History of Japanese Labor and Production Management
Authors: Tsutsui William M. 
Published: May 2019

Tracking with Japan’s macroeconomic fortunes since World War II, global interest in Japanese management practices emerged in the 1950s with the start of Japan’s “miracle economy,” soared in the 1980s as Japanese industrial exports threatened manufacturers around the world, and declined after 1990 as Japan’s growth stalled. Japanese techniques, especially in labor and production management, fascinated Western scholars and practitioners in their striking divergence from U.S. and European conventions and their apparent advantages in creating harmonious, highly productive workplaces. Two reductive approaches to the origins of Japan’s distinctive management methods―one asserting they were the organic outgrowth of Japan’s unique cultural heritage, the other stressing Japan’s proficiency at emulating and adapting American models—came to dominate the academic and popular literature. As historical analysis reveals, however, such stylized interpretations distort the complex evolution of Japanese industrial management over the past century and shed little light on the current debates over the potential convergence of Japanese practices and American management norms.

Key features of the Japanese model of labor management—“permanent” employment, seniority-based wages and promotions, and enterprise unions—developed between the late 1800s and the 1950s from the contentious interaction of workers, managers, and government bureaucrats. The distinctive “Japanese Employment System” that emerged reflected both employers’ priorities (for low labor turnover and the affirmation of managerial authority in the workplace) and labor’s demands (for employment security and respect as full members of the firm). Since 1990, despite the widespread perception that Japanese labor management is inefficient and inflexible by international standards, many time-honored practices have endured, as Japanese corporations have pursued adaptive, incremental change rather than precipitous convergence toward a more market-oriented American model.

The distinguishing elements of Japanese production management—the “lean production” system and just-in-time manufacturing pioneered in Toyota factories, innovative quality-control practices—also evolved slowly over the first century of Japanese industrialization. Imported management paradigms (especially Frederick Taylor’s scientific management) had a profound long-term impact on Japanese shop-floor methods, but Japanese managers were creative in adapting American practices to Japan’s realities and humanizing the rigid structures of Taylorism. Japanese production management techniques were widely diffused internationally from the 1980s, but innovation has slowed in Japanese manufacturing in recent decades and Japanese firms have struggled to keep pace with latest management advances from the United States and Europe.

In sum, the histories of Japanese labor and production management cannot be reduced to simple narratives of cultural determinism, slavish imitation, or inevitable convergence. Additional research on Japanese practices in a wide range of firms, industries, sectors, regions, and historical periods is warranted to further nuance our understanding of the complex evolution, diverse forms, and contingent future of Japanese management.