Globalization and Enterprise Unions of Japan: The Paradox of Employees as Important Stakeholders

Abstract

In the age of globalization, polarization rapidly increased in Japan. This paper examines how the Japanese enterprise unions dealt with the impact of globalization, why the unions could not stop the polarization, and the result of union behavior to the unions themselves. Japanese companies chose a strategy which was not accelerating investment or innovation, but reinforcing cost cutting, which brought about a decrease in regular workers, an increase in non-regular workers, and resulting earning differentials. The enterprise unions that were composed of important stakeholders of Japanese companies tolerated this kind of behavior. However, the cost cutting strategy and the ensuing ractices of employment/compensation management might have led to the erosion of worksite capabilities genbaryoku) by creating an obstacle to smooth communication and reducing spare time to carry out the kaizen (improvement) plans, as seen in the case study of Company A. The paradox of employees as important stakeholders implies that it is not enough to blame the egoistic behaviors of enterprise unions from the viewpoint of solidarity and justice. Contrarily, it is necessary to investigate the reality that these behaviors might weaken worksite capabilities, the very basis of employees as important stakeholders.