Contrasting with China and Japan, the occidental society evolves separately with separate influence spheres: The church was always taking care of the faith and the spiritual life of the men meanwhile the government and the commercial institutions had the role of providing the to the human beings to take care of the existence. The corporation started to growth acting as a dominant organization inside a society in this century. The western world was starting to leader the rest of the world, there was no surprise that we all know as modern management was a western invention.
The new professionals have the same challenges as before in time: How to efficiently administrate the organization, how to delegate responsibilities, and how to gratify and motivate the employees. The main difference between Western and Eastern organizations is that the last ones use the organizational structure and formal systems to attack these issues. In general, comparing with Western organizations, Eastern organization pays more attention on social and spiritual subjects. The ideology takes persons to achieve organizational goals, but mainly and invariably, these are based on sanctions.
Today, the most important tasks like the significance of punctuality, sense of belonging, sanctions against thievery, the importance of performance at work, and the ways to solve conflicts and issues are taking by society before their members take part of a company’s task force. Most of the times eastern societies are representatively big, and most of the time matters like public, private and spiritual are so integrated that the companies take control of these type of tasks as a whole in human being. Company takes another role rater to just being transactions between work and capital.
The book gives us the advice to take the best practices of the Japanese administration and to adopt it to our environment, questioning some western “truths” and some management abilities. To explain the 7 S Framework, the book describes the actions of Konosuke Matsushita, founder of Panasonic, over the management of National and other companies. To start describing the Strategy, Matsushita broke all the existing rules about convention of company names, by naming his company National instead of Matsushita. He changed the way of product commercialization by selling it directly to the stores, without intermediaries, lowering costs.
Matsushita gave importance to market shares, high volumes of production generates saving on production cost allowing the company to transmit this reduced prices to their customers. The third element of the strategy was the followership, in which Matsushita didn’t create or invent products, instead, the company’s research and development imitates it but the big difference was that the company offered the same product with an attractive improvement. His best concept of research and development was to take the product, imitate it to the maximum detail and to find a better and more attractive way to offer it to the competitor.
Describing organizational structure, he fixed the goal of maintain the thing small and entrepreneurial. To start growing, he organized the company into divisions. When he saw that the manager’s skill were improving, he figured out that they were preparing to be general administrators of a growing company, but the issue were that all the managers were making this progress in their abilities independent and separately. For this, he centralizes the controllership’s functions, the personnel functions, he institutionalize a central bank and the centralized all the training.
Regarding Systems, Matsushita was the pioneer of the effective financial systems, and he copied the planning system from Phillips, the Dutch electronics manufacturer. The planning system consisted on that every 6 months, the managers of each division had to deliver 3 plans: The first one was a plan to 5 years, in which he stipulates all the changes that the organization or division will suffer regarding on alterations of new technologies and the environment. The second plan was a plan of to 2 years, in which stipulates how the division will translate the long term strategy in the new plant’s capacity and the new products.
The third plan was the “Program for the Next Sixth Months operation period”. In this plan, the division explained month to month the sales projections, productions, incomes, inventories, accounts receivable, personnel requirements, quality control targets and capital investments. In questions of style, Matsushita was distinguee for his “hands on” approach. Matsushita understands that a manager has to effectively communicate to people down the line, telling them what he cares about. His key success has been the ability to get to the employees seven levels down and motivate him to energically pursue the organization’s objective.
Another future of Matsushita‘s style was the pragmatic approach to a conflict. As in real life, there will be adjustments and its means to pull together rather to push apart. About spiritual values, Matsushita philosophy provided a basis of meaning beyond production. Matsushita was the first company in Japan to have a song and a code of values. This song was singed every day at 8:00 am al across Japan. For Matsushita, It was unthinkable that work, which occupies at least half of the day, should deny its powerful role. The firm has a inescapable responsibilities to help their employee’s themselves.
The basic business principles were: “To recognize our responsibilities as industrialists, to foster progress, to promote general welfare of society, and to devote ourselves to the further development of world culture” The employee’s creed was: “Progress and development can be realized only through the combined effort and cooperation of each member of Our Company. Each of us, therefore, shall keep this idea constantly in mind as we devote ourselves to the c continuous improvement of our company”. The seven “spiritual” values were: 1. National Service Through Industry 2. Fairness 3. Harmony and Cooperation 4. Struggle for Betterment 5.
Courtesy and Humility 6. Adjustment and assimilation 7. Gratitude. This values foster consistent expectations among employees in a work force continent to continent spread. Regarding Staff, Matsushita experience started with the basics of business. Every employee, whether they were engineers, accountants, or salesman, began with spending 6 months selling or working directly in a retail outlet. Also, each spends time performing routine tasks on a assembly line. The distinctiveness of the firm is that everyone that stays come to be a part of a culture with common understandings and shared values that helped to facilitate the business needs.
Employees weren’t view as participating in management, but their opinions are sought. About skills, it is difficult in a Japanese organization to separate the people from the company. The most salient skills of the founder were the versatility; sometimes he was intensely hands on and sometimes distant. Matsushita seems to combine the gifts of many men. The firm’s skills emerged from the consistent ways in which the parts of the organization all join together. Its organizational structure is reinforced by its system; these gain significant support from the Matsushita style, spiritual values, and staffing policies.
Human values were promoted with efficiency. Following this and through extraordinary inter consistency between strategy and skills, it is able to replicate the Matsushita model. The American way is reflected in a chapter that resembles all the managerial methods of Harold S. Geneen, which was president of International Telephone and Telegraph for over two decades. At first sight, the managerial methods implemented are good, but they were created to work only in an environment with the same variables.
The comparison between Matsushita and ITT wasn’t perfect but gives us a clear perspective of how things can be done perfectly as Japans in our cultural way. Geneen’s behavior and tension he created produced and intense competitive pressures which drove the executives persistently. His method of management was traditional. There were important and interrelated elements in Geneen’s management approach where he played a central role in his management design. The unshakeable facts, which are something hard and indisputable; at minimum it is the firsthand opinion of an expert, based on the most current information.
The second part revolved around a design of checks and balances using staff as parallel and independent source of information from the line and permitting overlapping delegations of authority among and between line and staff functions. The third part of Geneen’s approach was the use of large structured meetings as the focal point of his decision-making process. The fourth part was to impose of a variety of rewards and pressures to ensure his total command. Geneen created tensions between line and staff.
In contrast with Matsushita, division managers were seen to lead a challenging and precarious existence, while line staff half of the time exaggerated problems to make they look good under the boss eyes. One product manager traced the source of the problem between line and staff to the bonus system, because it represented 30% or more of the salary. The problem was that putting staff on individual performance bonuses resulted in the justification of their existence. They were always trying to prove what they had done in order to look good in the reports. This created an adversary relationship with people on the line.
The reward system drove that kind of behavior. Geneen meetings were interrogatory, even adversarial,. The general manager’s report had already been written and everyone assumed to have studied it, but the meetings were held to identify new problems. Part of what made Geneen’s system to work was the fear. Fear of being caught uninformed and being humiliated in meetings and of being punished. It it’s often said that positive motivations are more powerful than negative ones. Geneens personal style can also be described as attentive, committed, determined, pragmatic, and forceful and disciplined.
His managerial approach had powerful effects on others, and the labels they used to characterize these patterns in his behaviors, and thus his values and beliefs, were often charged with emotion. Seven elements were used to understand better both Matsushita and ITT. Strategy belongs to a firm’s plan of action that causes it to allocate it scarce resources over time to get from where it it’s to where it wants to go. Structure refers to the way a firm is organized, whether it’s decentralized or centralized, whether it emphasizes line or staff. Structure refers on how boxes are arranged.
System refers to how information moves around within the organization. Staff belongs not to staff in the line/staff senses, but to demographic characteristics of the people who live in an organization. Skills are those things which the organization and its key personnel do particularly well. Style refers to the patterns of behavior of the top executive and senior management team. Super ordinate Goals or shared values include spiritual and significant meanings and shared values of the people within an organization and refers to the overarching purposes to which an organization and its members dedicate themselves.