Quality Management in Central and Eastern Europe: Learning from the Japanese

Overview

Japan’s quality movement has been described by a number of researchers including Hitomi (1985), Flood (1993), Juran (1999), Cole (2004), Pecht and Boulton (2005), Fisher (2009), and so on. Nevertheless, it seems that in Central and Eastern Europe (*especially in Eastern Europe), its importance has been severely neglected. After almost five decades of communism, we quickly jumped on the waves of democracy by implementing the so-called shock therapy propagated by Anglo-Saxon known and unknown experts. Mass privatization, dissolvement of state conglomerates, withdrawal of state subsidies, etc. led to nothing more, but a complete crash of many of the Central and Eastern European economies with very few exceptions (i.e. Hungary).

            Take my motherland – Bulgaria, for example. Today, we lay our focus on the services sector, where we think we possess a great number of competitive advantages, but we have to face the fact that the customer service we render is of inferior quality, our resorts have become mere concrete jungles, and above all, we suffer from severe lack of experts and specialists in almost every sector of the economy. Furthermore, with one of the fastest aging populations in the world and prevalent and continuous brain-drain that started in the early 1990s of the last century (Fontaine, 1996), we are left to be proud of nothing more, but our unique nature – beautiful sandy beaches and snowy mountains. And as we keep our focus on the importance of the services sector and the tourism and hospitality management industry in particular, we have completely forgotten that once, we used to be an economic powerhouse that excelled in a number of industries – from agriculture and food processing to computer hardware development and space engineering.

            Unfortunately, this is not just the case of Bulgaria. Other countries in the region including Romania, Serbia, and Macedonia are in a similar state, and it seems that no matter how many governments with different ideologies change, all of them persistently continue to ignore the importance of quality. A century ago the Japanese were not any different either: in fact, Japanese products were of inferior quality (Trevor, 1986; Flood, 1993; Ohno, 2006), maybe of even worse quality than those that were manufactured in Central and Eastern Europe. In the late ‘30s and early ‘40s of the twentieth century, product quality in Japan was far away from being a national priority (Kobayashi, 1986). The end of World War II, however, marked a turning point in the development of the Japanese economy. The leaders of the “Country of the Rising Sun”, driven by patriotism and desire for change for the better, focused their efforts on developing Japan’s ability to withstand foreign competition. The core of their approach required the immediate rationalization of management and elevation of technology, which was ultimately to yield the manufacturing of high quality products at low cost (Ohno, 2006). The Japanese knew that manufacturing is of imperative importance in creating the wealth of a nation (Hitomi, 1992). Hence, with some help from the Americans, in 1970 – almost twenty-five years after the war, the Japanese products became the world standard for quality, and Japan became the world second largest economy after the U.S. This has not changed since then: Japan continues to excel in every aspect of manufacturing ‘quality’. Today, Japanese products stand for reliability, outstanding performance, trendy design, and Japanese scientific management is well-established and has drawn significant attention among both developing and developed countries. This is precisely why the Japanese have managed to achieve a tremendous growth in the competitive power of their exports (Cole, 2004).

The true reasons behind Japan’s post-war success

In the early years of the last century, the situation was very different. In fact, towards the end of WWII, it would have been difficult to predict, let alone imagine the current prosperity of Japan. Certainly, during the Edo and Meiji periods, Japan had already made some important achievements towards industrialization and modernization, yet it was only after WWII, when the quality revolution and the following economic growth in Japan began. Indeed, thanks to foreign experts, and more precisely, Americans, in the field of quality control such as Deming, Juran and Feigenbaum, today’s Japanese quality management practices and production techniques represent the pinnacle of the quality movement. Nevertheless, we cannot argue with the fact that these new practices were the result of a unique mix between American ideas and Japanese traditions and approaches (Hopper, 1985).

            [Translative Adaptation] Since early days, the Japanese approach was to absorb foreign knowledge and technologies to a point, which would allow for the Japanese to become better than their teachers, and this can be clearly seen in the case of the yunyu boatsu (import substitution) policy from the Meiji period. It is just that Japan understood modernization not as the mere acceptance of Western civilization, but as an opportunity to carefully select the traits of the Western World that would prove beneficial (this is called ‘translative adaptation’ – a term coincided by Keiji Maegawa). This is exactly what makes Japan unique and very probably why the country was so successful in improving product quality and creating new approaches such as Total Quality Management (TQM) that later on became the corner stone of the global quality movement – approaches that were based on American doctrines, but interpreted in a Japanese fashion.

Japan today is very different from Japan in the past, but regardless of the external shocks that every country absorbs throughout history, the Japanese managed to retain their identity, and today the Japanese society can be described as a multi-layered one. What is worth noting though is the fact that the Japanese have become extremely skillful at absorbing a great number of conflicting elements and using them interchangeably depending on the situation (Ohno, 2006). Moreover, they have been very selective, especially in the case of Western business approaches. As Pudelko and Mendenhall (2007) assert, based on their interviews with managers from Nippon Denso: they are well aware of management techniques which are frequently used by their American rivals, but largely reject them as being too short-term oriented.

[Human Factor] Certainly, the main driver for quality improvement in Japan was a special situation and a special need as described by Sarasohn. The U.S. government had decided to rebuild the Japanese economy (the situation) by starting the process from scratch (the need) (Fisher, 2009).  And even if are to argue that what Sarasohn perceived as the situation was in fact the need and vice versa, the astonishing achievements of the Japanese in improving quality would not have been possible without the existence of true leaders that commanded a great deal of authority and yet, were driven by the humane. Without these qualities, Sarasohn, Protzman, Deming and their followers and comrades would not have rendered useful services to the Japanese nation.

The afore-mentioned individuals worked with newly appointed managers with no managerial experience to create a culture that revolved around the importance of quality. To build such a culture though, top management support was needed and Sarasohn, Protzman, and Deming were aware of that. Hence, Sarasohn described quality control as not merely something related to product manufacturing or incoming inspection, but a guiding state of mind, devotion and dedication (Fisher, 2009). Besides the American quality gurus, there were also those from Japanese akin such as Ichiro Ishikawa, Dr. Kaoru Ishikawa, Koji Kobayashi, Taiichi Ohno, Shigoe Shingo, Soichiro Honda, etc. who made the pursuit of improved product quality possible.

            [Government Support] As we previously noted, government support played a vital role in the economic growth and the quality movement in Japan. Since early Edo days, the Japanese authorities took responsibility and great initiative to support the country’s manufacturing industries. This policy somewhat changed during the Meiji period, but WWII provided a good excuse for the shift back to the relational and interventionist system. As Ohno (2006) asserts, protectionism played a pivotal role in the pursuit of heavy industrialization. On top of that, a great number of organizations, both governmental and non-governmental ones were established. Take for example the Union of Japanese Scientists and Engineers (JUSE). It was established in 1946 with the aim to promote quality control in Japan, but somehow in the last almost seven decades few countries have considered the enormous influence of such independent bodies as JUSE. Even Britain – the mother of the Industrial Revolution – has overlooked its importance (Trevor, 1986), whereas former communist states such as Bulgaria have never considered building a similar institution, it seems. Further, in 1958 Japan had already a body responsible for export inspection and later on, for process certification – Japan Management Institute (JMI, which was renamed to Japan Quality Association in 1993). The list goes on – Japanese Industrial and Vocational Training Association (JIVTA) – the important training affiliate of the Nikkeiren (Japanese Federation of Employers’ Associations); Japan Management Association (JMA) – the promoter of the Zero Defect movement; etc.

[Samurai-style Dedication] The arrival of American engineers such as Sarasohn, Protzman, and Deming has certainly been a major factor for the evolution of quality in Japan, yet we must also mention the dedication on the Japanese side, for without the latter one, the “Japanese Miracle” would not have been possible. Some might oppose the afore-mentioned conclusion, but the equivalent of CCS (Civil Communications Section) seminars was already available in the U.S. and in fact in terms of availability, these teachings were nowhere more available than in the U.S. itself, and as Hopper (1985) asserts, if good pieces of advice were the only ingredient for improving quality and productivity, then the Americans would now have been the best manufacturer of quality in the world. Finally, Japan’s success is maybe, even if to a tiny degree, related to their unique culture, for as Inoue from Sumitomo Electric Industries asserts, in the field of human relations, the Japanese were not really assisted by SCAP (Supreme Commander of the Allied Forces). In fact, the sources of today’s world famous Japanese management practices are Japanese culture (Hopper, 1985).

            Indeed, having already spent more than half a decade here, some sort of samurai-style dedication can be sensed in every corner of Japan, I think: from the little kids to the elderly Japanese, and from the shop floor workers to the top managers, everyone seems to be dedicated to mastering to perfection the things they do.

[A culture dedicated to continuous improvement – Bushido] A great number of experts on quality management (Imai, 1986; Trevor, 1986, Flood, 1993) believe that Japan’s success in manufacturing quality has nothing to do with cultural factors, and I have been a strong supporter of this statement. Yet, the deeper I look into the reasons for Japan’s economic success, the more convinced I became that maybe, we – the disclaimers of Japan’s unique cultural traits – might be wrong. It is just that Japanese culture has always been one seeking continuous improvement. Since the early days of the samurai and the establishment of Bushido (the way of the warrior), Japanese people, it seems, have always had this thirst for “kaizen” (continuous improvement). This is clearly visible in the case of the quality movement: from check-sheets and histograms to quality circles, etc. Overall, the belief that there should be unending improvement is deeply ingrained in the Japanese mentality. As an old Japanese saying goes, if a man has not been seen for three days, his friends should take a good look at him to see what changes have befallen him (Imai, 1986).

            [Training and Education] The evolution of quality management in Japan would not have been possible without the presence of advanced, tailor-made educational system. For instance, Japan’s finest graduates took and still take notable interest in engineering unlike their Western counterparts. This in fact how Japan became a country of manufacturing things (Ohno, 2006). Moreover, since the Edo period the Japanese government has been continuously investing in education, thereby creating world class universities such as Tokyo University, Hitotsubashi Univeristy, Tohoku University, etc., where individuals gain valuable knowledge and skills necessary to lead the “Country of the Rising Sun” toward continuous economic growth and social prosperity.

On the internal or company side, Japanese companies have always been more of social communities than purely economic entities. In most Japanese firms, human resources are considered to be the most important company asset (Hatvany and Pucik, 1981). Extremely close attention is giving to hiring people: as most Japanese HR managers assert, it is extremely important for the new comers to be aligned with the company culture (moderate views and a harmonious personality have been the predominant criteria for hiring employees). Then, emphasis is placed on continuous evolvement of employee skills and this proves extremely worthy when considering the loyalty of the Japanese workers, which is generated by the notorious lifetime employment that has been practiced since the pre-WWII years. Yet, what is extremely peculiar is that in Japanese firms, poor performers are almost always given a second chance, be it in the form of retraining or job transfer. It is just that Japanese are well-aware of the fact that human resource is critical for producing quality products (Imai, 1986). As Juran asserted once, the Japanese became the best-trained managers on earth in quality control and once they had been trained, they were able to make improvements in both products designs and the manufacturing process, year after year after year (Trevor, 1986).

On the other side of the world (Central and Eastern Europe) though, what we train ourselves and others into is how to ignore problems until it is too late to fix them; how to nurture individualism to the extent that teamwork has become an impossible exercise; how to blame others, but not ourselves for the situation we are in; and how to believe that change can come from others, but not from the mere us.

            [Individualism VS Collectivism] If many years ago quality management was mainly about statistical quality control, today the situation is very different. From Total Quality Control (TQC) to Total Quality Management (TQM), central to the success of Japanese industries has been outstanding teamwork – from the top management level all the way to the shop floor workers and factory cleaners. Certainly, Japanese firms devote great attention and effort to structural factors that foster group work and collaboration, and the fact that their society is group-oriented in general, has helped a great deal. As Hatvany and Pucik (1981) assert, even performance evaluation is group-based. Yet, maybe we finally have to agree that this is a unique Japanese corporate and national trait, which has fostered group-oriented activities that have been the core of Japan’s quality movement.

            In the former Eastern Bloc states such as Bulgaria, we also do talk about the importance of teamwork and collaboration at all levels, but what is really hypocritical is that Bulgaria’s motto, for example, reads “Saedinenieto pravi silata” (in English: Unity makes strength), and yet, we have done almost nothing to extend this motto in our corporate and social worlds. In fact, we have become apathetic to social collaboration since the end of the communist era.

Final Words

In the new context of the twenty first century’s manufacturing environment, the very core of Japan’s economic system such as lifetime employment, seniority wages and subcontracting among others has been blamed for the economic downturn in the 1990s and 2000s. As economic experts called for a third major transformation – the first two being during the Meiji period and WWII (Ohno, 2006), the Japanese did not blindly rush for drastic changes as most developing countries, especially the former Communist Bloc ones, (i.e. Bulgaria), did. In fact, in the 1990s, the Anglo-Saxon management model was presented to the Japanese as one of the tools for the third major transformation. To many supporters of the western-style of management, the American approach to corporate governance was the right pill for Japan’s economic recovery, but it seemed it was not for the Japanese. Instead, following centuries of experiences – from the Meiji period all the way until today – the Japanese carefully analyzed the global economic situation and their inner capabilities, as well as cultural traits. Hence, even in the 1990s and 2000s, when many a times, known and unknown researchers claimed and still do claim that product quality is not an actual competitive advantage, the Japanese continue exploring quality management as a strategic weapon for competitiveness (Phan et al, 2011). Wakon yosai (Japanese spirit; Western learning) – a slogan used during the Meiji period – is the key to Japan’s competitive capabilities.

 [Important lessons to be learned] One important lesson to be learned, especially in the case of developing economies and emerging markets such as Bulgaria is that while the teachings of Americans helped the Japanese with improving product quality, it was the Japanese who led in the development of the new quality management philosophies.

And yet another extremely important lesson is the following: Japanese quality management is more than half a century old, but that does not make it obsolete. On the contrary, it seems that because of its long history, Japanese quality management is built to endure, and by all means, we should not underestimate its economic power.

Reference

• Cole, R., (2004). Industry at the crossroads, MPublishing, University of Michigan Library.
• Fisher, N., (2009). “Homer Sarasohn and American Involvement in the Evolution of Quality Management in Japan”, 1945-1950”, International Statistical Review, 77(2), p.276-299.
• Flood, R. L., (1993). Beyond TQM, Chichester, UK: Wiley.
• Fontaine, R., (1996). Red Phoenix Rising? Dealing with the Communist Resurgence in Eastern Europe, Cato Institute.
• Hatvany, N., and Pucik, V., (1981). “Japanese management practices and productivity”, Organizational Dynamics, 9 (4), p.5-21.
• Hitomi, K., (1985). “The Japanese way of manufacturing and production management”, Technovation, 3(1), p.49-55.
• Hitomi, K., (1992). “Present trends and issues in Japanese manufacturing and management”, Technovation, 12 (3), p.177-189.
• Hopper, K., (1985). “Quality, Japan and the U.S.: The First Chapter, Quality Progress, p.34-41.
• Kobayashi, K., (1986). “Quality Management at NEC corporation”, Communications Magazine, 24(5), p.5-9.
• Ohno, K., (2006). “The Economics development of Japan: The path traveled by Japan as a Developing Country.” GRIPS Development Forum, 2006.
• Phan, A. C., Abdallah, A. B., and Matsui, Y., (2011). “Quality management practices and competitive performance: Empirical evidence from Japanese manufacturing companies”, International Journal of Production Economics 133(2), p.518-529.
• Pudelko, M., and Mendenhall, M. E., (2007). “The Japanese Management Metamorphosis: What Western Executives Need to Know About Current Japanese Management Practices”, Organizational Dynamics, 36(3), p.274-287.
• Trevor, M., (1986). “Quality control—learning from the Japanese”, Long Range Planning, 19 (5), p.46-53.