Dewey, Danielle M.
ECON 3145.01
Panasonic Case
25 January 2013
Dr. Savitske
1.
The post war generation in Japan grew up in a world that was richer, with more Western ideas and greater possibilities. These are firm influences to the cultural change in Japan.
This younger generation didn’t want a stagnant career; there was adventure to be had.
When Japan was hit with an economic slump, this younger generation saw the first waves of layoffs. This made many in the post war generation realize that loyalty to the company was no longer guaranteed to be reciprocated.
2.
The cultural changes being exhibited in Japan could see the Japanese economy continuing to become more westernized. Most Americans see western business practice as “the norm”, it is slowly becoming more commonplace in the Japanese business world.
Potentially this could see an endangerment and possible extinction of the traditional values associated with Japanese culture. The Japanese economy would have more of an employment market similar to western nations.
3.
Traditional Japanese culture, heavily influenced by Confucianism, has strong values that crossover into the workforce. In the 1950s-1980s at Panasonic the employees were well taken care of from the time of initial hire until after retirement, essentially until death.
During the 1990s when Japan was hit with an economic slump it was simply not cost effective to continue the same practices towards the employees.
4.
Panasonic is trying to implement the popular western business model. Pay bonuses to managers based on transparent performance rewards, you work hard, you reap the reward, if you don’t work hard, you don’t get to sit by and collect. Also for the regular level employees, offering choices for the pay package will benefit Panasonic in the long run. While employees can choose to forgo certain benefits for a higher starting salary, as the generations all those subsidies and retirements forgone should positively affect the profits. Some impediments to these changes are that much of the management comes from the older, more traditional generation. When given the three compensation packages, only 3 percent chose the most western model. The middle one is similar to

American military compensation. As far as the closing of 27 plants and lay off 15000 employees, roughly 7500 in Japan. If the changes are made too quickly, Panasonic gambles losing the loyalty that it still retains with some of the older generation. Though, on the flipside, profits would probably rise as quickly as the changes are implemented.
However if the changes take years or even decades, it is likely that the older generation would not even be a concern anymore, however the bottom line is likely to suffer.
5.
The Panasonic case is an excellent exhibit of culture influencing business practice. It shows that it is a reality and that it absolutely must be taken into consideration. In a time of increasing globalization, a meeting between different cultures is becoming much more commonplace. To be successful in an international marketplace, you have to respect and consider cultural traditions. When considering these aspects globalization, it is important to strategize on how to meld and blend the most successful business model with the local cultures and traditions.