Japan’s Salaryman Culture: Consequences of Corporate Governance
If you’ve ever taken an International Business course, it will come to no surprise that Japan is the quintessential high-context society, and the country’s business culture is no stranger to this type of culture. The classic office worker in Japan is often referred to as a “salaryman.” Salarymen are often characterized by the cycle of working overtime, drinking with colleagues after work, being sleep deprived, and repeating the next day. In other words, kind of mundane and easily miserable.
Yet, if you look at corporate governance practices in Japan, we notice an emphasis on the stakeholders over shareholders. Stakeholders are an aggregate of shareholders, customers, and employees. So what happened to valuing employees just as much as shareholders? Well, it depends on whether you value the job, or work-life balance more.
First, let us explore some indicative characteristics of salarymen, including their group mentality, high social-context, and most notably, long working hours with inadequate pay. From here, we can then draw parallels and contrasting points between salarymen and the upper echelons of corporate managers to suggest improvements in this working culture, starting from the top. After all, true change in the daily life of salarymen can only begin with their bosses.
First, the idea of group prevails in Japanese work culture. This is great when it comes to teamwork, and providing consensus in decision-making, but it also leads to a lack of individualism. As one author quotes, East Asian cultures tend to have a “Confucian hierarchy, where the group is sacred and leaders are seen as benevolent.” This group mentality is also evident in the Japanese mantra ho-ren-so, which roughly translates to report-contact-consult. This means that workers must always keep their superiors informed of anything they are working on and take a manager’s words into the highest consideration in every situation. Because of the need for the approval of every little thing, Japanese businesses are also known to “take a long time to get anything done.” At best, we call this detail-orientation or pursuit of perfection. At worst, it is representative of the lack of individual, a reluctance to change in the business and a yield to seniority.
Next, we examine Japan’s high social context. What this means for the average salaryman is indirect communication at work and compulsory drinking with colleagues after work. As Kopps refers to as a source of “frustration” for many, instead of directly saying “no”, Japanese colleagues prefer to use “subtle negative signals” in lieu of confronting their peers with negative information. As one Reddit user explains his experience with managing employees, saying “hai, hai,” which means “yes”, is completely unrelated to whether the person understood what you were saying at all. But saying no directly can be seen as too rude and harsh. The salarymen drinking culture is also a result of valuing relationships and the need to keep your supervisor happy in and out of work if you’re looking to be promoted at all. Business in high-context societies is highly dependent on interpersonal relationships and trust.
Finally, we look at salarymen overtime and low pay for such overtime. This is a topic widely satarized and commented on online. The comic to the left highlights this phenomenon, suggesting that the man (the salaryman) is subject to the bunny’s (the company) policies of long hours and low pay because the company will make sure he has no choice but to accept such conditions. We can interpret this to mean that labor laws are existent, but in reality, not well enforced. We see this widespread sentiment of dissatisfaction towards low-pay and long hours through personal accounts on social media platforms. As a Reddit user states (below), leaving at 10:30 pm is considered “normal”. Previously, his former employer had offered no overtime pay despite working past the last train schedule and though his current employer does not insist on consistent overtime, overtime is still unpaid.
Another Reddit post (below) suggests that foreigners seem to receive special treatment on this and that Japanese coworkers get the lower end of the stick, abiding by stricter overtime expectations and still getting paid less than their foreign colleagues.
This suggests that Japanese employers and managers are well aware of the unusually low compensation and long hours that their subordinates are subject to, considering they treat foreigners differently.
So why are salarymen working so hard? The video below, by CNBC International, offers an interesting theory, suggesting that economic stagnation is perhaps pressuring the average salaryman to work harder.
But taking a closer look at the statistics cited in the video, Japan’s labor productivity is the lowest amongst its G-7 counterparts. In other words, the Japanese salaryman isn’t exactly motivated by the greater good of the country to work harder to increase the country’s economic output.
So why else would they work so hard? My best guess is that they’re working for the rewards promised for the upper echelons of management in these corporations.
Studies of corporate governance in Japan generally point to a persistence of Japanese-style corporate governance in Japan, most evident in board structures. Corporate boards, in the Anglo-American sense, serve the purpose of supervising the executive management team and are comprised largely of independent directors. In other words, board directors, for the most part, aren’t acquainted with the day-to-day operations of the company. But in Japanese corporations, board directors are often synonymous with executive managers. Essentially, there is little to zero external supervision. Even auditors of the board are seldom independent. This is a result of policies like lifetime employment and internal promotions, which emphasize seniority and experience. The general belief is that no outsiders could understand or run the business better than these managers, who are the creme de la creme of the salarymen, risen from the lowest ranks of the corporate ladder.
The average salaryman is a casualty of this structure. Though management promises job security, other aspects such as work-life balance, promotions, and fair compensation are of much less priority. The overly-managed work-life of the salaryman is contrasted with that of his executive management. The lack of supervision at the top reflects a need for strict discipline and structure beginning at the bottom. Coupled with a cultural context that emphasizes relationships, it is clear why Japanese salarymen are the way they are.
That is not to say things should remain the way they are. It is certainly concerning that Japanese salarymen are also known as corporate zombies, sleeping anywhere and at any time possible. But change is unlikely to take a bottom-up approach. The most plausible form of change that can instill lasting effects on employees is a change from the top. Corporate boards should include more independent directors to supervise the operating activities and policies of the executive management. Perhaps this is a necessary first step to acknowledging that seniority is not indicative of experience or skill and that overtime for the sake of overtime should not be the salaryman’s sole way to success.
