assess theirmoderating factors, such as differences inneeds, offering products that will satisfy

performance measurements (subjective ormanipulative tactics, and avoiding the use ofobjective) (Jaramillo et al., 2007) and the levelhigh-pressure selling (Saxe and Weitz, 1982).

of skill of salespeople (Wachner et al., 2009),

Based on these assumptions, one line ofhave been examined with regard to theresearch on SOCO has proceeded from therelationshipnotion that both types of sales effectivenessperformance. These studies have shown that

can

one

various external and individual factors can2007).

affect the relationship between SOCO andDrawing on the stance that SO should be

performance, but the impact of internal

limited to encourage CO, several studies havefactors, such as integration with otherexamined the more effective aspects of thefunctional members of the organization, has

SOCO approach and the antecedents of the

not been well studied.

beinvestigatedmeasurement(Pettijohn

using
et

only
al.,

between

SOCO

and

sales

CO approach in particular (Widmier, 2002).
On the other hand, another line of

2. Cross-functional integration of salespeople
62

Journal of Japanese Management Vol.1, No.1, November 2016

ISSN 2189-9592

In general, the sale of products and services

and sales (Le Meunier-FitzHugh et al., 2007).

is not the exclusive province of marketing or

Research in these areas has suggested

sales but also involves multiple functionalthat

integration

members (Le Meunier-FitzHugh and Piercy,

performance on both individual and group2007). Cross-functional integration, a structurelevels. For example, Kahn and Mentzer

that maximizes a firm’s effectiveness, has been

(1998)

addressed by three approaches within the

different functional members has a positive

relevant

showed

that

vital

to

integrationinfluencecomposite

perspectives

department success, overall firm performance,(Kahn and Mentzer, 1998). According to Kahn

and NPD because information exchange that

(1996), interaction includes physical activities,

is intrinsic to integration allows members tosuch as meetings, e-mails, telephone calls, andreducecross-functional training, whereas collaborationdifferent types of performance. Similarly, Le

involves intangible elements, such as mutual

Meunier-FitzHughunderstanding,empirically determined that collaboration

andcommonvision,anduncertainty,

in

among

interaction,

collaboration,

performanceoverallthe

literature:onisthereby
and

terms

of

facilitating

Piercy(2007)

between sales and marketing is positively

information sharing or building.

associated with business performance. At theSome empirical research has shown thatsuccessful

individual level, Chimhanzi and Morgan

performance that promotes market satisfaction(2005) found that informal interaction in theand identifies the behavior that is most

dyadic relationship between marketing andimportant for new product development (NPD)

human resources increases familiarity but(Kahn and Mentzer, 1998; Kahn, 2001).

reduces

However, since interaction and collaboration are

mutual understanding of others’ personality

closely parallel, the composite perspective has

traits and preferences. Moreover, Guenzi andbeen accepted, according to the goals ofTroilo (2006) showed that salespeople canintegration,

for discussing cross-functional

foster marketing capability (e.g., marketing

integration (Song & Montoya-Weiss, 2001;

sense, understanding market trends, andRouzieresearch,customer

relations)salesperson’s integration with other functional

relevanceofmembers is focused, using “integration” to refermarketing.

collaboration

et

is

al.,

a

feature2005).

In

of

this

competitiveness

by

their

by

promptingincreasing

interactions

the
with

to the extent of information exchange and(3) Model and hypotheses

personal interaction. Integration is an internal
option available to salespeople and that it

The conceptual model, which illustrates

creates value for customers. The important

the relationship between constructs, is shown

functions of integration are discussed inin Figure 1. Although extant researchterms of the cross-functional relationships

suggests that SO by itself negatively affects

related to marketing, such as those involving

customer loyalty and job satisfaction as it

R&D (Kahn and Mentzer, 1998), humanprioritizes short-term interests over customer

resources (Chimhanzi and Morgan, 2005),

satisfaction (Boles et al., 2001; Schwepker,
63

Journal of Japanese Management Vol.1, No.1, November 2016

H1. Sales orientation positively affects

2003), SO is often the most effective sales
strategyforimproving

ISSN 2189-9592

individual

individual sales performance.

performance. Wachnel et al. (2009) reported

CO is considered as a long-term sales

that SO directly increased individual sales

approach. Various studies have shown that

performance in B-to-B market settings andCO improves individual performance byfound that this tendency was stronger when

encouraging

salespeople were less skilled at selling.

increasing long-term customer satisfaction

Moreover, SO develops certain types ofand avoiding behaviors that may lead tocustomer relationships. Boles et al. (2001)

customer dissatisfaction (Franke and Park,

accurately observed that SO was not harmful

2006; Boles et al., 2001; Arndt and Karande,

for relationships with customers in in-store

2012). Franke and Park (2006) argued that aretail settings because customers expect

customer-oriented

salespeople to engage in selling-oriented

process of satisfying customers’ needs to be

behavior to some degree. Similarly, according

intrinsically pleasing. Cross et al. (2007) also

to Singh and Koshy (2011), SO is positively

showed a positive effect of CO on performance.

associated with the development of customer

Their rationale was that a salesperson isrelationships in the short- or medium-term.

often

On the other hand, Schwepker (2003) argued

organization to interact with the customer,that salespeople are more likely to utilize SO

and the individual salesperson’s focus on

in an effort to meet relevant demands andsatisfying customer needs is therefore agoals when management employs outcome-crucialbased

financialsalespeople who have a high-CO approach

performance) to evaluate their performance.

tend to build stronger customer relationships

Harries et al. (2005) found that performance(Bole et al., 2001). Such relationships lead toorientationSO,

more frequent repeat sales, more word-of-suggesting that highly performance-oriented

mouth referrals, and overall, a more desirable

salespeople are focused on short-term rather

image for the selling firm.

measurements

positively(e.g.,

influenced

behave in a way to maximize their extrinsic
This

may

imply

that

only

subject

tosalesperson

focus

finds

representativeofinquiry.

of

on

the

the

Moreover,H2. Customer orientation positively

than long-term success, and that they, in turn,rewards.

thesalespeople

affects individual sales performance.

when

Improved information flow and flexibility

salespeople adopt a stronger sales-orientedof responses by team members can allow

approach, they increase their attention to theresources to be quickly and easily disengaged

act of selling itself and place the highest

from unproductive uses and applied to newpriority on finding effective methods foropportunities (Ford and Randolph, 1992). By

increasing performance. These discussions

transmitting information and interacting

show that SO is influential in increasing sales

with members who work in complementary

performance. Building on the aforementionedfunctions, salespeople are more likely totheoretical and empirical foundations, firstincrease

hypothesis is as follows:

effectively control their schedules. Moreover,
64

their

productknowledge

andJournal of Japanese Management Vol.1, No.1, November 2016

ISSN 2189-9592

H1

SO

H4

P

CI
H3

H5

CO

H2
Figure 1. Conceptual model and hypothesized relationships
Note: SO=sales orientation, CO=customer orientation
CI=cross-functional integration, P= salespersons’ performancea network can supplement an individual’s

perspective that holds that “people choose

ability to respond well to new challenges

after assessing the probable gains and losses

when that individual knows from whom toin well-being from a set of alternative actions”

seek information or expertise (Cross and(Knoke, 1990, p. 31). When knowledge

Cumming, 2004). In this regard, salespeople

sharing with other functional members is not

who are more aware of other functionalpart of a formal job description, it is difficult

members’ expertise are likely to contact the

to

right

because they engage primarily in efforts topeople

at

the

right

time

when

information and technical support is required

positively

affects

cross-functional integration.

integrationindividual

salespeople

H4. Sales orientation negatively affects

the following hypothesis is developed:
Cross-functional

self-interested

achieve rewards.

for their tasks. Based on these considerations,H3.

motivate

Customers in B-to-B contexts require asales

full array of services, including help withperformance.

problem-solving processes and efforts toThis research proposes that SO is

increase the productivity of their sales force

negatively related to integration with other(Leigh and Marshall, 2001). Therefore, thefunctional members. Because SO emphasizes

role of salespeople is increasingly associatedthat a salesperson’s self-interest over that ofwith account management and solution

customers, it is stimulated by the generaldevelopment. For example, Storbacka et al.

output evaluation systems of organizations(2009, p. 982) argued that “for salespeople to(Sujan et al., 1994). Auh and Menguc (2013)

succeed in a servitised sales process theyreported that a reward practice that links pay

require knowledge held not just by marketing

increases to performance is negatively related

but also by operations and finance, resulting

toinknowledge-sharing

relationshipinvolves

behaviors.
aThis

self-interested
65

the

need

for

greater

communication.”

This

means

internal
that,

for

Journal of Japanese Management Vol.1, No.1, November 2016

salespeople

whoemphasize

ISSN 2189-9592

customerindividual performance was measured using

satisfaction, integration with other functional

two items developed by Churchill, Ford,

members is especially important to theirHartley, and Walker (1985) to emphasize theability to perform their fundamental role;view of performance in the sales role. All

thus, CO is likely to motivate salespeople toitems measured self-reported performanceinteract or collaborate with other functional

relative to other salespeople.

members.

H5. Customer orientation positively

2. Results

affects cross-functional integration.

2.1 Measurement model
The validity and dimensionality of our(4) Research methodology

reflective

constructs

areassessedby

1. Sample and measureperforming a confirmatory factor analysis

This study was conducted in a company(CFA). CFA model addressed SO (three items,

whose sales of individual services and

α= .706), CO (four items, α= .732), integration

products involved real state and auto and(four items, α= .835), and performance (twofinancial insurance. I chose this special

items,

company

areacceptable fit with the data, with a χ2 value ofmotivated to accept SOCO approaches, and135.609 (df = 59, p< .001), a comparative fit

they are generally integrated with otherindex (CFI) of .941, an adjusted goodness-of-fit

functional382

index (AGFI) of .872, and a root mean square

questionnaires were distributed, and 236

error of approximation (RMSEA) of .074. Thesesalespeople,

managers,

data imply that the fit of the model was good.

responded, reflecting a response rate of

Item loadings are presented in Table 1. One

61.78%.

SOCO,

item related to cross-functional integration had

integration, and individual performance werea low loading, <.5 is founded, it is accepted

adapted from previous research for this study.

because it is necessary to directly estimate how

Likert scales, ranging from one to indicate

salespeople perceive the possibility as to“not at all” to five to indicate “a lot,” were used.

integrate with other functional members.

Based on Wachner et al. (2009), SO was

Moreover, the overall composite reliability andmeasured with a three-item index, as shown

average variance extracted (AVE) were strong

in Table 1. It is modified these measures fromfor all latent variables, as shown in Table 2.

those used by Wachner et al. (2009) to reflect

Because the square root of the AVE for eachthe short-term transactional emphasis on

construct was greater than the correlation

superior financial performance of SO. It is

betweenmodified instruments drawn from those usedmeasurement model, all model constructs

by Thakor and Joshi (2005) to measure CO. In

exhibited discriminant validity with respect toaddition, integration with other functional

the standard.

becauseits

members.
including

Scalesforsalespeople

In
sales

total,

measuringmembers, which was referenced by Kahn andMentzer(1998),

isincluded.

α=.912).

any

The

pair

of

model

showedconstructs

in

an

the

In addition, a Harman’s one-factor tests

Finally,

performed on the four conceptually crucial
66

Journal of Japanese Management Vol.1, No.1, November 2016

ISSN 2189-9592

variables in our research model: SO, CO, cross-covariance explained by one factor was 28.62%.

functional

individualThis suggests that our data sample was mostperformance (Podsakoff, MacKenzie, Lee, &likely not contaminated by common method bias.

Pdsakoff, 2003). Results from this test showed

2.2. Structural model

integration,andTo test hypotheses related to the structu-

that four factors were present and that the most

Table 1. Variables and measures
Model
Scale items

Estimate*

SO1 when a company appraises salespeople, only financial performance has to be.474

Sales orientationconsidered.
SO2 I try to focus attention on the degree of sales performance compared with.828

others
SO3 high sales performance is more important than how to accomplish it.657

Customer orientation
CO1 It is important to fully understand the customer's needs.573

CO2 I try to determine how I can satisfy customers.794

CO3 I try to determine how I can best help the customer solve his/her problem.674

CO4 I spend much of my time listening to the customer talk about his/her firm's

.557

needs
Cross-functional integration
CL1 the integration between sales and other functions is possible.351

CL2 critical information is shared between colleagues with different functions

.901

CL3

.859

I am actively gathering information from colleagues with different

functions
CL4 I frequently exchanges information with other functional members.922

Individual Performance
P1 the degree to which the salesperson commits to the target sales figure.943

P2 the sales figures are achieved.889

Table 2. Descriptive statistics and correlations
Composite

AVE

1

2

3

4

reliability
1.Sales orientation

0.74

0.50

1

2.Customer orientation

0.86

0.61

-.009

1

3.Cross-functional integration

0.88

0.67

.034

.245**

1

4.Individual performance

0.92

0.84

.285**.074.322**

67

1

Journal of Japanese Management Vol.1, No.1, November 2016

ISSN 2189-9592

Table 3. Structural model estimates
Path Estimate(t-value)

Structural paths
Sales orientation→ Cross-functional integration

0.13(1.20)

Customer orientation→ Cross-functional integration

0.67(3.37)***

Cross-functional integration → Individual performance0.28(4.08)***

Sales orientation

0.63(5.11)***→ Individual performance

Customer orientation→ Individual performance0.05(0.30)*p < 0.05; **p < 0.01; and ***p < 0.001

ral model, AMOS is used to examine model;

the sales motivation of salespeople has

d.f. = 59,

underscored the positive effects of CO andp < 0.001; CFI = 0.941; TLI = 0.923; andneglected the impact of SO. It is also studied

RMSEA = 0.074) were good. In terms of thethe direct and mediating effects of integration

effects of direct paths, four of the six

with other functional members on individual

relationships directly supported three of ourperformance. These findings contribute tohypotheses as shown in Table 3. Specifically,

existing knowledge about sales organization.

H1, which addresses the direct effect of SO on

First, this research clarified how and why

individual performance, was supported. The

SOCO affects individual performance byparameter estimate for the path was 0.627 (tshowing that cross-functional integration= 5.112). H5, which also addresses the direct

mediates the effects of CO on individual

effect of CO on cross-functional integration,

performance. A significant result is that SO

was supported, and the parameter estimate

directly increases sales performance, but thatfor the path was 0.670 (t = 3.365). In addition,

CO indirectly increases it by prompting

H3, which deals with the direct effect of cross-interaction and activities with individuals

functionalwith different areas of exert knowledge.

the fits of the models (χ2 = 135.609,

integration

performance,

was

on

supported,individual
and

the

This finding underscores the differences

parameter estimate for the path was 0.284 (tbetween the two components of SOCO,=4.082). The other two structural parameters

although previous research has reported thatwere non-significant; therefore, H2 and H4

both positively influence performance (e.g.,

were not supported in our model.

Bole et al., 2001).
In terms of function, the relevant(5) Discussion

literature has shown that CO stimulate

1. Theoretical and managerial implications

innovativenessandinformation

sharing

This research investigated the impact of(Lukas and Ferrell, 2000). For example,

SOCO on the individual performance ofLukas and Ferrell (2000) empirically showedsalespeople because most extant research onthat CO increases the introduction of new-to68

Journal of Japanese Management Vol.1, No.1, November 2016

ISSN 2189-9592

the-world products and reduces the number

been conducted outside the United States andof me-too products launched. Moreover, Foss

it is possible that this behavior has different

et al. (2011) reported that interaction witheffects in other countries (Guenzi et al., 2011),

customers promotes the increased internal

this research on salespeople in an industrial

communicationdelegatingcompany of Japan contributes to expanding

responsibility in the organization. Our study

the existing knowledge on SOCO and its

advances knowledge in this regard byconsequences outside the United States.

suggesting

throughthatCO

increases

theFindingsof

thisresearchhave

performance of salespeople through their

managerial implications for sales managers

innovative behavior, such as interacting withand marketing executives. They should

other functional members and improving theencourage salespeople to adopt both selling

value of their products and services byapproaches and to adapt their management

adopting a variety of perspectives.

style in terms of salesforce selection, training,

From this perspective, it is possible that

motivation, reward, and control systems

these two psychological states will lead toaccordingly (Weitz and Bradford, 1999).

different customer service and products.

AlthoughServices and products provided from CO are

strategies from hard selling to smart selling

likely be more higher quality than thosehas been asserted (Guenzi, 2011), salespeople

provided from SO, as the former involves

are still expected to attain short-term sales

efforts to achieve superior customer value

results in a competitive market. Achievementthat derive from a combination of differentof superior short-term performance requires

perspectives and areas of expertise. Thisthat the work and training curriculum of

expectation should be discussed in further

salespeople be based on sales. This may beresearch. Second, our study expands on priormore critical for salespeople who naturally

researchcross-functional

prioritize the long-term prospective customer

integration by showing that personal COover short-term compensation. At the same

stimulates this phenomenon. Internal andtime, salespeople with a high SO should also

external

rewardbe encouraged to increase their integration

procedures, top management support, andwith other functional members, such as R&D,

environmentalbeenmarketing, and manufacturing personnel.

identified as antecedents to cross-functional

For example, the use of cross-functional

integration (e.g., Rouziès et al., 2005; Guenzi

teams with common financial goals may be

and Trolo, 2006). This research advances

effective in this regard (Rouziès et al., 2005).

knowledge in this domain by suggesting that

In summary, sales managers must coach and

CO is critical for upper-tier cross-functional

support salespeople in attempts to maintainintegration on the individual level and thathigh levels of both components of SOCO andthefacilitate

regardingfacilitators,

suchuncertainty

antecedents

of

as
have

cross-functionaltheimportanceopportunities

for

of

shiftingsalespeople,

integration should be further explored.

especially those with high SO, to interact

Finally, considering that few studies havewith colleagues with different knowledge
69

Journal of Japanese Management Vol.1, No.1, November 2016

bases.

ISSN 2189-9592

Sociological

European

Perspectives.

Journal of Marketing, 47, pp. 1333-1355.
2. Limitations and future research
Examinations

additional

Thomas. G., and Brooks, Charles (2001).

negative

An Examination of the Relationships

dimension of SO and increase motivation for

between Retail Work Environments,

short-term performance will be critical.

Salesperson

Selling

Although SO has a positive effect on

Customer

Orientationindividual performance as our findings

Performance.

conditions

that

of

the

Boles, James. S., Babin, Barry. J., Brashear,

reducethe

OrientationandJobconsiderable

Journal of Marketing
Theory and Practice, 9(3), pp. 1-13.

challenges, such as reducing customer loyalty,

Brown, Steven. P., Cron, William. L., andsuggest,italso

endangering

presentsthejobsatisfactionof

Slocum Jr, John, W. (1997). Effects ofsalespeople, and fostering low levels ofGoal-Directed Emotions on Salesperson

learning orientation (Boles et al., 2001;

Volitions, Behavior, and Performance: A

Schwepker, 2003; Harries et al., 2005); thus,

Longitudinal

this topic requires more discussion andMarketing, 61, pp. 39-50.

careful consideration. Moreover, we used

JournalStudy.

ofChimhanzi, Jacqueline, and Morgan, Robert.

individual performance as the consequence of

E.

SOCO,

Marketing/Human Resources Dyad forwhich

assessments

wasmeasured

completed

in

by

self-

terms

of

(2005).

Marketing

Explanations
Strategy

from

the

Implementationcomparison with colleagues. Future research

Effectiveness in Service Firms. Journal

should rely on objective data, which may beof Business Research, 58, pp. 787-796.

more effective for estimating individual

Churchill Jr, Gilbert. A., Ford, Neil. M.,

effectiveness because it is likely that workers

Hartley, Steven. W., and Walker Jr,

to do not have accurate information about

Orville. C. (1985). The Determinants of

their colleagues’ performance.

Salesperson

Performance:

A

Meta-

Analysis. Journal of marketing research,
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Management,(Received: May 31, 2016)(Accepted: September 16, 2016)73

Publisher: JFMRA
November 2016