Question

3 SECURING THE WORKFORCE Diversity management in X-tech, a Japanese organisation

This case is intended to be used as a basis for class discussion rather than as an illustration of the effective or ineffective handling of an administrative situation. The name of the company is disguised.

INTRODUCTION

In light of demographic concerns, in 2012, the Japanese government initiated an effort to change the work environment in order to secure the workforce of the future. Japan is world renowned for its high-quality “lean” production and management efficiency. However, economic stagnation, the challenges of an aging population, a record-low birth rate and a poor score in OECD statistics on female participation in the workforce led the Japanese government to focus on the economic benefits of diversity in corporate Japan.

In this case, we present the story of Mieko Suzuki, a general manager who worked in a Japanese subsidiaiy of an American multinational company active in the information technology industry. As a working woman, she knew the Japanese organisation first-hand and had successfully navigated the road to becoming a manager in a male-dominated industry. In 2012, she was approached by the subsidiary company president, who asked her to become a ‘diversity ambassador’, and to join a new initiative launched by the executive management group to foster diversity and inclusion in the workplace. Mieko accepted the offer in the belief that her experiences could help others in similar situations while also helping the company achieve its goals. However, was it even possible to change an organisation known for its focus on harmony and group processes, an organisation in which the norms of Japanese society greatly influenced employment conditions?

NEW FOCUS ON DIVERSITY MANAGEMENT -WOMENOMICS IN JAPAN

After World War II, Japan managed to rebuild its devastated industries to become the third-largest economy in the world after the US and China. The unprecedented growth, which came to be known as the ‘post-war economic miracle’, lasted until the early 1990s when the economy was hit by the collapse of the asset-price bubble (Gordon, 2003). The economy struggled to recover for nearly two decades, and it was further strained by the 2008 global financial crisis.

To reinvigorate economic growth, the administration, under the leadership of Prime Minister Shinzo Abe, introduced a number of economic policies in 2012. The policies were collectively known as the three arrows of ‘Abenomics* (The Economist, 2014). The first two arrows, which were implemented during the first few weeks of the government’s term, referred to monetary and fiscal policy, respectively. The third arrow was a growth strategy in which women were to play a central role in getting Japan out of economic stagnation and the recession - ‘womenomics’ (The Economist, 2014). In 2010, the Cabinet approved the Third Basic Plan for Gender Equality (see Exhibit 7). The plan included the goal of increasing the number of women in leadership positions to 30% by 2020 (Gender Equality Bureau Cabinet Office, 2010).

The female participation rate in the labour force was low compared to that of males. According to the US investment bank Goldman Sachs (2014), closing the gender employment gap could increase Japan’s GDP by 13%. Nevertheless, to realize the advantages of an increase in the number of women in the workforce, Japanese companies would have to restructure their organisations. Traditionally,women left the workforce upon marriage in order to handle child rearing and household chores, as the long working hours associated with lifetime employment and the seniority principle were not consistent with motherhood (BBC, 2013).

AN AGEING POPULATION

Japan is an island chain located in eastern Asia between the northern Pacific Ocean and the Sea of Japan. It lies east of the Korean peninsula. Japan consists of approximately 377,915 square miles, which is comparable in size to Germany or Romania (NationMaster, 2013).

According to the 2010 national census, the total population was 128,057,352, of which men and women accounted for 48.7% and 51.3%, respectively (Statistics Bureau of Japan, 2011). The population size has been declining since around 2005. A report compiled with the government’s co- operation in 2012 indicated that the population will decline from 127 million to about 87 million by 2060. Of the latter number, almost 40% are expected to be 65 or older (The Economist, 2014).

In an interview with The Japan Times (2014), Hidenori Sakanaka, head of Japan’s Immigration Policy Institute, stated that “Global investors have a consistent policy of not investing in a country with a shrinking working and consumer population”. As a result, Sakanaka expected the gross domestic product to shrink in line with the decline in population. In order to sustain GDP, he suggested that either the fertility rates had to increase or immigration would have to be deregulated radically (The Japan Times, 2014).

EQUAL OPPORTUNITIES FOR MEN AND WOMEN IN JAPAN

Japan’s Labour Standard Act of 1947 mandated equal treatment in employment between women and men with respect to wages. Apart from the legally binding measures, the Act also provided employers with a number of moral guidelines:
Working conditions shall be those that meet the needs of workers who live lives worthy of human beings” and “The standards for working conditions fixed by this Act are minimum standards. Accordingly, parties to labour relationships shall not reduce working conditions with these standards as an excuse and, instead, should endeavour to raise the working conditions (Labor Standard Act, 1947).
To address discrimination beyond wage considerations, the Equal Employment Opportunity Law was enacted in 1986. The aim of this regulation was to prohibit gender discrimination with respect to recruitment, hiring, promotion, training and job assignments (Edwards, 1988):
The basic principle of this law is that workers be enabled to engage in a full working life without discrimination based on gender, with due respect for the maternity of female workers.

If any of the conditions were violated, the employee could force the employer into mediation (Starich, 2007). Despite the fact that women had equal opportunities by law, only 49% participated in the labour force in 2013, compared to 70% of men (The World Bank, 2013). Many women left the workplace upon marriage to raise children and returned when they became older, which led to a graphical depiction of participation in the labour force as an M-curve.

In a 2012 report by the Benesse Educational Research & Development Institute,1 almost 60% of women surveyed in the Tokyo metro area said that they had given up on returning to work after childbirth because of a lack of childcare options (Forbes, 2014). According to the Tokyo Metropolitan Government's own statistics, 20,000 children in the city were awaiting a space in a day­care centre (BBC, 2013).

K-TECH BACKGROUND ANB ORGANISATIONAL CHANGE

The Japanese subsidiary in which Mieko worked was established in the mid-1980s. While the US- based parent company was known globally for its diversity initiatives, the Japanese division was lagged behind in terms of employing women and foreigners. In 2012, the subsidiary had around 2,000 employees, of which 95% were Japanese. The average age of subsidiary employees was 40 years. The Japanese subsidiary did not report gender breakdown, but X-tech had approximately 70% male and 30% female employees worldwide.2 As a general manager, Mieko’s task was to connect her team of 500 engineers to customers with regards to project contracts and subsequent support.

Im not an amazing engineer, but I understand their discussions. Sometimes, the engineer's language is really difficult or impossible for executives or sales people to understand. I am really good at translating what engineers are saying into sales language

. In 2012, the subsidiary’s president asked Mieko to join a team with five other people established to focus on diversity and inclusion in the workplace. The team’s assignment was to improve conditions in terms of: 1) recruitment, 2) employee development, 3) retention, 4) work-group community and 5) marketing.

Prior to joining X-tech, Mieko had served as a regional manager for the Japanese subsidiary of another multinational corporation, Global Business Solutions (GBS). GBS, which was in the tech industry, was known for its diversity initiatives. It was there that she learned how to promote diversity:

I am lucky that I was at GBS when it started to promote women inside the company. They started in the late 1990s, which was early for Japan.

1 Benesse Educational Research & Development Institute is an affiliate of daycare and education-services provider Benesse Corporation. 2 X-tech granted unlimited access to interviews.

However, statistics, strategy and policy papers concerning the firm’s diversity goals and objectives were not made available.

Diversity was also important at X-tech, but it only became a top priority after the business was stable:

The business takes a much higher priority. However, we have been successful in that regard- we won the top subsidiary award, which is given to the subsidiary with the most growth. It is an internal international award. Now we are very stable, and we are very confident about our business performance.

The next step was to become recognised as a company that cared about diversity, and the subsidiary president expected to see clear results from the initiative - an increased proportion of female employees, a higher number of female managers and a greater percentage of women in higher management. He also wanted the culture to become more inclusive in general, such that every person with a unique style was respected and accepted, and every employee could demonstrate his or her capabilities to the fullest.

WORK-LIFE BALANCE

In response to the challenge posed by the president, Mieko looked to her own team to identify any obstacles to creating an inclusive work place. Her team sold software solutions to a wide variety of customers, from global companies to public institutions and private users. For large contracts, engineers would go to the site to work with the customer, and much of the work related to subsequent support. Engineers took customers’ calls every day, listened to their troubles and attempted to identify customer trends.

The system served as a great source of information on ways to improve the products and create more value for the customer. However, Mieko considered the possibility that there might be drawbacks:

There are few (female] managers and female employees because this is a client-facing organisation that tends to be characterised by long working hours.

Mieko herself worked around 50 hours per week, usually going into the office at 9:00 a.m. and almost always leaving around 7:30 p.m. In addition, she would have late-night conference calls with her colleagues in the US every other week. On the weekends, she would wrap up her week’s work and prepare for the coming week:

I do not have time to go through my mail on weekdays. I have unread emails, so I need to clean up my mailbox on either Saturday or Sunday. Therefore, I work three to four hours to clean up the mailbox and get ready for the next week.

For many Japanese employees, long working hours were part of the corporate culture. However, during her years as a manager, Mieko had noticed a change in attitude among the younger employees:

Japanesecompanies want their employees to stay long as they can. the company is like a family, so they have to share as much time as possible. We used to believe that staying was a sign of loyalty, but that attitide is changing. The younger people think that the work hours are too long and that their productivity per hour is more important han staying.

The corporate work culture was highly demanding on the individual. Some women were unable to stay at work until 10:00 p.m. or even midnight. Mieko would have to consider how this affected the advancement of women. She wanted women to say: "Wow, this is a place I really want to work!”. However, at the time, she knew that was unlikely.

WOMEN AND LEADERSHIP

In her meetings with clients, Mieko rarely met other women: I meet [women] as the first-line manager, but never in executive meetings. They are so few.

She had grown accustomed to being in the minority, but she wondered why she was the only woman at meetings. What set her apart from other women? Around 20 years previously, at the age of 43, she had decided to become a professional leader. She defined a leader as the person who achieves the required business result or performance using the given team and resources - regardless of other factors in the organisation:

I heard an interesting person’s presentation and decided that I wanted to be a professional leader. Then I started studying communication, negotiation, marketing and so on. I also attended leadership training.

The training, which was external, had lasted for two years and included courses in consulting, coaching and counselling. Furthermore, Mieko was educated in performance and self-expression, including such aspects as verbal and non-verbal communication, gesture, posture, and tone of voice. Mieko did not believe that leadership abilities were gender related. Rather, the outcomes depended on personal style and accomplishments. However, in order to figure out why more women did not become managers, Mieko and her team developed an internal questionnaire, from which they concluded that there was not enough information available to employees about advancement. Some women indicated that they wanted to become managers, but they did not believe that they were competent enough. Others explained that their superiors never asked them to become managers. Finally, some women said that they wanted to become managers but not in the current company, which they felt was too demanding:

The female employee does not have access to the knowledge that there are assistance or training courses available. They simply do not know.

IMMIGRATION AND OTHER DIVERSITY ISSUES

Despite calls to ease immigration laws, the Japanese government had been reluctant to discuss immigration policy (Fortune, 2013). Mieko knew that female employment was not the only area in need of improvement, but she explained it as a question of priorities:

The reason is that [gender issues] are the most problematic area. They are the top priority because we are so far behind in terms of numbers, ratios and so forth. So, that is the first priority. At the same time, if the company or the organisation is a good place for women to work, that will also create good conditions for retirement help for both women and men who need elderly care. So this is just an entry point.

Mieko was well aware of issues in other areas. She believed that, after gender, the next step would be a focus on foreigners and people with various sexual orientations. There were also some ethnic issues, such as the Burakumin, Ainu and Ryukyu3, but these were relatively minor. Notably, however, both sexual orientation and minority-related issues were viewed as taboo in Japan:

Women are really the entry point. If we fix this issue, other issues will be halfway resolved. If people think in a different way, they will accept broader styles, preferences and thinking. I hope that kind of society is coming soon.

DIVERSITY FROM THE PERSPECTIVE OF INTERNATIONAL EMPLOYEES IN THE ORGANISATION

According to one of Mieko’s co-workers, Pascal, a 40-year old western European male, diversity was a vast, ‘diverse’ discussion. He had previously served as a regional manager for Europe, the Balkan countries and North Africa in corporate X-tech.

We are all diverse because human beings are different Even if you take two white males, they are diverse by nature.

According to this colleague, the perception of diversity depended on how one ‘set the bar’. He strongly believed that if you were genuine, open, honest and respectful of people, then diversity would become a way of life. To do so, one needed to accept people for whom they are, what they do and how they work. This colleague would listen to people, and he paid attention to who they were and helped them in their roles. Diversity was neither a problem nor a topic. Rather, it was his way of embracing people. This colleague viewed diversity as the most important ingredient for peace. It was about how one brought people in and ensured that every kind of person with any kind of background felt cared for, listened to and welcomed. He spent much of his time making sure that people felt welcome in his team:

I want people to feel that they work in a harmonious environment where it is okay to speak up. It is okay to deliver the best of yourself because you feel supported. Harmony makes the diversity topic a non-topic.

However, to his Japanese co-workers, harmony also meant that putting the group first. This view made them more self-critical. The Japanese subsidiary posted performance equal to or better than that of the Chinese and Korean subsidiaries, but it had consistently lower ratings in self-evaluations:

For [the Japanese], the number one criterion is how hard you have worked. That is number one. This means that if you felt that you did not contribute enough in terms of hours, you would devaluate yourself. The second criterion is the quality of your work. The Japanese provide the highest quality ever seen, and they are ready to pay for it.

Another international co-worker, Sa’id, (37), who was originally from India, had previously worked in diverse workplaces in the US and Europe. He found Japan to be a male-dominated society in which women were slowly ‘moving up’. However, by his standard, Japan was behind the US and Europe. Women who wanted to build a career had the challenge of managing the home, kids, cooking and working. Diversity, as a concept, was even used in relation to work styles and ways of thinking. The Japanese were educated as “us being a single cohesive chain”, and anyone who was different was excluded. In this employee’s view, the acceptance of different mindsets had to start in early education, but the Japanese education system did not accept differences. In the corporate world, discussions about diversity mainly concerned the hiring of women, and this employee did not encounter discussions about sexuality in either Japan or in Asia in general. He suggested that the company’s official rhetoric was that “it had to be diverse. It had to be global”. In his view, Asia had a long way to go to embrace the concept However, Japan did not discriminate against certain groups of people in the same way he had experienced as an Asian working in the US:

If someone is different, the Japanese do not take action to change that person. In the US, there are triggers of discrimination. If you are not like *everyone else1 in the US, they will try to change you. There are so many problems there concerning race and what should be the standard.

Most Japanese he had encountered were refreshingly honest about the fact that he was an international employee, making comments such as: Foreigners... they are too big. They will break my house! As he explained: Most Japanese expect you to behave in a Japanese way. However, they do not discriminate if you do not.

TIMING - DIVERSITY AS A BUSINESS CASE

X-tech was powerful in terms of talent, hiring and processing. Within a decade, the company had expended a significant amount of effort to acquire talent, with a focus on people from India and China. X-tech had struggled in the previous 10-15 years to become a leader in innovation. There was room for improvement and the people-related direction seemed to be right. If X-tech could integrate and sustain these values, it could become a better, more successful company. Diversity strategies and implementation were to be a major part of this movement:

The biggest challenge for us is really how smart we are going to be when we define what can and cannot be done. Simplifying globalisation and diversity can also have negative consequences for our business. Oversimplification could become backtracking if we do not make the right decisions. Both are long processes.

FUTURE CHALLENGES - PROMOTING DIVERSITY MANAGEMENT

Diversity management with a focus on women was becoming increasingly important in Japan. The government was pushing for more women in leadership positions. In the private sector, it was becoming a battle for talent. Mieko knew that it would be a challenge to overcome the traditional gender roles that were so deeply ingrained in Japanese society. Would it even be possible? Was there going to be resistance to change in the organization? What tools would she need to complete the task?

Question 3
Identify and present the leadership and motivational models and theories discussed during coursework that can address the scope of managing diversity to enable peak performance at X-tech.

Answer 1

The leadership and motivational models and theories that can address the scope of managing diversity to enable peak performance at X-tech are as follows:

Motivational theory

Alderfer’s ERG Theory- Alderfer actually reduces the needs to the three level for the Maslow hierarchy needs model. These are existence need, Relatedness needs and Growth needs. These are the main important and basic need model for any employee in the organization. Fist the basic needs has been satisfied then the employee may perform well in the company.

McClelland’s Theory of Needs- This theory explains that the once the traits are acquired in early stages of work remains unchanged. The motivation is not hierarchical. This theory explains the following needs among the employees are need of achievement, need of affiliation and need of power. These are the needs which one employee should have with the team members and within their selves. This would help to know the inner qualities of the employee which help in the effective participation.

Leadership theories

House’s Path-Goal Theory-The House path- Goal Theory states that the most important activity of the leader is that they should know the specific path or goal and make the coordination between the team so as to match the organizational goal and the personal goals. This theory says that there are different kinds of leadership such as Directive behavior, Supportive behavior, participative behavior and achievement-oriented behavior. As per the situation the leader should behave with the employees. This is a kind of good approach to for the enhancing the performance of the company.

Participative Leadership- This theory shows that the participation is the stepping stone to success. Public have the different levels of the qualities and so they have the different levels to participation too. The participator contributes to the following such as Motivation, Quality and acceptance. So, when the diverse participation had been done then the company employees looks for the new innovations or idea generations. This would benefit the company.