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Closing case: Panasonic and Japan’s Changing Culture
After World War II Panasonic established a work culture that promised employees they would be taken care of by the company from “cradle to the grave.” Panasonic provided them with a wide range of benefits including cheap housing, guaranteed lifetime employment, seniority-based pay systems, and generous retirement bonuses. In return, Panasonic expected, and got, loyalty and hard work from its employees. However, culture does not stay constant. The generation born after 1964 lacked the same commitment to traditional Japanese values as their parents. They grew up in a world where Western ideas were beginning to make themselves felt, and where the possibilities seemed greater. They did not want to be tied to a company for life. In the 1990’s these cultural changes lead the economy into a slump. Japanese companies had no choice but to change their ways of doing business and leave traditions behind. Panasonic started rewarding their employees by their performance instead of seniority and they slowly went away with the lifetime job guaranteed motivator.
Case Discussion Questions
1.What were the triggers of cultural change in Japan during the 1990s? How is cultural change starting to affect traditional values in Japan?
2.How might Japan’s changing culture influence the way Japanese businesses operate in the future? What are the potential implications of such changes for the Japanese economy?
3.How did traditional Japanese culture benefit Panasonic during the 1950s–1980s? Did traditional values become more of a liability during the 1990s and early 2000s? How so?
4.What is Panasonic trying to achieve with human resource changes it has announced? What are the impediments to successfully implementing these changes? What are the implications for Panasonic if (a) the changes are made quickly or (b) it takes years or even decades to fully implement the changes?
5.What does the Panasonic case teach you about the relationship between societal culture and business success?
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