3 CAPITALIST MARKET ECONOMIES: JAPAN AND TAIWAN
It is interesting to compare and contrast Japan and Taiwan: each of them can
be identified as an island economy although their population base is different
in scale; both of them experienced the domination of a feudalist agrarian eco-
nomy and have transformed to state-led capitalism and industrialisation, and
more recently to a more open capitalist market economy; and Japan colonised
Taiwan for the first half of the twentieth century. Hence, similarities as well as
differences can be found, as we shall see.
JapanIn Japan, three ‘pillars’ have been identified as the foundation of the tradi-
tional Japanese HRM model, namely long-term employment (i.e. life-time
employment), seniority-based wage system (wage increases are determined by
the age and length of service of workers within the company) and enterprise
labour unions (Sano, 1995). The management pattern in post-war Japan has
been defined as paternalist in which employers relate to employees as parents
and the company is seen as a ‘family’.
From the cultural point of view, these Japanese characteristics of HRM are
rooted in tradition. The cultural background of the society plays a significant
role in the formation of company culture, expressions such as mura shakai(a
village society), shudan shugi (group-orientation), onjo shugi (paternalism),
nenko joretsu (seniority-base), danson johi(male domination), tate shakai(verti-
cal society or hierarchy) are used as part of organisational culture (Sano, 1995:
25). In the traditional Japanese management style, people are important and
enterprise costs are not thought about all that much. It is the vision that domi-
nates Japanese organisational culture with the focus on their people. In return,
a highly committed workforce strengthens the unity of the organisation. The
outcome here could reasonably be expected to be lower turnover and absen-
teeism and higher productivity.
However, such neo-Confucian virtual-oriented HRM practices did not
come automatically or without struggle in post-war Japan (see Gordon, 2001).
In the 1950s and early 1960s, the labour movement was very active and
through the struggle of labour unions and compromise with the government
and employers, the so-called ‘three pillars’ of the Japanese HRM model
(employment security, seniority wage systems, and enterprise labour unions)
were established (Mackerras, 1992: 373–376). Not only were these fundamental
issues of Japanese HRM gradually developed, but other related aspects with
HRM in East Asia 201