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Case Study Analysis

International Business-372
Sec: 11

Submitted To
Kashfah Mahmud Khan Chowdhury
Lecturer, North South University

Submitted By
Rifat Shahriar
Areez Nahar
Syeda Nabila Arefin
Salehin Shahriar
Joyanta Dhar
Md. Nakibur Rahman

131 0937 630


132 0088 030
131 0163 030
122 0711 030
141 0259 030
131 0841 030

Date of Submission: 14/10/2015


Answer to the Question 1:
Triggers of the cultural change in Japan during the 1990s:

a) Progressive Youth Seeking New Opportunities: The generation born after 1964 grew up in a
world that was richer and heavily dominated by Western ideas .So, they began to feel that there
were lot of possibilities in front of them unlike their elders.
b) Lack of Age-Old Traditional Values: During 1990s, the younger generation lacked the same
commitment to traditional Japanese values, like- strong group identification, reciprocal
obligations, and loyalty to the company, as their parents.
Effect: As the generation in the 1990s, did not want to be tied to a company for life, to be a
salary man, Japanese economy entered a prolonged economic slump. As the time went on, one
after another Japanese companies were forced to change their traditional ways of doing business.
Gradually, troubled companies starred to lay off older workers, effectively abandoning lifetime
employment guarantees. Noticing that, younger people decided that loyalty to a company might
not be reciprocated. Thus, the traditional culture of doing business and perception of loyal,
hardworking salary-man were replaced by movement toward individualism among workers.
They adapted the western culture where the new generation was freer, believes in low
uncertainty avoidance and individualistic as well.
Answer to the Question 2:
The "Confucian Dynamism" characteristic of Japanese management will eventually change,
permitting employees opportunities for various types of employment contracts in which they
could select greater salary to give up company housing and seniority benefits. It is most likely
that seniority based benefits will be replaced by performance based benefits. This may have a
strong impact on their business performance, productivity and individual rewards/incentives.
As we've learnt from the case that, following this new strategy Matshutia, by 2004 was making
profits after significant losses in 2002 and reaching break even in 2003. New growth drivers,
such as sales of DVD equipment, certainly helped, but so did the cultural and organizational
changes that enabled the company to better exploit these new growth.

Answer to the Question 3:

The traditional Japanese culture firmly believes in Confucian values including obligation to the
workplace, strong loyalty and group identification, hard work, and belief in the greater good of
the company.
Although during 1950's to 1980's these pre-dominant traditional values helped Japan to become a
strong economy, they became more of a burden in the 1990s and early 2000s when the economy
confronted a crisis and the "cradle to the grave" concept was not feasible anymore. As a result,
many firms were forced to shut down or lay off their loyal workers.
Answer to the Question 4:
Due to the economic crisis in Japan in the 90s, Matsushita changed the pay scheme from
seniority to performance and they starting believing in employee democratization, encourage
individuality and were seeking younger employees who were ambitious, aggressive, and who
thinks rational and logical.
The main impediment was to cutoff old employees as a result 1300 jobs were cutoff and 30
factories were shut down.
Implications for Matsushita if changes were made:
a) Quickly: the employees may not understand the new system and may refuse to work.
b) It takes years or decades: the business cannot succeed before the changes are accepted.

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