American vs. Japanese Styles of Down Sizing

Mroczkowski, T., & Hanaoka, M. (1997). Effective right sizing strategies in Japan  

This article compares the American quick fix approach in down sizing to Japanese restructuring that uses their 12 stage approach.  It begins by describing the "American way" of down sizing that is now used more as an employment strategy rather than being based mostly on immediate market conditions.  In typical American restructuring, layoffs are more commonly causing longer work days for those who are retained, instead of lowering pay or giving less work time to a greater amount of workers, which is favored strongly by America's work force.  In short, Americans tend to cut people rather than pay or hours.  One big effect of such quick fix tactics of down sizing is decreased employee morale and negative impact on their attitudes.  The mistake being made is that many managers are focused on short term quick fixes instead of long term growth and creativity. 

In American companies, the growing best practices approach in down sizing consists of holding off on layoffs unless absolutely necessary and if they are unavoidable, they are manages "offering assistance to those who will leave as well as those who remain".  Many big companies in the U.S. are increasingly using this approach which is deemed as much more successful than ways that have typically been used in the past. 

 The Japanese, on the other hand, who are restructuring on a greater scale than ever before, have a much different idea about restructuring than most American managers.  They believe in putting efforts into reducing time and pay in order to postpone employee separations.  Essentially, in Japan, layoffs occur in a small amount of cases as alternative measures continue to be sufficient.  The Japanese approach includes laying off a limited amount of people, thus allowing only a moderate rise in unemployment.  Koyochosei is the term they use to describe their "methods of matching the number of staff actually employed to what is economically required". 
Their first stage methods of Koychosei use the mildest methods and avoid causing employees much anxiety.  This includes reducing hours worked by putting restrictions on overtime, reducing the number of hours and days worked overall and making internal transfers. 
  The intermediate stage involves reducing recruitment, hiring of permanent employees, reduction or elimination of part time work and part time employees.  It also includes not renewing contracts and possible temporary leave of some employees. 
The final stage methods used in dire times involve transferring and actual dismissal of staff, often under early retirement conditions and finally, in crisis times, voluntary and compulsory redundancies. 

 Similarities occur between the American better practices approach that is increasingly being used by American managers and the Japanese style of restructuring.  While the U.S. is considered to have some of the most competitive companies in the world, this is due in part to a borrowing of some Japanese management practices.  By avoiding sudden quick fix plans that are that are not well planned and executed involving the reduction of employees, many negative outcomes of down sizing can also be avoided.  However, by embracing gradualism and meticulous planning in restructuring, the Japanese and a growing number of American companies are being known for more successful results in their down sizing. 

While the adoption of certain Japanese practices had benefited many U.S. companies, the best practices approach is not recommended to include the same job preservation plan used by the Japanese since American companies need to tailor their practices to our own culture and companies.  Additionally, Japanese firms can also benefit from methods used in the best practices approach of U.S. firms, especially in a time where corporate Japan is presently determined to be overstaffed and in need of increased and direr restructuring.  Overall then, Japan and the U.S. can both benefit from borrowing aspects from each other's restructuring strategies, although they will never be identical because of the need to cater to their own cultures. 

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