Abstract

The main purpose of this article is to identify and discuss the Japanese management problems of overseas subsidiaries which is based on several empirical studies of Japanese overseas subsidiaries undertaken by the authors of this article and their colleagues during the last 16 years. The success story of Japanese firms, both in their home country and in their overseas subsidiaries, has been the focal point of comparative management research in the 1970s and early 1980s. Several scholars attributed the impressive productivity gains in Japanese industries to the basic principles of Japanese management. Further, they advocated the utilization of these principles by business enterprises of the U.S. and Europe, in order to solve employee morale and productivity problems. However, in recent years, the validity of the Happy Worker hypothesis in explaining the effectiveness of Japanese management has been seriously questioned. Results of several empirical studies indicate that Japanese firms are facing manpower management problems both at home and in their overseas subsidiaries.