The Ouchi Framework

The success of Japan in the world market of the last decades led to the thought that elements of Japanese approach to organizational culture might be successful transferred to the United States. This way of looking at organizational cultures derives from William G. Ouchi ( Theory Z: How American Business Can Meet the Japanese Challenge , 1981).

Theory Z draws heavily on the Japanese approach to management. Ouchi contrasted two different approaches to management: Theory A , the American, reflects the impact of the typical American (A) organizational culture, and Theory (J) reflects the consequences of the Japanese culture as it operates in Japan. Table 412 contrasts Theory A and Theory J.

Ouchi argues that managers need to adopt Theory Z , that is the ideal translation of Japanese culture patterns for the U.S. context.

TABLE 412 American and Japanese Management Styles
Theory A ( Japanese) Theory A (American)
Lifetime Employment Short term Employment Employment
Slow Evaluation and Promotion Rapid Evaluation and Promotion
NonSpecialized Career Paths Specialized Career Paths
Implicit Control Mechanism Explicit Control Mechanism Responsibility
Collective Decision Making Individual Responsibility
Wholistic Concern Segmented Concern

Source : William G. Ouchi, Theory Z: How American Business Can Meet the Japanese Challenge . Reading Mass.: AddisonWesley, 1981, p. 58.

Theory Z takes three characteristics from Theory J (collective decision making, slow evaluation and promotion, and wholistic concern), one from Theory A (individual responsibility), and three dimensions that represent intermediate position between the Japanese and American approach (long term employment, moderate specialized career paths, and combination of implicit and formal control). Table 413 outlines the results of these efforts.

TABLE 413 Theory Z
Long term employment
Slow evaluation and promotion
Moderately specialized career paths
Combination of implicit and formalized control measure
Collective decision making
Individual responsibility
Wholistic concern

Source : William G. Ouchi, Theory Z: How American Business Can Meet the Japanese Challenge . Reading Mass.: AddisonWesley, 1981, pp. 7194.

The Japanese management style is much more complex that Ouchi suggests. Pascale and Athos, delving more deeply into Japanese management, point to the Japanese way of establishing superordinate goals that tie the enterprise together.

Thus, most American managers who are drawing on Theory Z and Japanese management approaches to change their organizational culture are doing so on selective basis. They are choosing those ideas which, when appropriately modified, will result in higher productivity and efficiency.


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Leadership, Power, And Organizational Culture
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