Internationalization at Honda: transfer and adaptation of management systems
| DOI | https://doi.org/10.1108/01425459810228342 |
| Pages | 285-302 |
| Published date | 01 June 1998 |
| Date | 01 June 1998 |
| Author | Andrew Mair |
| Subject Matter | HR & organizational behaviour |
Adaptation of
management
systems
285
Internationalization at Honda:
transfer and adaptation of
management systems
Andrew Mair
Birkbeck College, University of London, London, UK
Introduction
Debate over the transfer and adaption of industrial models prompted by the
globalization of Japanese manufacturers continues to draw attention. Most
discussion has concerned issues of work and employment relations, where the
new multinationals have interacted most directly with host societies. Two polar
views have framed the debate. On the one hand, it has been argued that
Japanese management systems cannot function effectively in the West – or that
if they can, the workforce suffers – because they are culture-bound, exploitative,
and would be resisted by trades unions. Japanese practice has been interpreted
as classic “Theory X” management. On the other hand, Japanese management
systems are said to offer Western production workers new opportunities for
teamwork, self-expression and workplace democracy which should be grasped
eagerly – here Japan is interpreted as classic “Theory Y” management.
The characteristic Western “either/or” analytical approach may have set up
a false dichotomy. Adler’s (1993) study of the Toyota/GM joint venture NUMMI,
in California, revealed that rigid management structures were combined with
opportunities for worker participation in the “learning bureaucracy”. Mair’s
(1994a) study of Honda in Ohio showed how workers participated but in a way
that was strictly channelled, and that the “single status” system both provided
a degree of democracy and equality and permitted authority systems to
function more effectively. Innovative management appeared to have reconciled
the dichotomies that academic observers continued to debate.
Progress in understanding the Japanese multinationals has been further
complicated by two other considerations. First, Japanese firms appear to have
adapted their management systems to their new local environments in a process
of “hybridization”. The questions become which elements of the model are
retained and which are changed, and whether performance is inferior, equal, or
even superior to that achieved in Japan (Boyer et al., 1998). Second, there are
considerable variations in strategies, organizational forms and operations
systems across Japanese companies (Freyssenet et al., 1998). Arguably,
management systems at Nissan, for instance, share more in common with those
at Ford than those at Toyota (an hypothesis for which Cusumano (1985) offers
strong support, as do Western managers at UK automotive suppliers
interviewed by the author who deal Toyota, Ford and Nissan on a daily basis). Employee Relations,
Vol. 20 No. 3, 1998, pp. 285-302,
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The idea of significant variations across Japanese firms has not yet been fully
accepted, in part deflected by abstract theories such as “lean production”
(Womack et al., 1990) which generalize from the Toyota case.
These theoretical issues are addressed in this case study of operations,
organization and employment relations at the Honda factory at Swindon in
southern England – Honda of the UK Manufacturing (HUM). The HUM factory
is the hub of Honda’s operations in the world’s largest market, and therefore of
considerable strategic significance, although due to the relatively low European
market shares of the Japanese producers HUM produced only about 6 per cent
of Honda’s global vehicle output in 1998, with output anticipated to reach
150,000 per year by 1999 after six years of car production. Indeed the
competitive environment in Europe has proved challenging for the Japanese,
with southern European markets politically closed until the mid 1990s, fierce
competition from domestic manufacturers of comparable products, marked
exchange rate fluctuations, as well as political pressure for high “local content”
even at low production volumes. Honda faced a particular challenge when rival
BMW purchased long-term local partner Rover Group in 1994.
The analytical approach adopted in this paper is based on the following
proposition. The relationship between Honda’s global corporate strategy and
the local operating environments of its factories is mediated by a nexus
consisting of the production system, the organization of work, hiring and
training processes, organizational processes and philosophies, and employment
relations frameworks. This nexus defines Honda’s “industrial model” (Boyer et
al., 1998; Freyssenet et al., 1998; Mair, 1998a).
Mair (1994a) offers a preliminary assessment based on research at the initial
HUM engine plant. This paper incorporates further research at the car
assembly plant. The first part examines the “received views” of organization at
Honda in the management literature. The second part describes the operations
management systems used at HUM, including the roles played by production
workers. Third, HUM’s organizational processes and employment frameworks
are analysed. The implications of the HUM case for the broader debates over
“Japanization” are drawn out in the conclusions.
Empirical research included three plant visits to HUM and two further
discussions with HUM managers, amounting to 12 interviews with managerial
staff, all European: four in general management, three in purchasing, two in
production management, two in human resource management, and one in
materials handling. Honda is generally not very open to external researchers,
and the conclusions of this paper are therefore provisional. However, the
analysis of HUM has been aided by the author’s research at Honda in the USA,
Canada, Belgium and Germany, including interviews with senior Japanese
managers (sales, general, R&D) and product development engineers, as well as
North American and European managers across the range of management
functions.
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