Back to the Workplace

Hiroshi Okuda Chairman, Nippon Keidanren

Happy New Year! Two thousand four is-must be-a year for putting the Japanese economy truly on track. This needs to be a year for industry and government to push ahead with structural reform focused effectively on generating demand.

We appear to be heading, tentatively, in the right direction. Things began inauspiciously for the Japanese economy in 2003, with conflict in Iraq, with mounting tensions on the Korean peninsula, and with the outbreak of SARS. But promising trends began to emerge in the second half including an upturn in corporate performance.

Some troubling events of 2003 summon introspection, however, as we strive to translate our nascent recovery into lasting growth. Last year, Japan experienced an unprecedented spate of disasters attributable to human error in the manufacturing and transport sectors.

A disconcerting pattern is apparent in the accidents and scandals that have become all too common in Japanese industry. Mistakes and carelessness have become epidemic in the workplace, and we even see conscious infractions, sometimes occasioned by an unhealthy emphasis on performance and profit. During Japan's economic bubble of the 1980s, Japanese industry suffered a wave of financial scandals and other incidents that resulted from imprudent and occasionally unethical management. Now, a distressing number of the incidents are arising in the workplace.

The causes of the workplace incidents are bigger and farther-reaching than a mere weakening of discipline or softening of employee attitudes. These incidents reflect structural problems that have resulted in a decline in employee capabilities and that have thereby undermined overall workplace competence.

Reliable statistics are unavailable for the downward trend in workplace capabilities, but Japanese manufacturing's pool of advanced skills and experience is clearly shrinking, and employees in the workplace are visibly under mounting pressure to meet performance targets. Partly responsible for these trends are the waning of lifetime employment arrangements and the growing disinclination of management to maintain jobs at any cost.

The economic vigor of our nation depends on the commitment of people in the workplace. If we countenance an ebbing of that commitment, technological progress will cease, and economic growth will come to a grinding halt. We in management need to face up to this issue honestly. We need to reexamine our approach to corporate restructuring. We need to acknowledge our own responsibility for the decline in workplace competence.

Maintaining an effective workplace is the responsibility of management. The competence of the Japanese workplace has been a tribute to the characteristic Japanese emphasis on human respect and long-term perspective. Let us rediscover that emphasis before it is too late.