Made In Japan

by Akio Morita

  After the war, both the labor law reforms and the destruction of the family-controlled holding companies were major contributors to Japan’s reconstruction. We also devised a union system in which the company family became the labor unit rather than the impersonal industry-wide kind of unions that finally developed in the United States. Of course the Japanese company unions belong to associations of unions that set goals and generally attempt to coordinate the concerns and demands of the member unions. But we have labor peace in Japan mainly because management does not use labor as a tool and tries to be aware of the concerns of labor. Some companies are, of course, better at this than others.

  In Paris not too long ago, someone said rather innocently to me that Japan is a capitalistic country. I said that it would appear so, but that actually, it would be more accurate to say Japan has a socialistic and egalitarian free economic system. When the laws were changed after the war, it appeared to many Americans as well as Japanese that the swing to the left could be dangerous. The labor laws that made it virtually impossible to fire people seemed a terrible intrusion into the traditional discretionary powers of management, especially to the older managers. But they were forced to accept these laws and they turned them to everyone’s advantage. Japanese managers thought that if everybody could have a familial attitude—and after all, Japanese tend to feel that way almost instinctively about their “Japanese-ness”—perhaps it would be easier to pull Japan out of the hole in which it found itself. That was the spirit that created what an American first called “Japan Inc.”

  Generally, in the United States, management’s attitude toward the labor force and even the lower-level executives is very hierarchical, much more so than in Japan, an Oriental country where Westerners always expect to see such hierarchies. When I visited the Illinois television assembly plant of Motorola, one of the first things I noticed was that the offices were air-conditioned, but out on the shop floor it was stifling, people were dripping with sweat, and big noisy fans were blowing the hot air around. The workers were plainly uncomfortable, and I thought, “How can you get quality work from people laboring under such conditions? And what kind of loyalty can they be expected to show to the big bosses in their cool offices!” In Japan people often used to say that the shop floor where the goods were made was always more comfortable than die workers’ homes. That has changed as the Japanese workers have become more affluent, and air-conditioning has become more common at home. By the middle of 1984, more than half of Japan’s homes and apartments had it. But back in the late fifties, we air-conditioned our factories before the offices.

  Amenities are not of great concern to management in Japan. The struggle for an office with a carpet, a water carafe, and an original oil painting on the wall is not common. Just recently a U.S. company, the maker of highly complex computerized graphics equipment, formed a joint venture with a Japanese company and the Japanese partner said to his foreign associate: “We would like you to design the showroom, but please allow us to design the office space upstairs.” It seemed reasonable enough. The showroom was beautifully appointed, with soft lighting and comfortable chairs for visitors and clients. The equipment was highlighted using modern display techniques, and there were video demonstrations and elegant four-color brochures on the company and its equipment. Upstairs, the entire office staff was housed in one big open room without partitions, just a grid of desks with telephones, filing cabinets and other necessary furniture in a simple, very Spartan arrangement. The U.S. partner raised his eyebrows, and his Japanese colleague explained, “If Japanese clients come into the office of a new and struggling company and see plush carpet and private offices and too much comfort, they become suspicious that this company is not serious, that it is devoting too much thought and company resources to management’s comfort, and perhaps not enough to the product or to potential customers. If we are successful after one year, we might put up low partitions. After two or three years, we might give the top executive a closed office. But for now we have to all be reminded that we are struggling together to make this company a success.” Exactly my sentiments. We want everybody to have the best facilities in which to work, but we do not believe in posh and impressive private offices. Or perhaps I should say we do not give such things priority. At Sony we have comfortable offices everywhere and some new and impressive buildings, but our headquarters in Tokyo is nothing more than a converted factory building. We have made it comfortable and functional, but it still bothers me a bit that visitors have to climb two short flights of stairs to get to the reception desk. Generally, in Japanese industry, the investment goes into those things that relate directly to the product. And often the building that houses a factory site will look very much like a warehouse. But inside it will have all the essentials. Too often I have found in dealing with foreign companies that such superfluous things as the physical structure and office decor take up a lot more time and attention and money than they are worth. Obviously, in some businesses it is important to put on a show for the clients, but people in the hardware business rarely need to do this. We like to give thought to the atmosphere within our plants, to provide a comfortable, simple, and pleasant work environment, which we believe has a direct effect on product quality.

  When we started the company, clothing was scarce and expensive on the black market. People came to work in an odd assortment of gear; returning soldiers wore bits of their uniform or old-fashioned suits that had been saved for many years. If a person was fortunate enough to have a good suit, he didn’t want to wear it to the office where he might risk burning a hole in it with acid or soiling it. Some of our employees just didn’t have the money to invest in a work jacket. So with company money we bought a jacket for everyone to wear in the office. Pretty soon these jackets became a symbol of our company family. As the company prospered, we could have done away with the jackets—we used to have a summer jacket and a winter one—because we were all being better paid and could afford our own, but everybody seemed to like the idea, and so we just decided to continue to provide them. In the beginning, we executives had a different colored name tag from the others, but we eventually adopted the same kind worn by everyone else. Today these jackets and tags are being used everywhere, even where class distinctions made people hesitant to wear them at first. Many of us liked our blue jackets, and I still wear mine occasionally.

  But in the early seventies, when diplomatic relations were restored with the People’s Republic of China and contacts increased and news coverage picked up, the papers often had pictures of large groups of Chinese in their Mao jackets all looking alike, and some people around Sony began to joke that when a group of us gathered for a meeting we looked like the people in the pictures from China.

  I wanted a change. And so on Sony’s thirty-fifth anniversary I asked the design departments of several Tokyo department stores to compete for the contract to design and supply the entire company with new jackets. They came up with some very good designs, I thought, and some of our people wore the jackets to see how they worked out on the job. There was no clear favorite. Finally, I took the problem to my friend, the fashion designer Issey Miyake. He came to the company and watched how the people worked. He went into the plants, the labs, and the offices to observe the kinds of movements they must make, and about a year later he came up with a simple and ingeniously designed gray jacket with red piping that has sleeves that can be removed, turning the jacket into a kind of vest that can be worn all year around. That ended the complaints; I figured correctly that even if people were not too pleased with the jackets, they couldn’t very well complain when they were wearing something created by one of the world’s top fashion designers. So nobody could doubt it, I made it a point to insist that Miyake put his label in every garment. Today one of those jackets on a Sony employee is as good as a credit card in business establishments near our facilities. The wearing of that jacket makes a person feel that he is part of our team effort, and merchants in the neighborhood will often gi
ve credit to someone who asks for it just on the strength of the jacket and the person’s name card.

  II

  Japanese attitudes toward work seem to be critically different from American attitudes. Japanese people tend to be much better adjusted to the notion of work, any kind of work, as honorable. Nobody would look down on a man who retires at age fifty-five or sixty and then to keep earning money takes a more menial job than the one he left. I should mention that top-level executives usually have no mandatory retirement age, and many stay on into their seventies and even their eighties.

  At Sony we have mandatory retirement from the presidency at sixty-five, but to utilize their experience and knowledge we keep former executives who have retired as consultants. We provide them with office space and staff, so that they can work apart from the day-to-day affairs of the company, at Ibuka Hall, a building located five minutes away from the headquarters building. From time to time, we ask them for advice and they attend conferences and other events as representatives of Sony. Many of those people who retire from managerial jobs find executive positions in smaller companies or subsidiary companies of Sony where their managerial experience and skill are needed and valued.

  Workers generally are willing to learn new skills. Japan has never devised a system like the American, in which a person is trained to do one thing and then refuses to take a job doing anything else—and is even supported by government funds while he looks for a job that suits his specific tastes. Because of Japan’s special situation, our people do not have that luxury. And our unemployment rate lately has not reached 3 percent.

  One old style of management that is still being practiced by many companies in the United States and by some in Japan is based on the idea that the company that is successful is the one that can produce the conventional product most efficiently at cheaper cost. Efficiency, in this system, becomes a god. Ultimately, it means that machinery is everything, and the ideal factory is a perfectly automated one, perhaps one that is unmanned. This machinelike management is a management of dehumanization.

  But technology has accelerated at an unparalleled pace in the past few decades and it has entailed digesting new knowledge, new information, and different technologies. Today, management must be able to establish new business ahead of its competitors, rather than pursue higher efficiency in manufacturing conventional products. In the U.S. and Europe today, old-fashioned low-level jobs are being protected while the new technologies are being neglected.

  More important, an employee today is no longer a slave to machinery who is expected to repeat simple mechanical operations like Charlie Chaplin in the film Modem Times. He is no longer a beast of burden who works under the carrot-and-stick rule and sells his labor. After all, manual labor can be taken over by machine or computer. Modem industry has to be brain-intensive and so does the employee. Neither machinery nor animals can carry out brain-intensive tasks. In the late sixties, when integrated circuits had to be assembled by hand, the deft fingers of Asian women were greatly in demand by U.S. companies. As the design of these devices became more and more complicated, along came more sophisticated machinery, such as laser trimmers, which required not deft fingers but agile minds and intelligence. And so this upgrading of the workers is something that every country will have to be concerned about, and the idea of preserving old-fashioned jobs in the modern era does not make sense. This means educating new employees and reeducating older employees for new challenges.

  That is not all. At Sony we at times have scientists participate in sales for a while because we don’t want our scientists to live in ivory towers. I have always felt they should know that we are in a very competitive business and should have some experience in the front lines of the business. Part of the training program for graduates who enter Sony as recruits fresh out of university includes a program where nontechnical persons undergo a month of training at a factory and technical persons work as salespeople in a Sony shop or department store, selling our products.

  Japanese labor practices are often called old-fashioned in today’s world, and some say the old work ethic is eroding in Japan as it has elsewhere, but I do not think this is inevitable. As I see it, the desire to work and to perform well is not something unnatural that has to be imposed on people. I think all people get a sense of satisfaction from accomplishing work that is challenging, when their work and role in the company are being recognized. Managers abroad seem to overlook this. People in America, for example, have been conditioned to a system in which a person sells his labor for a price. In a way, that’s good because people cannot coast; they know they have to work to earn their money or be fired. (I also think the way Americans make their children do work to earn their allowance is a fine idea; in Japan we often just give the money without requiring anything of our children.) In Japan we do take the risk of promising people job security, and then we have to keep motivating them.

  Yet I believe it is a big mistake to think that money is the only way to compensate a person for his work.

  People need money, but they also want to be happy in their work and proud of it. So if we give a lot of responsibility to a younger man, even if he doesn’t have a title, he will believe he has a good future and will be happy to work hard. In the United States, title and job and monetary incentives are all tied together. That is why, if a young person has a big job, management thinks he has to have a big salary. But in Japan we customarily give raises each year as employees get older and more experienced in the company. If we give an unusually high salary to one person, we cannot continue to give him annual increases indefinitely. At some point, his salary will have to level off, and at that point, he is likely to get discouraged. So we like to give the same sort of raise to all. I think this keeps our people well motivated. This may be a Japanese trait, but I do not think so.

  I believe people work for satisfaction. I know that advertisements and commercials in the U.S. seem to hold up leisure as the most satisfying goal in life, but it is not that way in Japan yet. I really believe there is such a thing as company patriotism and job satisfaction—and that it is as important as money. It goes without saying that you must pay good wages. But that also means, of course, that the company must not throw money away on huge bonuses for executives or other frivolities but must share its fate with the workers. Japanese workers seem to feel better about themselves if they get raises as they age, on an expectable curve. We have tried other ways.

  When we started our research laboratory, we had to go out and find researchers, and because these people had more education and were, naturally, older than our normal new employees we decided they should have higher wages, equivalent to U.S. salary levels. One suggested plan was to put them under short-term contract, say three years, after which we would decide whether to renew or not. But before we decided on this new pay scheme, I asked the new employees whether they would prefer the more common system of lower pay to start, but with yearly increases, or the three-year contract at a much higher wage.

  Not one of them asked for the American-level salary. Everyone opted for long-range security. That is why I tell the Americans I meet that people don’t work only for money. But often when I say it, they respond, “Yes, I see, but how much do you pay the ones who really work hard?” Now this is an important point. When a worker knows he will be getting a raise each year, he can feel so secure that he thinks there is no need to work hard. Workers must be motivated to want to do a good job. We Japanese are, after all, human beings, with much in common with people everywhere. Our evaluation system is complex and is designed to find really capable persons, give them challenging jobs, and let them excel. It isn’t the pay we give that makes the difference—it is the challenge and the recognition they get on the job.

  My eldest son, Hideo, may not be the best example of the typical Japanese worker, but he has an interesting and, I think, typical view of work in Japan. He has studied in Britain and the United States, and all his life he wanted to work for Sony. He went to w
ork as an Artists and Repertory man at the CBS-Sony record company on the urging of Norio Ohga. He and I felt that for him to come directly into Sony headquarters would be wrong, because of the family connection and the overtones of nepotism. So he was proving himself at CBS-Sony. He worked with foreign and local artists and became famous and successful in the record industry in Japan. He worked very hard, from about noon until three or four o’clock in the morning, doing his regular office business during the day and then dealing with musicians after they finished their work. Hideo doesn’t drink, and so it was hard for him to sit around the Tokyo discos and bars with these rock stars, drinking Coca-Cola while they relaxed with whiskey in the wee small hours of the morning. But it was important for him to do this, and although he could have gone on a long time resting on his laurels, he took stock of himself on his thirtieth birthday and made a decision.

  As he put it, “In the record business, there are many people in their late thirties and early forties wearing jogging shoes and white socks and jeans and T-shirts to the office. I looked at those guys and said, I don’t want to be like that when I am forty or forty-five. This business is fine and I have been successful, and I have no reason to leave it. If I keep this job, I thought, I might end up being a top officer of CBS-Sony, but I didn’t want to see myself at fifty coming into the office at one o’clock in the afternoon in jogging shoes and white socks saying ‘Good morning.’ I felt I had to prove to myself after seven years in the record business that I could work from nine to five, like ordinary people.”