The Impact of Culture in Supply Chain: A Japanese Case Study

The Impact of Culture in Supply Chain: A Japanese Case Study

Culture refers to how the human mind is collectively programmed which differentiates people from different human groups. It is a system of values that are collectively held (Hofstede,2001). The culture of the many nationals has gained more importance as far as business is concerned due to the aspect of globalization. The supply chain is described as an extended organization which utilizes all the resources and skills available to help every firm and their entire systems to have a competitive advantage. The understanding of culture and its effects is critical in the concept of the supply chain. Various research conducted on the subject has shown that the culture of a nation influences its supply chain. This paper will discuss the impact of the Japanese culture on the supply chain.

Research Objectives: To identify the effects of the Japanese culture on the supply chain.

Research Questions: What is the influence of culture on the supply chain?

Importance of Research

 To help organizations understand how culture affects the supply chain.

 To help the reader understand the cultures of different nations and how it affects the supply chain.

 To critically analyze the Japanese culture and how it affects the supply chain.

Culture is vital in the way supply chains are integrated and is viewed at as the glue which keeps the organizations together through the provision of coherence and cohesiveness among different parts. Various research shows that the cultures of the different nations influence the relationship of resources. Research conducted in 2006 by Griffith et al., identified that the relationship between commitment and trust was moderated by National by the culture which led to increasing the ability to share information and resolve problems (Gill,2011).

The globalization of the supply chains has resulted in an increase in the importance of understanding the significance of a nation's culture on the supply chain management among different organizations. The supply chains are made more competitive by globalization thought he increase in the competition and the expectations of customers of performance, cost, and quality. The supply chains also get more complex due to the increase in cultural differences that exists between markets, operations, and suppliers. The majority of the manufacturers have to locate a part of their activities in other nations as sources of imports from more of the countries which means that the impacts of culture have to be considered in the supply chain management (Gill,2011). Hence, it is important that the supply chain managers understand and accept the differences in cultures. It is more important in corporations that are multinational which deal with people from different nations meaning that they have different cultures.

The culture of nation influences the culture of an organization which in turns affects the supply chain among organizations. It is advised that it is important to focus on both the relationships within the organization as well as between other organizations which may have a great influence on the supply chain. The importance of the culture of organizations in supply chain as viewed by Schneider in the glue which holds different organizations together through the provision of coherence and cohesiveness (Gill,2011).

Japan is among the greatest productive, influential and enlightened nations across the globe. It is on the forefront in the leadership of migration of the leaders of businesses in the world towards globalization of operation which involves the integration of designing, manufacturing, sourcing, marketing, selling, supporting and distributing of services and products across the globe. Japan is a superpower as far as the supply chain is concerned (Inagaki & Kuroda,2007). According to Hudson (2005), due to the relocation of the various business operations around the world, there is a growth in the importance of the movement of the goods. Those that provide logistics who are mainly Japanese companies have the responsibility of the goods' movement, and they are faced with different culturally based challenges in every region that the goods are moved. The realization and acceptance of the various cultural differences are essential for the development of working relationships that are strong. For a country like Japan, relationships are critical, and the same culture is reflected even in business.

The manufacturers of Japanese origin were faced by difficulties in the 1990s which were caused by recession in the national economy. The Japanese shareholding in the automobile across the world went down from 36% in the year 1991 to less than 30% in the year 2000.The industry was later advised by the ministry that collaboration with the Eastern of Asia was important. The international strategy lead to problems for the automakers in Japan in doing business with the suppliers from China due to differences in culture. Many people from the western appreciate and are able to differentiate the Japanese culture from that of the Chinese. However, the differences in the cultures are many and they affect the supply chain management in a significant way (Jia et al.,2016).

The Japanese companies have high value for quality and service, and they work hard towards achieving the objectives. However, previous studies show that the efforts do not result in any significant differences in performance as compared to their counterparts from the Western companies. It is established that clashes in cultures in the operations hinder the companies from achieving excellence in their performance (Koster & Shinohara,2015).

The Japanese are known for the use of "Keiretsu" networks during their expansion into other nations. The "Keiretsu" is used to refer to a group of companies that have business shareholdings and relationships that are interlocking. The approach was commonly employed by the Japanese after the second world war (Ahmadjian & Lincoln,2001). According to Jia et al. (2016), the Japanese "keiretsu" system is applied in the supply management system of the Japanese. For example, the Japanese companies which set up plants for assembling automotive in other Nations made use of the system when working with suppliers of the components.

According to Gill (2011), the Japanese culture represents a lot of cultures whose relevance is increasing in the chains of supply globally. There are significant differences in culture between Japan and other nations especially U.S.A. The two countries have important business-related relationships. The supply chain management of Japan especially in the automobile industry has been known for high standards for supply chain management. This has led to lower levels of inventory and high quality of products. Nevertheless, research has shown that its effectiveness is not adequate especially when it is done in cultures that are not compatible. Particularly, a certain research shows that companies which deals with logistics in other countries like Europe perform badly because of the differences in the cultures about the operations. It is recommended that organizations of Japanese origin should adapt the practices of the Western practices.

The style of supply by the Japanese emphasized on long-term relationships between buyers and suppliers, collaborative development of products, the improvement that is continuous, external and internal training and long-term type of employment. The relations between the suppliers according to the system are built on trust, loyalty, obedience and consensus in decision making. The procedure of attaining consensus in the supply chain of the Japanese is known as "nemawashi" which is the process of making decisions. The process demands that discussions are continuously held and compromised before finalizing on a decision. The discussions are however conducted in an atmosphere of cooperation and friendliness (Jia et al.,2016).

The concept of Amae which is focused on mutual interdependence characterizes the supply chains used by the Japanese. The concept is based on the Japanese emphasis on collectivism which results into reliance on the rest in the community which leads to less friction, increased synergy and cooperation, and a desire for getting care with benevolence. This collectiveness impacts significantly on the distribution process (Gill,2011).

It is evident that culture has significant effects on the supply chain as well as other operations of the organizations. The Japanese culture has effects on the supply chains both within the country as well as in other nations. It is important for the nations to understand each other's culture to do business effectively and relate well with suppliers and customers from other countries and cultural affiliation. The research had the limitation of sparse literature on the effects of the Japanese culture on the supply chain.

References

Ahmadjian, C. L., & Lincoln, J. R. (2001). Keiretsu, governance, and learning: Case studies in change from the Japanese automotive industry. Organization science, 12(6), 683-701.

De Koster, R., & Shinohara, M. (2006, January). Supply-Chain Culture Clashes in Europe. Pitfalls in Japanese Service Operations. In Supply Chain Forum: An International Journal (Vol. 7, No. 1, pp. 60-68). Taylor & Francis.

Gill, C. (2011). The impact of Japanese culture on inter and intra organization supply chains.

Hofstede, G. H., & Hofstede, G. (2001). Culture's consequences: Comparing values, behaviors, institutions and organizations across nations. Sage.

Hudson, S. (2005). Cultural effects on the global supply chain. The SCRC Articles Library.

Inagaki, M., & Kuroda. K. (2007). Global focus: Supply chain management in Japan.

Jia, F., Gao, R., Lamming, R., & Wilding, R. (2016). Adaptation of supply management towards a hybrid culture: the case of a Japanese automaker. Supply Chain Management: An International Journal, 21(1), 45-62.