Panasonic and Japans Changing Culture

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Panasonic and Japans Changing Culture
In Japan in 1918 Konosuke Matsushita founded Matsushita Electric a consumer electronics company which is known today as Panasonic. Panasonic has offices in 58 different countries and is regarded as one of the world’s largest electronics companies. (Panasonic, 2013)

Panasonic alike many other Japanese companies was established on a Confucian value system. The Confucian value system consists of three main elements; reciprocal obligations, honesty and loyalty. These elements form a majority of traditional Japanese values. (Smits, 2010) Hofstede, even though his work has been criticised, recognised some significant aspects of Japanese culture. These aspects included high uncertainty avoidance, high masculinity and a swing towards collectivism. These aspects also contribute largely to traditional Japanese values. These values were represented in such policies as lifetime employment and generous retirement bonuses. (Hofstede, 2013)

However cultures are dynamic, they change over time. The major shift in Japanese culture occurred during the 1990’s, which was mainly attributed to the change in perspective of the generation born after 1964. This change was evident in 1999 when Panasonic gave its new employees a decision between different employment packages. The first package gave the employees a large retirement bonus, subsidised housing and services and company social events. The second package gave the employees the same perks except instead of a retirement bonus a larger starting salary. The third package gave the employees an even larger still starting salary however none of the other benefits. In contradiction to traditional values 41% of new employees chose the second package. (Hill, 2011) This shows a move away from high uncertainty avoidance which was triggered by an increase in average wealth and a move towards individualism.

The primary criticism of this generation was their lack of commitment to traditional Japanese values in comparison with their parents. One of the more perceptible changes was a switch from a collectivist culture to a more individual culture. (Hill, 2011) It has been theorised that there is a correlation between economic development and a shift towards an individualistic society. This theory correlates with the article which states that a cause for the shift is the fact that the generation born after 1964 grew up in an economically richer society. This shift also affected organisational loyalty in the form of people changing jobs with greater frequency than ever before. (Reiner, 1991)

This shift in the paradigm of Japanese cultural values has an effect on traditional values. The ‘modernised’ value system in effect is polar opposite to traditional values which were achieved by a complete cultural shift. Which in turn insinuates that the further the culture evolves the less tradition is left in the value system, if trends current stay constant. This shift in cultural dynamics changes the undercurrents of doing business in Japan. A major change is going to be retention of employees. This is due to the switch from collectivism to individualism and the decrease in personal identification based on company strata in conjunction with decreased company loyalty. The implication of this is companies are going to have to build their HR departments and find ways to lower employee turnover to reduce training costs. However if trends continue the average worker is going to have an increased understanding of a wide range of markets due to numerous career changes which allow firms access to a greater number of ideas to cope with increasingly dynamic business conditions. If companies want to optimise the new cultural principles of lowered uncertainty avoidance and the shift towards individualism they are going to have to encourage new product development and add funding to research and development. (Reid, 1999) Panasonic have already identified this and moving...
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