Case Study: Panasonic and Japan’s Changing Culture

Summary
This case study focuses on the globalization and change in culture of Panasonic established in Japan in 1920. Japanese culture hasn’t changed but the world around Japan has changed. Panasonic tried very hard to adhere to the values that were already in motion but as the times changed so did Panasonic. Although this was a drastic change it allowed Panasonic to grow. “As the decade progressed, one Japanese firm after another was forced to change its traditional ways of doing business” (Global Business Today, 2011, pp. 126). Globalization played a huge role in the outcome of the Japanese businesses.

Questions 1. The triggers of cultural change in Japan during the 1990s were that the generation born after 1964 wasn’t as motivated and grew up in a much richer and prosperous Japan. Another trigger was that the Japanese economy was sucked into a slump. Due to the fact that the companies in Japan were trying to keep their traditions and values, keep their employees happy and maintain good and efficient business caused the companies to suffer. Cultural change is starting to affect traditional values in Japan because it is causing companies to change their values. Companies are no longer following the set of values and folkways from previous years. They are beginning to follow the same rules and regulations of the society. Panasonic was also letting go of employees and modifying the social structure to better fit the company. 2. Japan’s changing culture might influence the way Japanese business operates in the future because all of the rules and regulations will be different. This would be something new that the culture of Japan had never seen before. For reading through the case study it seems as though it is a positive and a negative thing. It’s a positive thing because it is creating profit for the business and a constant increase throughout the years. It is also instilling in the employees what they must do in order to keep their jobs. The negative effects are that they are losing the tradition and the values. This may cause some of the employees to not be as loyal as previous years. With that constantly hiring and changing management can have a negative effect on the company and how others view the company. The potential implications of such a change can cause the Japanese culture to be misunderstood. Tradition plays a major part in their everyday life so without a certain aspect of it, it could cause a lot of confusion and disruption (Global Business Today, 2011, pp. 126). 3. Traditional Japanese culture benefitted Panasonic in the 1950-1980s because it was based on traditional Japanese values such as strong group identification, reciprocal obligations and loyalty to the company. Employees were well taken care of and worked extremely hard. The company provided a variety of benefits such as housing, a guaranteed lifetime employment, pay systems that benefitted everyone and very generous retirement bonuses. I believe that traditional values weren’t necessarily a burden in the 1990s and the early 2000s but a hard aspect to live up to for future generations. The generation after that wasn’t as strong minded about working hard and becoming a “salaryman” with one company for the rest of their lives. They wanted more than that. So with that it caused Japanese firms to change its traditional ways of doing business. Although they had to cut their losses and lay off many employees that had been with the company for a long time it benefitted them in the long run (Global Business Today, 2011, pp. 125). 4. Panasonic was trying to establish an understanding with its employees that in order for you to get a bonus or a raise you were going to have to show the effort and time that you were putting into the company through your performance. Panasonic announced that they would also be showing managers what their score was on the new performance ranking system they had created. In order to successfully implement these changes the employees would have to be willing to cooperate with the company. The company would also have to be very strict and not cut corners to please employees that have been there for a certain amount of time. The implications for Panasonic if the changes are made quickly are that everyone will be on the same page. Profits should increase because the amount of time spent on implementing the changes will have a shorter turn around rate. If this process takes years or even decades to fully implement then it could cause problems for the business. A lot more time will be spent implementing the process and not enough focus on the actual business. This could also cause profit loss and discouragement within the company. Starting a process and not being able to complete cost money so a drastic profit loss could be in the future. 5. This Panasonic case has showed me that the relationship between societal culture and business success go hand in hand. Panasonic was able to come out of the hole that was created by its traditional values but not without failing and rebuilding. They changed a lot about their company just to fit into the eyes of society. This has also taught me that in order to be successful you have to have faith and loyalty within the company and with the employees.

References
Global business today (7th ed.). (2011). McGraw-Hill/Irwin.