Panasonic and Japan's Changing Culture

Case #2; Panasonic and Japan’s Changing Culture 1. Some of the drivers of the cultural changes in the 1990’s with Panasonic were that Japan’s generation of workers, starting with the generation born in the 1960’s, did not wholly believe in being a “salaryman” and working for a company from when they start until when they retire. After many years, in the 1990’s Japan entered an economic slump that lasted the majority of the 1990’s.

Only a few companies at first started to lay off employees and go back on their promises of employment until retirement because the older their workers, although they worked hard, also were less efficient than younger workers were. As the younger generations saw this happening they concluded that loyalty to both the company and workers would not be reciprocated anymore and became less harder working than previous. This undermined the traditional culture in Japan of the central bargains of housing and retirement packages for an employees hard work and loyalty. 2.

Japan’s businesses in the future have to operate with more than one plan when they hire workers to effectively. In 1999 Panasonic gave recruits three different choices when they were signed on in employment. They could continue with being given housing, go free to company social events, and buy cheaper services from banks, while also receiving a two year salary bonus when they retired. They could choose to forgo the retirement bonus, while keeping the company housing and be given a higher salary, or they could forgo the retirement bonus and any subsidized services but would be given an even higher salary.

In addition to the changes in hiring, companies needed employees to be more risk taking and needed to encourage individuality which is something that was not very prevalent in Japan. Without employees taking risks, companies would suffer and that is what happened to Panasonic as they were forced to close thirty factories, and cut 13,000 jobs while selling “huge amounts of assets”. 3. Japanese culture in the 1950’s-1980’s benefited Panasonic greatly because of how after the World War II defeat, Japan was humiliated and it seemed fair that they would be taken care of if they worked hard for their company.

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For Panasonic this was a great thing because employees worked extremely hard for the greater good of Panasonic and Panasonic responded by giving the employees “blessings” of company housing, and free social events. 4. With Panasonic cutting 15,000 employees and closing another additional 27 plants, Panasonic is trying to achieve a lower overhead cost in operation and also is trying to find out who their best workers are so that they are not kept down when they should be promoted.

By quickly responding to the recession, it showed a change in Panasonic’s company policies and shows that they might be moving even further away from company subsidized housing and to make employees become harder workers not because they know that they cannot be fired, but that they can be fired, at any time. If Panasonic implements these changes quickly, they will receive a lot of backlash from all those displaced employees and if they did it like this it would truly symbolize how Panasonic has changed into a company that is becoming westernized and is only concerned with how the company does and not their employees.

If the changes take years to implement, although it would greatly affect the profitability of the company, it would give employees chances to adapt to changes of no longer being employed and give them chances to be hired in another company. By making changes slowly, Panasonic would be able to claim that it still wished to use the old way of never cutting jobs but it could not do it in this economy and had to do so to survive. 5.

The Panasonic case teaches me that there is a fine line between societal culture and business success and sometimes you have to be able to choose between the two to realize which is more important to you. To some companies, such as Panasonic, trying hard to keep with the societal culture becomes too much of a strain for a company to bear so they are forced to adapt and realize that business success is more important that having all your workers love you. It may not be the type of business practice that gives you the best reputation but it will give you the greatest profit margins.

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