There has been great interest worldwide in the phenomenal success of Japanese enterprises in securing such a significant proportion of world trade. In Britain, also an island nation, this interest has more than been awakened by the considerable investment in the British economy by major Japanese firms. The latter have introduced a number of Japanese management practices into their UK-based organisations, some of which have led directly to efficiency savings over earlier practices (e.g. development of core workers supported by part-time/ casual (non-core) workers; insistence on non-specialised career paths and job flexibility for core workers; team-working seen as essential; single status working conditions; a respect for the company culture; and meticulous attention paid to production planning and quality). Other practices, such as the employment of a central core of workers with guarantees of secure employment, and the attention paid to employee selection and training, are seen as less effective in that they can reduce flexibility and/ or raise labour costs.
Some of the above practices have been incorporated into the personnel policies of Japanese companies in Britain, and they appear to have worked successfully. No employment guarantees were given, but unions were recognised, single status applied, and thorough training provided, including key worker visits to Japan to the parent company. A particularly significant advantage for employers in the British context was the acceptance of job flexibility after training.
Japanese firms investing in Britain have undoubtedly been able to take competitive advantage of a situation in which entry barriers have been reduced due to:
1. Government policy of attracting foreign investment in the UK economy
2. High unemployment in the areas selected for investment
3. Availability of enterprise grants from the government
4. Diminished trade union power due to changes in the law and high unemployment. The investing firms have nevertheless won the support of the British workforce, who have demonstrated their ability to collaborate positively with the Japanese styles of management to produce quality products efficiently.
The pay-off for the Japanese companies who have invested in Britain is that they have been able to provide themselves with regional manufacturing bases from which to launch their products into Europe at a time when that continent is steadily becoming one vast market. Part of the price of that advantage has to be paid for in accepting a gradually higher proportion of British and/or EU supplied parts in finished manufactured goods. Toyota, for example, not only produces body shells and assembles cars at its Derbyshire factory (an investment of over £800m), but also supplies engines for one of its major models from another factory in Deeside. Increasingly, other parts are also being supplied from the UK or European source. Manufacturers who can claim that ’80% of our leading models are built with UK/ European-made engines and parts’ are clearly heading for a competitive advantage over those whose finished products still rely heavily on parts made in Japan. Ultimately, car manufacturers, such as Honda, Nissan and Toyota hope to be thought of as British as Fords or Vauxhalls (both American-owned companies).