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A comparison of U.S. and Japanese management styles and unit effectiveness.
Abstract:
This paper reports of a comparative study of American and Japanese management styles in a conceptual framework consisting of six managerial dimensions: supervisory style, decision making, communication pattern, control mechanism, interdepartmental relationships, and paternalistic orientation. The findings indicate that U.S. and Japanese mangement styles differ significanly both in overall management styles and in each of the six dimensions. They also show that managerial perception of department (unit) effectiveness in each country differs significantly. Additionally, the paper discusses the implications of research findings for management theory and practice. (Reprinted by permission of the publisher.)

Subject:
Management (International aspects)
Corporations (Management)
Corporations, Japanese (Management)
Authors:
Culpan, Refik
Kucukemiroglu, Orsay
Pub Date:
01/01/1993
Publication:
Name: Management International Review Publisher: Gabler Verlag Audience: Trade Format: Magazine/Journal Subject: Business; Business, international Copyright: COPYRIGHT 1993 Gabler Verlag ISSN: 0938-8249
Issue:
Date: Jan, 1993 Source Volume: v33 Source Issue: n1
Geographic:
Geographic Scope: Japan
Accession Number:
14107132
Full Text:
* This paper reports of a comparative study of American and Japanese management styles in a conceptual framework consisting of six managerial dimensions: supervisory style, decision making, communication pattern, control mechanism, interdepartmental relationships, and paternalistic orientation.

* The findings indicate that U.S. and Japanese management styles differ significantly both in overall management styles and in each of the six dimensions. They also show that managerial perception of departmental (unit) effectiveness in each country differs significantly. Additionally, the paper discusses the implications of research findings for management theory and practice.

Key Results

* This study of American and Japanese management styles has identified the salient features of both systems. To understand and learn from different management systems, its model offers an effective tool for comparative studies; but for further research advances the present model has to be expanded or alternative models have to be developed.

Comparative management has received a lot of attention over the last two decades as global business has increased tremendously. Critics have claimed that different management styles account for the level of international competitiveness of firms (Cosier and Dalton 1986, Harber and Samson 1989, Peters and Waterman 1982). Because of the success of Japanese companies in world markets, researchers have paid a special attention to the Japanese management style (Hatvany and Pucik 1981, Koya and McMillan 1981). As a result, many scholars compared the Japanese management system with the American and European systems (Buckley and Mirza 1985, Ouchi 1981, Pascale and Athos 1981, Lincoln 1989).

In his popular book, Theory Z, Ouchi (1981) contrasts the principal characteristics of American and Japanese management. He identifies seven major characteristics of Japanese organizations: lifetime employment, slow evaluation and promotion of employees, non-specialized career paths, implicit control mechanism, collective decision making, collective responsibility, and wholistic concern (building a complete relationship between employer and employee, including concerning with employee's non-work, personal and family, matters). He asserts that these characteristics are not true of a typical American organization. In his later book, The M-Form Society, Ouchi (1984) elaborates on harmonious relationships in Japan among financial institutions, industrial organizations, labor, and government to develop industrial strategy. He argues that integrated planning at the societal level is responsible for Japanese success. Although Ouchi's Theory Z has become very popular, his research methodology has been criticized because of his small sample size and limited interviews and observations.

On the other hand, Pascale and Athos (1981) used the "seven S" model developed by the McKinsey Co., including the following seven components: superordinate goals, strategy, structure, systems (administrative), staff (the concern for having the right kind of people), skills (training and developing the people), and style (the manner in which management handles subordinates, peers, and superiors). They argue that Japanese companies are more effective because of their integration of these seven components and their concern for staff, skills, and, most importantly, style. They call these factors "soft S's" which have to do with human element. Pascale and Athos stress the importance of managing people as key resources and the importance of superordinate goals, sense of spirit, or company philosophy. They draw conclusions from a limited number of case studies and their approach is less theoretical and more didactic (Schein 1981).

From a human resources perspective, Hatvany and Pucik (1981) offer a model of Japanese management in which they define three interrelated strategies: (a) to develop an internal labor market securing a labor force of desired quality and to induce the employees to remain in the firm; (b) to articulate company philosophy based on concern for employee needs and cooperation and teamwork; and (c) to engage in intensive socialization. The authors assert that these general strategies are translated into specific management techniques including job rotation and slow promotion; evaluation of attributes and behavior; emphasis on work groups; open communication; consultative decision making; and concern for employee. Although they do not contrast American and Japanese managerial characteristics explicitly, they organizational theories developed in the West in their analysis of Japanese attributes. The authors also argue that the Japanese techniques can be adapted by firms in other countries.

From an organizational learning perspective (the process of handling information), Sullivan and Nonaka (1986) compare American and Japanese senior managers. They claim that Japanese managers handle more information and learn more about their organizations. "This greater commitment to an organizational learning perspective may be an important source of differences in the strategy-formulating behavior of Japanese and American executives" (1986, p. 128).

Both Hatvany and Pucik and Sullivan and Nonaka have taken a specific perspective to justify their models, which is a part of the management process, but does not embrace the total functioning of a managerial system.

The explanations given above imply that although the comparative management studies on the U.S. and Japan are abundant, a great deal of confusion or disagreement still exits on the nature and methodology of these studies. Some scholars even have questioned the superiority of Japanese system over American management (Sullivan 1983, Sethi et al. 1984). One major confusion stems from the lack of clearly defined domains or properties of a management system to use as a basis of comparison. A close review of various comparative studies suggests that in order to have a sound comparison of management patterns of different countries, fundamental dimensions of management systems should be identified first and contrasted later. To compare management systems across nations, a conceptual framework is needed.

Model for Management Style and Unit Effectiveness

The conceptual model of management style and unit effectiveness shown in Figure 1 consists of six principal dimensions by which a comparison of management systems can be made. These six dimensions are as follows: (1) supervision style: managerial behavior related to the subordinate's expectations that his effort would result in desired rewards, (2) decision-making: the process in which decisions are made within the unit and the extent to which employees contribute to or participate to managerial decisions, (3) communication: information flow within organizations and departments, and barriers to information flow, (4) control: mechanism used to check operations conducted and results achieved by the employees meeting the standards, (5) interdepartmental relationships: interactions and deals with other units, and (6) paternalistic orientation: supervisory concern for employees' non-work related matters. We elaborate on each of these dimensions and relate them to organization and management theory.

[CHART OMITTED]

1. Supervisory style refers to the type of interactions between supervisors and their subordinates. During the management process, supervisors usually act different ways and use different styles to relate to their subordinates. These different managerial and leadership styles are well documented in the early and contemporary management literature.

Among the pioneering theories, McGregor (1960) introduced Theory X characterized by close supervision versus Theory Y representing participative management style. In their contingency model of leadership, Fiedler and Chemers (1974) distinguished task-motivated versus relationship-motivated approaches. In his argument for different patterns of management, Likert (1961) recognized four primary systems of management: System 1, exploitive authoritative; System 2, benevolent authoritative, System 3, consultative; and System 4, participative, which he advocated highly.

Contemporary theories on management also concentrated heavily on supervisory and leadership forms. House and Mitchell (1974) elaborated on "pathgoal theory of leadership" in which a leader's effectiveness is tied to his or her impact on subordinates' motivation, ability perform effectively, and satisfaction. Furthermore, Bass (1985) dichotomized leadership approaches as either transactional or transformational. While the former follows path-goal theory quite closely, the latter requires motivating employees to do more than they originally expected to do.

2. Decision making refers to different approaches to across organizations and countries (Pascale 1978). Major differences can be observed in the areas as follows: long-range vs. short-range orientations (Ouchi 1981), emphasizing on results vs. processes, and using authoritarian vs. democratic approaches (Likert 1961). The literature on the Japanese decision making has consistently underlined the "ringi" system, a consensus-oriented decision making process (Pascale 1978, Rohlen 1974, Vogel 1979).

3. Communication pattern refers to the functions of organizational communication, including providing informational input to decisions; establishing tasks, duties, roles, responsibilities, and authority; achieving cooperation, and guiding action toward goals; instructing, developing, and changing; and providing feedback. Communication flow and barriers to effective communication flow in an organization define a key component of management (Lewis 1975). Pascale (1978) reports extensive face-to-face communication in Japanese companies.

4. Control mechanism refers to comparison of standards with outcomes. "Communication theory provides a basis for understanding how organizational effectiveness is obtained. Effectiveness appears to be a product of control processes that produce uniformity and coordinate effort behind goals" (Miner 1982, pp. 81--82). Although control is needed in organizations, strict control leads to structural patterns such as centralization and a tall hierarchy. In comparing American and Japanese management practices, Ouchi (1981) distinguishes between explicit and implicit control. American management sets specific, measurable performance targets, whereas Japanese managers rely on values embodied in a philosophy of management, governing organizational and individual behavior to accomplish objectives.

5. Interdepartmental relations describe the degree of interaction among departments within an organization. Accomplishing departmental objectives often requires various forms of inputs from others departments. McCann and Galbraith (1981) portray this phenomenon as follows:

"For example, a department depends on other departments for resources, work, or information, and the other departments depend upon that department for resources, work, or information. One's understanding of that department is enriched from the knowledge of its interactions with other departments" (p. 60).

Of course, the degree of interaction including necessary and voluntary types varies from one situation to another.

6. Paternalistic orientation means managers' concern with personal and family life of employees and providing social support for them. One of the distinguishing characteristics of Japanese management is its paternalistic nature. Ouchi (1981) calls it "wholistic concern for employees" as defined above. In other words, paternalistic orientation requires managers to assume social support roles in addition to their work-related roles for their employees. This particular dimension varies across nations; hence, it provides a useful measure to make cross-cultural comparisons.

The explanations given above show why all six dimensions are essential components of a management system. The model presented in this paper uses these dimensions for a comparative analysis.

The final component of the model, unit effectiveness is determined by management style as it represents the integrated functioning of the six dimensions. Unlike previous studies on organizational effectiveness, our model is concerned with departmental effectiveness for two simple reasons. First, the cumulative effect of individual departmental performance most likely influence overall organizational effectiveness. Second, from a practical point of view, each manager would know the operations of his or her department better than those of the total organization.

Hypotheses

Based on the above discussion and our conceptual model, three hypotheses are constructed as follows:

H1: Management styles as defined by six managerial dimensions of supervisory style, decision making, communication pattern, managerial control, interdepartmental relations, and paternalistic orientation differ significantly between the U.S. and Japan.

H2: The U.S. and Japanese managers consider each managerial dimension differently and emphasize different sets of managerial dimensions.

H3: American managerial perception of their unit effectiveness differs significantly from those of Japanese managers.

Method

Sample

Top and middle managers from American and Japanese manufacturing firms participated in the survey. For the U.S. firms, a sample of 200 manufacturing firms was randomly chosen from Directories of Manufacturers in New York, New Jersey, and Pennsylvania. Three questionnaires were mailed to each company. All firms are medium- and large-sized companies employing more than 100 employees. Two hundred twenty five responses were received from American managers (a 37.5% response rate). For the Japanese, a sample of 70 companies was selected randomly from Japan Company Handbook 1989. Four questionnaires were mailed to each Japanese company. The sample companies are again medium- and large-sized manufacturing firms. Sixty-five Japanese managers responded the survey (23.2% response rate).

Profiles of the respondents are presented in Table 1. American subjects averaged 45 years old and 16.5 years of education but had lower position and shorter tenure than Japanese managers. Japanese subjects averaged 42.5 years old and about 13 years of education.

[TABULAR DATA OMITTED]

Questionnaire

Data were collected through a mail survey consisting of three parts: Part I contained questions about the managers including age, education field, years of education, position, position tenure, firm tenure, and departmental membership.

Part II included questions regarding six dimensions of the models introduced above. Each managerial dimension is measured by the variables, as labeled in Appendix. The questions in Part I and II were asked with a Likert-type scale ranging from 1 to 9.

Part III contained a single question on departmental (unit) effectiveness. Unit effectiveness was measured in terms of managerial perception of overall unit performance. Managers were asked to judge how effective their units were in relative to all other units they have known whether they supervised them or not.

The original English questionnaire was translated into Japanese by one Japanese professor of management and one Japanese manager. Then, it was translated back into English by a Japanese who did not have access the original to compare and ensure the meaning of questionnaire items.

Procedure and Research Design

To measure managerial dimensions, variables representing each managerial dimension as listed in Appendix were combined and their mean values were taken into consideration. A multivariate analysis of variance (MANOVA) model was used to test the effect of country of origin on managers' views of the managerial dimensions. In the model, the dependent variable is managerial dimensions consisting of supervision style, decision making, communication pattern, control mechanism, interdepartmental relations, and paternalistic orientation. Managers' country of origin (U.S. or Japan) is used as the factor variable. When there are p dependent variables, k parameters for each dependent variable, and n observations, the general statistical model is:

Y = X[beta] + e Y is n x k, X is n x k, [beta] is k x p, and e is n x p where

Y = dependent variable (managerial dimensions)

X = countries (the U.S. and Japan)

[beta] = model parameters

e = error term

In addition, a t-test was conducted to compare the managerial perceptions of unit effectiveness in two countries.

Results

The results of MANOVA as presented in Table 2 show that the managerial styles in the U.S. and Japan differ significantly with F = 111.37 at p < 0.0001 as predicted in H1. Table 2 also indicates that each managerial dimension differs significantly between the U.S. and Japan. In other words, American managers view each managerial dimension differently than do the Japanese.

Table 2. Summary of MANOVA for Managers' Views on Managerial Dimensions

in USA and Japan

Moreover, American managers emphasize the managerial dimensions consisting of supervisory style, decision making, and control mechanism; whereas Japanese managers stress such managerial dimensions as communication pattern, interdepartmental relations, and paternalistic orientation as presented in Table 3 and Figure 2. These findings confirm H2.

[CHART OMITTED]

Table 3. Mean Responses and Standard Deviations of the USA and Japanese

Managers' Views on Managerial Dimensions

The results of the t-test with t = 3.03 at p < 0.0033 as shown in Table 4 confirms the hypothesized relationship in H3. Table 4 also indicates that Japanese managers consider their organizational units more effective than American managers do. A greater standard deviation of the American responses imply that their perceptions of unit effectiveness vary more than those of Japanese managers.

Table 4. Comparison of American and Japanese Unit Effectiveness

Our model demonstrated that the managerial styles in the U.S. and Japan are opposite to each other in all six managerial dimensions. It also suggests that the differential application of managerial dimensions can be offered as an explanation for differential unit effectiveness. The empirical results of our model are consistent with earlier theories and findings on the comparison of the U.S. and Japanese management (Ouchi 1981, Pascale 1978, and Hatvany and Pucik 1981). The American management pattern is mostly characterized by supervisory style stressing more Theory X type, task-oriented, and transactional leadership methods. In their decision making, American managers emphasize concrete results rather than the process. Additionally, they make decisions in a less participative fashion than do Japanese. Individual responsibility and top-down decision making appear to be common features of the american system. Furthermore, the U.S. management favors a control mechanism based on close supervision and an explicit formal control pattern.

On the other hand, one of the salient characteristics of Japanese management is that communication in Japanese organizations appears to be open and mostly face-to-face thereby minimizing barriers to effective information flow. Moreover, interdepartmental interactions are intensive in Japanese organizations. Japanese manager are attentive to interdepartmental dependency and cooperation. Furthermore, paternalistic orientation in Japan is well-instituted as managers are concerned for the employees' non-work matters. Japanese managers also view their units as more effective in comparison to American managers because probably open communication and ringi system in Japan, in particular, improve operations.

Any comparative management analysis like ours usually leads to the question of how to transfer effective models and techniques from one environment to another. Indeed, the Japanese successes in Western markets have stimulated Western companies to examine and adopt Japanese managerial practices. However, a debate on the transferability of the Japanese management style to the Western countries still continues. Some experts claim that Japanese techniques cannot be copied because they depend on Japanese culture, while others believe that these techniques can be transferred and those proponents even give some successful examples (Johnson 1988). Although management is always culture-bound to some extent, certain management practices are less culture-bound than others. Thus, some techniques might be nurtured in different environments as long as they are applied properly. This argument suggests that culture-bound techniques are not transferable unless a conductive cultural environment is created. For example, the Japanese ringi system and paternalistic orientation would probably not work at a typical U.S. company where values of individualism and privacy prevail. On the other hand, some management practices as less culture-bound can be transplanted in another country. Practical examples of such successful transplantations are quality circles and just-in-time management adopted from Japan by American and European companies. These techniques characterize the decision making and probably interdepartmental relations dimensions respectively in our model.

Our findings suggest that to modify the American managerial system, not transplantations but major transformations should be made in the areas of supervisory/leadership style, decision making, and control mechanism. Indeed, all three components are interrelated but for the purpose of better illustration, we will elaborate separately on each. Supervisory/leadership style needs to be transformed from an authoritarian approach to a democratic one. Failure of American corporations to reflect the overwhelming democratic values in American society is a paradox. Some frustrations among American employees at workplace probably stem from this paradox. Hence, managers are highly recommended to adopt transformational leadership virtues (Bass 1985, Tichy and Ulrich 1984).

In decision making, American managers need to consider both decision results and process. Effective decisions will more likely be made in a process that is, if not participative at least consultative (Likert 1961). Such a process requires that managers should not "... decide until others who will be affected have had sufficient time to offer their views, feel they have been fairly heard, and are willing to support the decision even though they may not feel it's the best one" (Rohlen 1974, p. 308). A movement toward employee involvement and participation in management decision making will foster employee commitment and morale as well as unit performance (Hatvany and Pucik 1986).

In the control process, it is important to diagnose the various causes of unacceptable deviations and then to take the corrective action. U.S. managers should allow their subordinates to identify the causes of the problem and apply corrective actions themselves because those people carry out the tasks. When employees suspect or are aware that something is wrong with their performance, they should be able to take necessary steps to search for and to fix the problem. We do not think an implicit control mechanism is suitable for American employees who request clearly defined goals and standards. Hence, an effective control technique for American organizations might entail incorporation of employee involvement with explicit control. This is why probably Management by Objectives (Drucker 1954, Carroll and Tosi 1973) and goal-setting techniques (Locke and Latham 1984) have reached some success in the U.S.

In all three managerial processes described above, the key to the success seems to be the management style encouraging employee involvement. Two major means of achieving employee involvement are open communication and paternalistic orientation. Open communication unlike a paternalistic approach is less culture-bound and can be easily employed by the U.S. organizations. Even a paternalistic approach, if modified to accommodate American cultural values, can be used by American managers to enhance employee commitment and involvement. Paternalism in the American sense implies more concern for employees' welfare and satisfaction.

While Western companies are adopting some Japanese managerial techniques, Japanese organizations are undergoing some changes because of the development of high technologies and internationalization (Misawa 1987). For example, Mroczkowski and Hanaoka (1989) assert that

"as they gradually redesigned the employment and reward system in their

firms, Japanese managers are trying to maintain the advantages of group

harmony, employee loyalty, and cooperation while eliminating the burdens of

employment hypertrophy and enhancing flexibility by shifting more of the

risk to a greater proportion of workers" (p. 39). Exposure of Japanese corporations to Western culture and managerial practices will entail several changes in their management approaches. Such changes will probably manifest themselves in the areas of supervisory style, decision making, and paternalistic orientation. Specific examples of these changes may include introduction of individualism and merit system and loosening life-time employment.

Such exchanges of managerial practices between nations do not mean that differences in management styles will disappear one day. As long as we have different cultures, management systems as a by-product of culture will manifest unique characteristics in given country. Therefore, we need further studies to examine similarities and differences in managerial styles across nations. Nath (1988) cites five convincing reasons for studying comparative management: living in an interdependent world, its universal nature, sharpening our understanding, widening the knowledge base, and appreciating our own culture and environment. However, we need sound models and methodologies to distinguish characteristics of different systems and displaying similarities and differences among them.

Conclusion

This paper reviews the literature comparing U.S. and Japanese management systems and identifies the underlying theoretical dimensions in organization and management literature for a conceptual model for comparative analysis. Then it provides a model of management styles and unit effectiveness. The model consists of six managerial dimensions, namely, supervisory style, decision making, communication pattern, control mechanism, interdepartmental relations, and paternalistic orientation. It also proposes that overall management style determines organizational or unit effectiveness.

The results of an empirical test of the model show that American management style is different from the Japanese. The variability between two countries lies among the all six managerial dimensions as well. While American managers emphasize supervisory style, decision making, and control mechanism, the Japanese are more concerned with communication process, interdepartmental relations, and paternalistic approach.

Our study of American and Japanese management styles has identified the salient features of both systems, our conceptual model offers an effective tool for comparative studies, but advances in the present model or development of alternative models is needed for further research.

Appendix

Supervisory Style: Amount of discretion given to subordinates Degree of delegation of authority to employees Soliciting for worker inputs Freedom of employees to schedule their own work Democratic supervision Only supervisor handling work problems Decisions and work problems delayed in supervisor's absence Supervisory back-up for his/her employees Supervisor's sacrifice for his/her employees Amount of direction given from top Close supervision

Decision Making: Soliciting for workers' inputs Tackling unusual work problems Trying innovative methods and products Number of suggestions from the unit members Wasting time and effort by incorrect estimates Accepting unpopular projects Initiating improvements Decision delegation to the lowest level Consensus decision making Employee participation in decision making Amount of supervisory direction Individual decision making Employee freedom to select their own course of actions

Communication Pattern: Supervisory awareness of unit performance meeting standards Free flow of information Supervisors awareness of things happening within unit Complains reaching top management Employee unawareness of changes in policies and directives Communication are blocked

Control Mechanism: Managers being on top everything Emphasizing on production as a goal Freedom of workers to schedule their own activities Democratic supervision Relying the unit without checking Following-ups and checking in goal realization Close supervision

Interdepartmental Relations: Providing assistance to other units for favors Making trades and deals with other units Bargaining with other units Frictions with other units Coordination with other units Criticized by other units for being uncooperative Getting into conflict with other units

Paternalistic Orientation: Involving in family matters of employees Helping employees with non-work related matters

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Source                       F Ratio  D.F.   p
Countries                    111.37   6,283  0.0001
                             Analysis of Individual Variables
Source                       F Ratio  D.F.   p       [R.sup.2]
Supervision style            169.15   1,288  0.0001  0.370
Decision making               53.08   1,288  0.0001  0.156
Communication pattern        348.11   1,288  0.0001  0.547
Interdepartmental relations  119.71   1,288  0.0001  0.293
Paternalistic orientation     37.84   1,288  0.0001  0.116
Control mechanism             35.83   1,288  0.0001  0.110


Dimensions                       USA             Japan
                                 Mean (S.D.)     (Mean S.D.)
1. Supervision style             5.823 (0.661)   4.603 (0.684)
2. Decision making               5.628 (0.703)   4.948 (0.500)
3. Communication pattern         4.824 (0.843)   7.380 (1.330)
4. Interdepartmental relations   4.500 (1.000)    6.035 (0.969)
5. Paternalistic orientation     4.080 (1.640)   5.400 (1.050)
6. Control mechanism             5.533 (0.677)   4.961 (0.687)


USA           Japan
                     Mean   S.D.   Mean   S.D.   t      p
Unit effectiveness   6.09   2.06   6.92   1.38   3.03   0.033
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