Lifetime employment is one of the most controversial and distinctive aspects of Japanese management. But in the Risutora (restructuring) must remove from the economic downturn in Asia in the late 1990s, two million or more jobs, driving triggered from 4.8 to 8 percent unemployment. Why have lifetime employment to be abandoned? The practice makes for a rigid labor market, shortages of cash (like Nissan), the drastic cuts in R & D, Corporate dysfunctional politics and run difficulties with trade partners … Read more »

Lifetime employment is one of the most controversial and distinctive aspects of Japanese management. But in the Risutora (restructuring) must remove from the economic downturn in Asia in the late 1990s, two million or more jobs, driving triggered from 4.8 to 8 percent unemployment. Why have lifetime employment to be abandoned? The practice makes for a rigid labor market, shortages of cash (like Nissan) that cause drastic cuts in R & D, Corporate dysfunctional politics, and difficulties with trading partners in the international economy. Even so-called workers’ loyalty is an illusion, and what outsiders as labor-management harmony is no longer seen as a lack of labor mobility. Mobility is further undermined by the Japanese emphasis on training people in specific organizational practices, in a variety of jobs, but as a versatile and marketable skills. Japan’s economy needs to give more mobility in their labor market. If Japan can not develop a more fluid labor market, the recession will last for many more years.
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from
Nakato Hirakubo
Source: Business Horizons
6 pages.
Publication Date: Nov 15, 1999. Prod #: BH039-PDF-ENG
End of Lifetime Employment in Japan HBR case solution