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e-book Shifting Boundaries of the Firm: Japanese Company - Japanese Labour

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Overview This book investigates how different types of Japanese management systems are able to motivate stakeholders, including employees, top management, stockholders, customers and transaction partners, to participate actively in the organizational behavior that improves business performance.

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Write a Review. The Development and Structure of Japanese Enterprise Unions John Benson The major reason for writing a paper on Japanese unionism is that much of the debate assessing Japanese enterprise unions was set in the pres period when the economy was strong and there was a shortage of skilled labour.

Thus, whilst some commentators argued that Japanese enterprise unions were little more than an arm of management, [1] it was difficult to refute the argument that this form of unionism had resulted in real wage and benefit increases for a considerable period of time whilst generally ensuring a high level of job security for large numbers of workers.

Shifting Boundaries of the Firm

It is time to provide a more contemporary assessment of this form of union organization. Trade union history and development The rapid industrialization and economic growth that occurred after the Meiji Restoration in transformed many feudal workers to wage labour and led to a severe shortage of skilled workers. These conditions encouraged the formation of trade unions, although the reservoir of cheap agricultural labour meant that it would be some years before a viable union movement would emerge. In these early years attempts by workers to win improvements in wages, benefits and working conditions by engaging in strike action frequently met with strong opposition from employers and the government.

Despite numerous attempts to form unions during the s and s, labour remained largely unorganized until the end of World War I. After this time the trade union movement began to develop, although union membership advanced slowly. A number of large-scale strikes occurred in the s and in the early s. By this time over unions had been established, although they had recruited less than 10 per cent of the workforce.

The aim of this organization was to control radical elements in the workforce and was part of a general crackdown on worker opposition to employers or government.


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While such unions had existed earlier, they were now strongly supported by management in terms of recognition and provision of facilities. Union types and structure Since the s, over 80 per cent of union members have been part of an enterprise union which has exclusive representation within the company, although in some companies a weaker, second enterprise union or industrial-type union also existed. Nevertheless, most unionized enterprises have only one union representing employees [10] and this type of union accounts for over 95 per cent of all unions. This enterprise-based structure meant that unions tended to be found in the larger companies and government agencies where organising large numbers of employees was possible.

The enterprise structure of Japanese unionism has meant that the major objectives of these unions have been the pursuit of economic goals such as job security, increased wages and improved working conditions; goals that have been traditionally pursued through collective bargaining. These goals and the enterprise structure of unions are consistent with the economic activities of companies [12] and can thus be broadly classified as business unionism.

Cultural Islands

This form of unionism can be contrasted to social-democratic and revolutionary types of unions where unions seek a wider role in society or oppose antagonistic class interests. By adopting such a structure Japanese unions have been able to maintain a high degree of independence from the state and have not generally sought corporatist type arrangements from any of the major political parties. They have, by contrast, sought and encouraged cooperative arrangements with employers as part of their broader market-based strategies.

Most full-time, regular workers in a company are eligible to join the union and this includes front line supervisors and usually managers up to the level of subsection head.

Cultural Allies

Thus the typical union member in a Japanese enterprise union is a full-time male employee and the organizing policies of enterprise unions have served to protect this core group of male workers. Union officials are drawn almost exclusively from the membership, with some senior officials on leave from the company and working full-time for the union. The present day Rengo was formed from an amalgamation in of the private sector Rengo and unions belonging to three public sector peak union bodies.

Rengo itself was the product of a merger in of unions belonging to five private sector peak union bodies. Total unity has not been achieved, however, and two other smaller peak union bodies have emerged. The number of unions in Japan in stood at 59,, a decline of over 18 per cent from and 21 per cent from the record number of 74, unions that existed in At this time the total number of union members was 10,, which represented a decline in membership of 18 per cent from and 21 per cent from the record membership of 12,, in This represented a union density number of union members as a percentage of the total workforce of just over 18 per cent which is down significantly from the 25 per cent of workers who were members in and the peak density of Similarly, all three peak bodies have lost members in recent years [17].

The fall in union membership and density is graphically illustrated in the chart below. Declining Trade Union numbers and density, Source: www. Increases in non-regular and part-time workers, Source: OECD Economic Survey of Japan Japanese enterprise unions have traditionally placed strong reliance on collective bargaining at both the company and industry levels.

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Collective bargaining is an appropriate mechanism for this form of unionism as the key objectives of economic rewards and welfare benefits can be achieved by trading off aspects of work such as job control, work rigidities and the introduction of new work forms and technology. Underpinning this bargaining has been a tacit understanding that employment security was guaranteed. Collective bargaining in Japan over wages and other monetary conditions developed a unique form in the s.

Groups of unions would lodge their wage demands and if these were not met would simultaneously stage repeated, short industrial actions. This system became known as the spring wage offensive or 'shunto' and led to a system of industry and national level coordination of enterprise wages. Key unions would lead the bargaining and set standards that weaker unions could adopt.

The similarity of wage settlements across enterprises and industries demonstrated the influence of union federations and that the wage settlements were based on macro-economic conditions as much as enterprise considerations. During the s, with the bursting of the bubble and the economy experiencing very low growth rates and increasing global competition, wage settlements became more diverse and local enterprise considerations more important.

The Worst Internship Ever: Japan’s Labor Pains

By the lates the prolonged period of economic downturn led many employers and some unions to question the relevance of this multi-employer approach [26] and in Japanese unions were prepared to accept the end of 'shunto' as the major wage fixing mechanism. Companies had been expanding joint consultative arrangements such that by nearly four out of five unionized enterprises had such mechanisms in place. Joint consultation was further strengthened by the revised Labour Standards Law which introduced statutory management-worker committees for the revision of working hours.

Employers have, since about , also sought to align wage increases with business performance. While some employers have also attempted to extend performance criteria to monthly basic wages, it remains the case that this wage component remains strongly linked to age and length of service.