Japan’s Work Culture Gets a Needed Covid-19 Shock
(Bloomberg Opinion) - Japan's corporate culture is stuck in a bad place. But the coronavirus pandemic may only have given him the impetus to get out of the trap.
From the 1960s to the 1980s, the country developed a business system that worked well. Managers, not shareholders, controlled companies, enabled long-term planning and investment, kept employment levels high, and promoted economic equality. The workers were hired on the assumption that they would work in a company throughout their careers, which gave their employer an incentive to spend a lot of resources on their training. And everyone worked very long.
This system has been under stress since the 1990s. High-performing senior executives who have been promoted in the ranks have often been unwilling or unable to change business models or organizational structures in response to changes in technology, consumer demand, and commerce. Long hours left the workers exhausted and made it difficult for them to take care of their children. Managers who have become accustomed to the number of hours of workers sitting at their desks often cannot or do not want to examine how much work is actually being done. Lifelong employment became a trap; Workers were unable to change employers, which reduced the flow of knowledge and skills between companies and hindered the mobility of ambitious young people. And the club loyalty culture in the workplace created a major obstacle to gender equality.
The Japanese government is aware of the problem and has attacked it in a number of ways - by discouraging long hours, pushing companies to adopt a shareholder value business model, and promoting gender equality. While some progress has been made in corporate governance and the recruitment of women, the deeply rooted culture of long, unproductive working hours and management models that focus on maximizing inputs rather than outputs has proven to be very difficult to crack. It's easy to tell people to go home earlier, but that doesn't automatically teach managers how to evaluate productivity.
But the shock of the corona virus can offer the Japanese company exactly the solution it needs. Japan has not been hit hard by the virus for reasons that are still poorly understood. But the country took some social distancing measures in April and early May, one of which was to encourage companies to sometimes let employees work from home.
Many did not need nudging. For example, Dentsu, an advertising company known to work one employee to death in 2017, pulled 5,000 employees out of the market after an infection. Japanese companies that manufacture laptops and other teleworking tools saw an increase in orders, while companies that develop teleworking software do good business.
Working from home can promote a culture of productivity in several ways. First, it can make managers measure work not by the number of hours an employee logs on a chair, but by the number of discrete tasks the employee does in a given time. This in turn encourages managers to think carefully about which goals are actually important in assigning tasks. Second, working from home forces workers to think about how they spend their time. At home, there is often the option of doing housework or childcare, forcing workers to plan their working hours. This flexibility has the added benefit of making it easier for parents to take care of children while working full-time, which can help increase the country's chronically low birth rate. After all, working from home saves time when commuting.
At least that's the theory. So far, the results have been encouraging - at least anecdotal. After GMO Internet Inc. sent its employees home earlier than other companies, its chief executive officer was so pleased with the results that he even questioned the need for an office. More than 60% of Japanese workers say they plan to continue working from home after the pandemic, and several large electronics and finance companies have said some remote work will continue for the foreseeable future. The country's largest business organization, Keidanren, proposed making the teleworking guidelines permanent.
The shift will not be easy for Japan. It will take some time for workers and managers to learn to adapt to the new performance-based work style. It is no surprise that a significant percentage of Japanese workers say that working from home has reduced their efficiency. However, the long-term benefits should outweigh the short-term costs.
The Japanese government and organizations like Keidanren can make the transition easier. One step is to disseminate information through software and hardware tools that facilitate video conferencing, data security, and other important elements of remote work. Tax relief for companies with remote working options is another option. And large media organizations like the national broadcaster NHK can broadcast educational programs and documentaries that help people understand and accept the switch to remote work, or even entertainment programs that show remote work as a social norm.
Japan's outdated, inefficient corporate culture is one of the country's main obstacles to regaining lost competitiveness, increasing productivity and achieving a better work-life balance. Remote work could be the shock that Japan's corporate culture needs.
This column does not necessarily reflect the opinion of the editors or Bloomberg LP and its owners.
Noah Smith is a columnist in the Bloomberg Opinion. He was an assistant professor of finance at Stony Brook University and blogs at Noahpinion.
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