Changing employment relation systems in Japan:cases of the Mitsubishi Chemical Group and the Federation of Shinkin Banks

Over the past decade or so a number of changes have been observed in traditional Japanese employment relations (ERs) systems such as an increase in non-regular workers, a move towards performance-based systems and a continuous decline in union membership. There is a large body of Anglo-Saxon and Japanese literature providing evidence that national factors such as national institutions, national culture, and the business and economic environment have significantly influenced what were hitherto three ‘sacred’ aspects of Japanese ERs systems (ERSs). However, no research has been undertaken until now at the firm level regarding the extent to which changes in national factors influence ERSs across firms. This article develops a model to examine the impact of national factors on ER systems; and analyses the impact of national factors at the firm level ER systems. Based on information collected from two different groups of companies, namely Mitsubishi Chemical Group (MCG) and Federation of Shinkin Bank (FSB) the research finds that except for a few similarities, the impact of national factors is different on Japanese ER systems at the firm level. This indicates that the impact of national factors varies in the implementation of employment relations factors. In the case of MCG, national culture has less to do with seniority-based system. Study also reveals that the national culture factors have also less influence on an enterprise-based system in the case of FSB. This analysis is useful for domestic and international organizations as it helps to better understand the role of national factors in determining Japanese ERSs.

Do Keiretsu really hinder FDI into Japanese manufacturing?

This paper examines an issue that has received a good deal of comment in the literature, but little analysis. It has been often argued that the presence of the Keiretsu in Japan has been instrumental in deterring multinational firms from entering Japan, though evidence for this is patchy. We therefore present some new analysis of this issue, evaluating the links between Keiretsu presence and inward investment penetration across sectors in Japan. We show that Keiretsu presence is associated with inward investment penetration. Once one allows for factors such as market structure, then Keiretsu attract rather than deter FDI. We further offer some explanation of why this may be, and contrast our findings with earlier work. RP0816.