Strategic human resource management of Japanese ...



|Strategic human resource management of Japanese multinationals - A case study of Japanese multinational companies in the UK |

|Dipak R. Basu, Victoria Miroshnik. The Journal of Management Development. Bradford: 1999. Vol. 18, Iss. 9;  pg. 714 |

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|Subjects: |[pic][pic][pic][pic][pic]Studies,  Human resource management,  Management development,  Multinational corporations |

|Classification Codes |9130 Experimental/theoretical,  6200 Training & development,  9175 Western Europe,  9179 Asia & the Pacific,  9510 Multinational corporations |

|Locations: |United Kingdom,  UK,  Japan |

|Author(s): |Dipak R. Basu,  Victoria Miroshnik |

|Article types: |Feature |

|Publication title: |The Journal of Management Development. Bradford: 1999. Vol. 18, Iss. 9;  pg. 714 |

|Source Type: |Periodical |

|ISSN/ISBN: |02621711 |

|ProQuest document ID: |116353684 |

|Text Word Count |5737 |

|Article URL: |

| |clntid=31317 |

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|Abstract (Article Summary) |

|This study analyses the human resources management system in Japanese automobile companies, Toyota and Nissan, in their overseas |

|production plants in the UK and analyses differences between their original human resources management system in Japan and in their |

|foreign operations. It found that these companies, as far as their internal operations are concerned, have tried to implement their |

|original practices in spite of cultural differences. However, in the case of production management system they are not completely |

|successful because of organisational differences in their foreign locations. The paper analyzes the effects of these novel practices |

|on the industrial scene in the UK in general. |

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|Full Text (5737   words) |

|Copyright MCB UP Limited (MCB) 1999 |

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|Dipak R. Basu: Nagasaki University, Japan |

|Victoria Miroshnik: Nagasaki University, Japan |

|Japanese manufacturing organisations have made a lot of inroads in overseas production bases. The successes of their enterprises have|

|raised interests on the system of production and organisation peculiar to the Japanese business firms (Wickens, 1987; Suzaki, 1987). |

|Particularly that is true about the automobile production sector where non-Japanese firms are adopting Japanese methods of management|

|in a number of countries in order to compete effectively against Japanese firms (Womack et al., 1990; Monden, 1983; Hayes, 1981; |

|Imai, 1986). Spread of this enthusiasm is basically due to the foreign production bases of some leading Japanese automobile |

|companies. In order to understand the strategic management issues regarding Japanese overseas affiliates we discuss here the |

|essential characteristics of the Japanese system of management (Hayes, 1981; Shingo, 1981, 1985). |

|Japanese system of management is a complete philosophy of organisation which can affect every part of the enterprise. There are three|

|basic ingredients: lean production system, total quality management and human resources managements (Ohno, 1978; Nohara, 1985). These|

|three ingredients are interlinked in order to produce total effect on the management of Japanese enterprises. Because Japanese |

|overseas affiliates are part of the family of the parent company, their strategic managements are part of the management strategy of |

|the parent company (Shimada, 1993; Abo, 1994; Morita, 1992). |

|The basic idea of the lean production system is described in Table I. The fundamental principles are described at the bottom of Table|

|I. At all levels the fundamental idea is "humanware" (Shimada, 1993) which is described in Figure 1. "Humanware" is defined as the |

|integration and interdependence of machinery and human relations and a concept to differentiate between different types of production|

|systems. |

|The purpose of this paper is to analyse management styles in Japanese automobile companies in their foreign locations and to examine |

|how far they maintain their original management styles in foreign locations. A number of studies have indicated that management |

|styles depend on the types of organisations and their strategic ambitions (Blyton and Turnbull, 1994; Purcell, 1987; Edwards, 1995; |

|Purcell and Ahlstrand, 1994; Goffee and Scase, 1995). In the existing studies of Japanese multinational companies no clear pictures |

|emerge. In a number of cases, particularly in USA cultural factors dominate over the global organisational plans (Florida and Kenney,|

|1991). Similar experiences are observed in the case of operations of American overseas companies (Kujawa,1979; Hofstede,1985; |

|Negandhi et al., 1985; Hofstede, 1993). We have analysed two Japanese multinational companies, Nissan and Toyota, in their British |

|operations with particular reference to their human resources management styles. |

|The method of analysis is basically interviews with the workers and managers of these two companies, Nissan and Toyota, in both |

|Britain and Japan. We have described in detail questionnaires we have used and the answers we have received. We have visited the |

|Sunderland plant of Nissan and the Barnaston plant of Toyota. In Japan we have visited the Sizuoka plant of Nissan and the Nagoya |

|plant of Toyota. We have interviewed 250 workers chosen randomly in each plant. For questions regarding management strategies, we |

|have interviewed vice-presidents, plant managers and directors of these companies in the UK. |

|Japanese management system: an overview |

|We discuss below some of the important features of the Japanese management system. |

|Continuous improvement |

|The constant strive for perfection (Kaizen in Japanese) is the overriding concept behind good management, in which the production |

|system is being constantly improved; perfection is the only goal. Involving everyone in the work of improvement is often accomplished|

|through quality circles. These are activities where operators gather in groups to come up with suggestions on possible improvements. |

|There are schemes for implementing suggestions, rewarding employees and feeding back information on the status of the suggestions. |

|Zero defects |

|In order to attain high productivity it is essential that all parts and products are fault-free from the very beginning. The goal is |

|to work with products that are fault-free through the continuous improvements of the manufacturing system. Thus zero defects denote |

|how a lean company works in order to attain quality. In a lean production system it is important to move towards a higher degree of |

|process control. Each process is controlled through knowledge gathered about the parameters of the process. Thus instead of |

|controlling the parts produced the process is kept under control. The idea is to prevent defects from occurring, through discovering |

|errors that can lead to defects. Lean production system uses "autonomous defect control" which is an inexpensive means of conducting |

|inspection of all units to ensure zero defects. Quality assurance is the responsibility of everyone. Identification of defective |

|parts is the responsibility of workers, who are allowed to stop the production line in the event that defective parts are found. |

|Responsibility for adjusting the defective parts is delegated to workers. As a consequence the number of personnel working in the |

|quality control department can be reduced; the size of the adjustment and repair areas can be reduced too. |

|Manufacturing tasks are organised into teams. This makes the workers more aware of the need to manufacture only fault-free parts. An |

|important reason for the improved awareness was that the physical contact between manufacturing stages allowed for better |

|communication. Largely through the use of teams, workers found it beneficial to have the responsibility for correction resting with |

|that part of the process where the error has been committed. Through the use of statistical process control, with tests after each |

|process, the company can get better control over their production processes. |

|Just-in-time |

|Accomplishing fault-free parts is a prerequisite to achieving just-in-time deliveries. The principle of just-in-time means each |

|process should be provided with the right part, in the right quantity at exactly the right point of time. The ultimate goal is that |

|every process should be provided with one part at a time, exactly when that part is needed. It is possible to have different levels |

|of just-in-time. First, there is the case when parts are moved between different processes in lots. Second, parts are differentiated |

|according to product variants. Third, there is sequential just-in-time. Here parts arrive with reference to the individual products |

|on the line. For example, car seats may arrive at the assembly line in the exact order in which they are needed. In general, the |

|higher the level of just-in-time a company can master the better. However, sequential just-in-time is not always needed. It will vary|

|depending on the nature of the products. When the products are standardized and relatively inexpensive it may not be too important to|

|achieve the highest level of just-in-time. |

|Pull instead of push |

|Scheduling of materials is closely related to the principle of just-in-time. It is useful to look at the relationship between forward|

|scheduling and backward request. Before starting to implement lean production in a company final assembly is made to customer order. |

|In all other stages of the manufacturing process productions are according to a forecast. Gradually the number of manufacturing |

|stages producing according to customer order has to be extended. Thus somewhere in the material flow is a point where pull meets |

|push. Behind this point, backward requests are used. Ahead of the point there is forward scheduling. This may create difficulties in |

|stock-outs or too large stocks at this pull-push point. This can be due to the difficulties in making correct forecasts (Karlsson and|

|Ahlstrom, 1996). |

|Multifunctional teams |

|The most important feature of the organisational set-up of the lean production system is the extensive use of multifunctional teams, |

|which are groups of workers able to perform many different works. The teams are organised along a cell-based production flow system. |

|Owing to the rotation of the tasks in a team, the increased flexibility reduces the vulnerability of the production system. The |

|number of job-classifications also declines. Workers have received training to perform a number of different tasks, such as |

|statistical process control, quality instruments, computers, set-up performances, maintenance etc. They also have to be trained in a |

|number of functional areas such as materials management, purchasing, maintenance and quality controls. The company has to rotate the |

|workers among tasks frequently. |

|Decentralised responsibilities |

|In the lean production system responsibilities are decentralised. There is no supervisory level in the hierarchy. The multifunctional|

|team is expected to perform supervisory tasks. This is done through the rotations of team leadership among workers. As a result the |

|number of hierarchical levels in the organisation can be reduced. The number of functional areas that are the responsibility of the |

|teams increases. People who are not required as a result of the reductions of requirements for indirect controls normally move to |

|other areas because in the Japanese system the company has no lay-off policy (Kumazawa and Yamada, 1989). |

|Vertical information system |

|In a multifunctional set-up it is vital to provide information in time and continuously in the production flow. Information can be of|

|two types: |

|(1) Strategic information about the overall performances and plans of the company. |

|(2) Operational information about performances of the teams, quality productivity, lead times and other factors in the production |

|process. |

|Operational information is more frequent than strategic information about market plans, production plans, process development plans |

|and financial performances. |

|Limits to lean |

|However, lean production system is not the only alternative to the traditional production system. There are: |

|(1) German style quality production model based on a highly skilled work consensus; |

|(2) systemic rationality model, which are common in the information technology firms; and |

|(3) the Swedish model of Volvo motor company, reflective production system, in which production teams have direct contact with the |

|customers (Cusumano, 1994; Redher, 1994; Sasaki, 1994; Sandberg, 1995; Nomura, 1993; Altmann, 1995; Jonsson, 1995). |

|Strategic managements of Japanese multinational companies overseas |

|Strategic management of a multinational company involves evaluations of its own domestic competitiveness and utilises these |

|experiences in a global setting. At the same time the company has to decide the configurations of its operations across the world, |

|i.e. where to locate which facility. Some detail analysis of two Japanese multinationals, Nissan and Toyota, and examinations of |

|basic characteristics of their operations and their style of management are presented below. |

|Nissan |

|Nissan Motor Manufacturing (UK) Ltd was established in 1984 as a part of the Nissan Japan's global investment strategies. The |

|production started in 1986. Nissan announced, in that year, plans to accelerate the UK manufacturing programme by increasing local |

|content to 60 per cent by 1988 and 80 per cent by 1991 with a plan to produce 100,000 units. By 1994 Nissan from its UK production |

|base has exported cars to 34 different world markets. By 1995 Nissan's total investment reached Pounds 1.25 billion in the UK and the|

|plant in the UK has produced one million cars and one million engines (Company Report, Nissan, 1998). |

|Employment in the UK plant has gone up from 470 in 1986 to 4,038 in 1995. Total production in 1995 reached 215,346. Out of that |

|161,215 were for export to other countries. Thus Nissan has successfully used the UK as its export base. At the same time it has |

|created a network of suppliers throughout Europe. |

|The philosophy of the company in the UK and the management system |

|According to the company profile "Nissan's Sunderland (UK) plant aims to build profitably the highest quality car sold in Europe to |

|achieve the maximum possible customer satisfaction and thus ensure the prosperity of the company and its staff". Company's management|

|style reflects that. |

|Organisational layout of production management system |

|Nissan plant in Sunderland, UK includes a car and component manufacturing facility, an engine machining and assembly plant, a |

|foundry, a plastics injection and blow-moulding plant and a service parts operation all on one site. Environmental considerations are|

|high in the list of priorities in the production system. The use of water based paints, increased volume of recycling activities and |

|the provision of a good operator environment are some of the elements. "Just-in-time" production systems are applied throughout |

|internally. Nissan does not build a large buffer stock of doors, bonnets, and boot lids, the total amount of stock in process time in|

|the body assembly plant is less than one hour. Production flow chart (Figure 2) reflects the optimum design set-up according to the |

|internal "kanban" system. In the "kanban" system each department of the production process should be located in a logical style so as|

|to provide a continuous flow of materials as demanded by the production process. The idea is not to have any inventory in each |

|department but to demand when required. The production management system and plant design must ensure that these demands can be met |

|immediately. Lay-out design of the plant is crucially important as most processes are automated , run by robotics. Optimum lay-out of|

|plants ensures that no robotic system would stay idle or run into each other. Each department puts up a notice outside if they need |

|some parts or components. This "notice" is then photographed by overhead cameras and the information gets transmitted to the central |

|material management centre who transmits this to the suppliers and to the parts manufacturers. In Japan, parts manufacturers are |

|located within a radius of five miles from the main plant, thus external "kanban" is feasible. In the UK, external "kanban" is not |

|possible, because parts manufacturers are located in different parts of the UK and far from the main plant. |

|Quality management |

|Total quality is a philosophy that runs through every aspect of the business, the way in which the plant is run and the way in which |

|the cars it produces are built. Quality is not something left to quality control staff. It is the responsibility of every single |

|person in the organisation. Everyone is made fully aware that they have a valuable and significant role to fulfil. Quality at |

|standards and targets are set in all areas and the plant's performance monitored against these. Results are regularly reviewed and |

|fed back to help improve individual processes. Parts quality is also constantly monitored using special test rigs backed by extensive|

|chemical and metallurgy laboratory facilities. The plant's own quality check process is supplemented at random by Nissan's world |

|auditors. |

|Human resources management system |

|The aim of the personnel management system in Nissan plant is to create "mutual trust and cooperation between all people within the |

|plant". It involves teamworking where the management encourages and values the contribution of individuals who are working together |

|towards a common objective and who continuously seek to improve every aspect of the business. It aims for flexibility in the sense of|

|expanding the role of all staff to the maximum extent possible and puts quality consciousness as the key responsibility above all. |

|The production system builds in quality rather than inspects and rectifies. These strict targets are assisted by the fact that the |

|company gives common terms and conditions of employment to all the staff. For example everyone is salaried; there are no time clocks;|

|the sickness benefit scheme, private medical insurance, performance appraisal system and canteen are the same for all. The company |

|believes that "high calibre", well-trained and motivated people are the key to success. Table II regarding the training shows the |

|importance the company attaches to both on-the-job and off-the-job training. |

|This emphasis on training has resulted in a sharp increase in productivity; the productivity level of the British workers which at |

|the beginning of the operation was very low is now comparable to the productivity level of Nissan in Japan. |

|Impact of Nissan on British industrial management |

|Although it is very strange that just one foreign company can significantly influence the way the host country will run their |

|industries, something of that nature has taken place in the UK due to Nissan and other Japanese manufacturing companies. |

|There are three main elements in the improved techniques introduced into UK manufacturing in the past ten years from 1986 to 1996: |

|(1) a commitment to "Kaizen" or continuous improvement; |

|(2) cooperative relationships between workers, managers and suppliers; |

|(3) emphasis on measuring all aspects of business, from serious faults to misplaced labels to identify precisely what needs |

|improvements. |

|Before the establishment of Japanese manufacturing bases in the UK, UK managers were reluctant to utilise these concepts because of |

|their fear that it may lead to serious industrial disturbances; also it is not in their psychology to put so much emphasis on |

|non-technical aspects. With the arrival of Japanese car-manufacturing companies like Nissan, Toyota and Honda it has become a |

|compulsion to introduce the Japanese style of management in the UK so as to increase the level of productivity to the Japanese level.|

|The Japanese effect was introduced through the suppliers of components to Nissan and other Japanese companies. Leading engineering |

|firms like GKN or small companies like Frederick Woolley of Birmingham got to accept the standard of quality of these products and |

|maintenance of supply line as part of their business deal with Nissan. Even UK competitors like Ford Motor Company were forced to |

|change in order to be competitive with the Japanese car manufacturers. |

|Ford has introduced a Japanese system of production-inventory system in collaboration with Mazda, another Japanese car market, in |

|their plants in the UK. The most significant change took place in Rover car plants which were in collaboration with Honda of Japan. |

|Honda has introduced both the Japanese management system and automated production system in Rover. |

|However, what is true about the big rival UK car manufacturers is not true about the smaller supplier of components. The UK has |

|achieved significant improvements in productivity and quality standard, but the networks of supply chains to the large manufacturers |

|are yet to accept the Japanese system fully. Nissan estimates that the number of suppliers meeting its top standard of 10 faults per |

|million parts delivered has risen from 16 out of 200 to about 50 in the past four years up to 1996. However, the same figure for |

|Japan is about 150. |

|The Japanese effect weakens with distance from source. Nissan has influenced small component suppliers such as Frederick Woolley who |

|supplies to Lucas who in turn supplies to Nissan. Lucas has influenced its own suppliers. However, Frederick Woolley has fewer than |

|100 faults per million parts; its own suppliers score 3,500 or more. The smaller companies further down the supply chain have little |

|direct contact with Japanese inspired method. |

|Some of the larger companies in the UK are having difficulties in accepting Japanese standards. Under Nissan's QCDDMI supplier |

|evaluation system, suppliers are rated for quality, cost, delivery, development of new products and management. Most suppliers accept|

|the first four, but dislike being rated on management. |

|Nissan's influence is not limited to the motor industry. Managers from all over the UK come to the Nissan plant. Government has |

|sponsored teams of experts to learn from Nissan, Toyota and Honda. |

|The significant effect of Japanese investment on UK industrial managements are in the drive for quality and a better relationship |

|between the managers and workforce. |

|Toyota |

|Toyota was established in Japan in 1937 and its first overseas production began in 1959 in Brazil. Expansion continued throughout the|

|1950s and 1970s with the spending of several overseas plants in Africa, South America, South East Asia and Australia. In 1985, a |

|joint venture company was established in the USA and its own vehicle plants were established in the USA and Canada (in 1988). Toyota |

|(UK) was established in 1989. Production in the UK plant started in 1992; current production is 100,000 units of vehicle with an |

|investment of Pounds 700 million. The engine plant has investment of Pounds 140 million or with the current production of 100,000 |

|units of engine. The target production capacity was recently raised to 200,000 units of vehicle with a further investment of Pounds |

|200 million. It is a relatively new plant. |

|Production and operation system |

|Toyota UK's aim is to satisfy the customer by providing the highest quality at lowest possible cost in a timely manner with the |

|shortest possible lead times. It has a complete manufacturing operation including press and weld, paint, plastics, assembly and |

|engine plus a comprehensive environmental control facility. Quality is built in at every stage and confirmed throughout the process. |

|In the "press and welding" section coils of steel are pressed out into "blanks", flat sheet shaped into the basic part in a pattern |

|which minimises waste steel. Operating to just-in-time production, blanks are cut as required by the press lines. When the press |

|lines require parts to be sent forward, order-details are entered on computers to ensure timely transfer by automatic guidance |

|vehicle (ABV) to the press machines, the largest of which is capable of exerting a pressure of 4,000 tonnes. The presses give each |

|part its third dimension using dies. Dies can be changed very quickly so stocks are kept to a minimum according to the Toyota |

|production system, saving time, money and space. We have to remember that the so-called Japanese style production-inventory systems, |

|which include just-in-time production, kanban system, total quality management, cell-based layout designs, were all invented in |

|Toyota plants in Japan during the early 1950s. |

|The completed body panels are welded together (90 per cent done by robots) into larger main sub-assemblies. These sub-assemblies are |

|then brought together by robot to form a complete body shell. Throughout the process, team members and technology work together to |

|build a high quality vehicle. |

|At each stage, the team members check the quality of the work before passing the vehicle on while a number of automated intelligent |

|systems interact to instruct and control the car building system. The car then needs to go through painting, plastic moulding of |

|instrument panels and engine assembly. Despite around 2,500 parts having to be fitted to each car, there are only two temporary parts|

|storage areas where a maximum of eight hours' stock is held. A manifest (printed document) is fitted to the car, containing details |

|of its specifications and providing visual control throughout the assembly process. The car then travels down the assembly line. |

|Throughout the process, each member is responsible for the quality of work they produce and pass on, so an audio cord adjacent to the|

|line enables each member to stop the production line if they have a concern. The cord is pulled once to call support from the team |

|leader; in many cases the problem is addressed quickly, the cord is pulled again by the team leader and the line continues never |

|having stopped. If the problem is a little more serious, the team leader will allow the line to stop until the concern is resolved. |

|Although quality is built in at every stage a complete functional and visual inspection is carried out before line-off to ensure |

|complete customer satisfaction. |

|Comparative management styles in Nissan and Toyota |

|In order to examine the characteristics of the supervisory style in Nissan we have taken the opinions of several people in the plant |

|at both shopfloor workers and higher management levels. The opinion expressed on the management style can be summarised as follows: |

|Appendix A describes the management style in Nissan (see Appendix 1 for Toyota's management style) which is very Japanese in nature; |

|it drives out class distinctions that exist in other industries in the UK, where the managerial staff and ordinary workers live |

|separate lives, with separate facilities. The equal opportunity for every employee is also a new feature in the UK's industrial |

|management policies. Table III shows that objectives of partner selection for Nissan (we could not get any response from Toyota for |

|this questionnaire) are on similarities of technologies and management practice and on the market entry. Political connection is |

|important as for a new and a foreign company it helps to establish smooth relationships in supply chains and distributions. In Table |

|IV we can see the causes of conflict for Nissan (we could not get any reply from Toyota for this questionnaire) with the suppliers |

|are due to different management practices. We have noticed that in Nissan although there is successful implementation of the internal|

|"just-in-time" production inventory management system, it is not so successful regarding the external suppliers of components and |

|distributors which are not yet used to the Japanese system. However, "personnel conflict" is not an important factor in the conflict.|

|In TableV (Appendix 2 for Toyota) we can see that traditional argument of the economist regarding foreign investment flows are not |

|valid. Exchange control or closeness of raw materials are not important, but developments of new market, geographical |

|diversifications and future protection of existing markets are important factors along with the government regional policies. Their |

|observations are against the accepted Western ideas on foreign investment which demand open foreign trade and no regional policies of|

|the host government. |

|For Toyota at every level there are Japanese managers shadowing their local counterparts. This is different from that in Nissan these|

|local people are all in command, Japanese managers are very few. There are no local partners for Toyota, unlike Nissan; there are |

|internal "just-in-time" production and inventory systems, but an external "kanban" system with the supplier is not yet developed (see|

|Table VI). This is due to the fact that suppliers in Europe have not yet integrated their production and management system to that of|

|Toyota. In the "case of internal management" the style is very similar to that of Nissan, with unified facilities and same job status|

|for all. |

|Toyota, just like Nissan in the UK, strives to achieve an organisation in which all employees can develop to their full potential. |

|Teamwork is an essential element of both companies' spending philosophy believing that a well coordinated group can accomplish far |

|more than the sum of individual effort. On the average about 100,000 man-days are spent on training prior to production start-up for |

|a particular model in both of these companies (Company Report, Toyota, 1998). Training is held in all locations throughout the world.|

|UK workers can go for training in Japan, the USA and Canada and the workers from Nissan and Toyota's foreign and Japanese |

|establishments can come to the UK for training. Before the start of production process for a particular model, on average a further |

|20,000 man-days have been spent on specific training courses off-the-job in both of these establishments (Company Report, Toyota, |

|1998). The costs and time spent on continuous on-the-job training are almost immeasurable. |

|Changes in Japanese system |

|Japanese companies no longer depend exclusively on the concept of lean production system. Owing to changes in the external economic |

|environments, collapse of the "bubble" economy of the late 1980s, rise in the exchange value of the yen which makes Japanese exports |

|too expensive, rising costs of labour in Japan have provoked changes in the management system of the Japanese companies (Katayama and|

|Bennett, 1996; Miyai, 1995; CJAWU, 1993). The main competitive pressure has been to expand market shares. The principal means of |

|achieving this has been through price competition. This in turn has reduced profits, thereby inviting cost reductions and increased |

|revenues. Cost reductions are associated with Kaizen, continuous improvements, which has stimulated further price competitions. |

|Increased revenues need increased sales volumes, new products and diversified products. That demands new investments, more indirect |

|labour, increasing break-even point and reductions of profits. During the "bubble" economy this continuous cycle was maintained. Now |

|larger sales volumes are difficult to achieve due to stagnant consumptions. There are also reduced opportunities for Japanese |

|companies to rely on exports as a means of compensating for lower domestic sales. |

|The production system is changing and gradually adopting a more flexible system with the following characteristics: |

|- Production system is more flexible in order to adapt itself to changes in demand; this will reduce costs of production. |

|- Achievement of lower fixed costs using fewer frequent changes in products and less replacement of equipment is being achieved. |

|- Technological solutions are being implemented in order to have flexibility in production system design on both downstream and |

|upstream products. |

|- Efforts are there to reduce work-in-progress and set-up times by grouping of parts and products into families. |

|- Standardised modules of established and reliable design are being incorporated into new products which allow greater mixing of |

|products. |

|- Mixing of productions is there in order to allow a variety of products to be manufactured without large inventories. |

|- There are extensive usages of Kaizen activities and TQM (total quality management) and TPM (total productive maintenance). |

|Conclusion |

|We can see that Japanese companies in the UK have tried to maintain their own management styles despite cultural differences and have|

|succeeded in many ways not only in their own plants but have influenced a number of UK companies associated with their operations. |

|Although the basic features of Japanese style management system (i.e. just-in-time production system) cannot be transplanted in the |

|UK in the same way that it was implemented in Japan, both Nissan and Toyota have successfully implemented this system internally in |

|their plant management system as far as the relationships between workers-managers are concerned, which is extremely important in a |

|class dominated society like the UK. |

|Currently when the yen has depreciated to levels somewhat below its recent peak, prospective economic trends in the USA and Europe |

|are uncertain. The environments for exports from Japan remain severe. Japan is yet to recover from its recessions since 1991 although|

|a gradual recovery is expected. However, a large increase in domestic demand for all these producers discussed is hard to predict. |

|Thus competition for market share will intensify in future. Against this background Japanese automobile companies are maintaining |

|their efforts to enhance the competitiveness of their products by bolstering R&D, augmenting efficiency of their manufacturing |

|system, strengthening their sales activities and further localising their overseas operations. |

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|Appendix 1 |

|See Table A1. |

|Appendix 2 |

|See Table A2 |

|[Illustration] |

| |

|Caption: Table I.; Lean production system; Table II.; Training facilities in Nissan, UK, 1995; Table III.; Nissan: Objectives for |

|partner selection; Table IV.; Nissan: Causes of conflict with partners; Table V.; Nissan: Reasons for choosing the UK; Table VI.; |

|Toyota: Reasons for choosing the UK; Table AI.; Management style in Nissan; Table AIa.; Management style in Nissan; Table AII.; |

|Toyota management style; Table AIIb.; Toyota management style; Figure 1.; Japanese humanware model; Figure 2.; Production flow |

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