Diversity management has been extensively studied in domestic settings. However, domestic diversity management research is inadequate for understanding diversity management concerns of global firms at the level of their strategic decision-making and cross-national coordination activities. The aim of this paper is to examine Japanese global firms in the automotive industry with a view to reveal their reasons for adoption, diffusion and implementation of global diversity management activities. The field research assumes a multi-party, multilayered approach, incorporating interviews with decision leaders in key institutional actors, including diversity managers, trade union and employers’ association representatives and, subject specialist scholars. The research also involves a case study of global diversity management in the Japanese automobile industry from a multi-stakeholder perspective. Despite their global outlook, the automotive companies still retain multinational rather than global approaches to diversity management, proposals of some remedies for overcoming current tensions in effective implementation of global diversity management activities.diversity management, global, automobile industry, Japanese companies

Mariana Preda

English

Research Papers in Economics

  59 
 
 
“Global” Diversity Management: The Case of Automobile 
Manufacturing Companies in Japan 
 
Mariana Preda
∗ 
 
Abstract 
Diversity management has been extensively studied in domestic settings. 
However, domestic diversity management research is inadequate for 
understanding diversity management concerns of global firms at the level of their 
strategic decision-making and cross-national coordination activities. The aim of 
this paper is to examine Japanese global firms in the automotive industry with a 
view to reveal their reasons for adoption, diffusion and implementation of global 
diversity management activities. The field research assumes a multi-party, multi-
layered approach, incorporating interviews with decision leaders in key 
institutional actors, including diversity managers, trade union and employers’ 
association representatives and, subject specialist scholars. The research also 
involves a case study of global diversity management in the Japanese automobile 
industry from a multi-stakeholder perspective. Despite their global outlook, the 
automotive companies still retain multinational rather than global approaches to 
diversity management, proposals of some remedies for overcoming current 
tensions in effective implementation of global diversity management activities.  
 
Keywords:  diversity management, global, automobile industry, Japanese 
companies. 
 
1. Global effects: Incipient associations 
 
The expansion of the legal protections to wider range of categories of 
workers and the divergence of diversity concerns across national borders calls for 
coordination of equal opportunities activities in global firms which do not only 
employ home and host country nationals but also have by definition third country 
workers. Therefore, while the individual differences are exacerbated in this 
international setting, also the complexity of legal provision requires that the 
management approach is indeed more proactive and overarching that it can 
accommodate current law as well as foreseen changes. Diversity management 
discourse with its promise to recognize and value individual difference came at 
the right time in North America and Western Europe when these legal changes 
were taking place. Japanese global firms present a different picture altogether. The 
                                                           
∗ Mariana Preda is at the Romanian American University in Bucharest. 
Romanian Economic and Business Review – Vol. 3, No. 3   60 
reasons for this are manifold: Whilst Japan hosts the head quarters of a large 
proportion of world’s global firms, Japanese labor law has remained largely 
unaffected by expansion of anti-discrimination legislation in the last three 
decades. Three key pieces of legislation were enacted in Japan during this period. 
Equal Employment Opportunity Law of 1985 was introduced to eliminate direct 
discrimination, the Employment Stability Law for Older Workers of 1986 to 
ensure stability of work for older workers and the amendment of the Labour 
Standards Law in 1987 to attempt at curbing the long working hours in Japan. 
However, the impact of these pieces of legislation is questionable. Whilst an 
Equal Employment Opportunity Law was introduced in Japan in 1985, this came 
little too late and with little impact and scope. The law only tackles sex equality 
and had provision for only direct forms of sex discrimination, where indirect form 
of sex discrimination are not considered unlawful. This point was raised by Rengo 
in their efforts to lobby the government for a change of law to incorporate indirect 
discrimination. Whilst direct discrimination may tackle overt forms of 
discrimination, subtle forms of discrimination, by which a single rule has a 
disproportionate impact only on one gender. For example, the long hours of work 
culture in Japan effectively keeps career opportunities away from women who are 
expected to carry out disproportionate share of domestic duties in corporations 
that value face time and presentation culture. Among other factors, the weakness 
of the law meant that the Japanese labor market has retained a strongly sex 
segregated profile in comparison to other industrialized countries. In response to 
the law, Japanese firms sought to provide dual career paths for women who wish 
to take up careers and women who wish to stay in the temporary workforce. 
However, Wakisaka (1997) argues that this was not a completely positive 
development as it still hinders women’s chances of career moves between 
temporary and career track work, after they take up their first post. Furthermore, 
Japanese global firms have retained a homogenous workforce in head quarters in 
Japan. The core workers in Japanese international firms are predominantly male 
and overwhelmingly Japanese nationals (Arimura 2001, 2004). This model 
presents a contrast to increased heterogeneity in other global firms in Europe and 
North America. Furthermore, Japanese business and management schools have 
not broken the mould to offer courses in equality and diversity management; as 
such skills were not required explicitly by the recruiting companies. Whilst the 
globalization of Japanese firms have not engendered diversification of their 
managerial workforces, the Japanese society, customs, and labor market dynamics 
have altered to entertain greater levels of diversity. For example, the proportions 
of women who enter the labor market and women who wish to have careers have 
increased (JILPT 2005). Furthermore, women’s accession to career tracks is 
underway (Wakisaka 1997). Family sizes have decreased and Japan has been 
receiving migrant labor particularly from South American countries (descendents 
of earlier Japanese migrants there) and other foreign nationals that arrived for   61 
work. Increased concerns over management of diversity and some high profile 
cases abroad, such as the discrimination law suits against the Mitsubishi Motor 
Corporation (see Box 1), as well as the changes in the internal labor market has 
encouraged global firms in Japan to consider diversity issues with some degree of 
resolve. 
This study also uncovered that personal commitment to diversity by 
individual diversity officers, senior executives and other individuals with a 
diversity cause to champion, has been a significant influence on the way diversity 
management approaches are shaped. The executive director of the case study 
company as well as by consecutive directors of Nippon Keidanren has fostered 
diversity management initiatives in these organizations. The campaign in Rengo 
had a more diffuse ownership. Interviews suggested that powerful individuals 
with clout in organizations can elevate the status of diversity management and 
support programs and initiatives. The individual support afforded by senior 
executives is essential in the recognition of diversity as a key institutional 
prerogative and a strategic concern for the organization. Diversity officers may 
face a number of obstacles to realize their aims, develop themselves 
professionally and find solutions to their diversity related concerns: One of the 
issues that my interviews have reviewed is the fact that there is little collaborative 
networking in the field of equality and diversity across sectors, firms, and 
different constituent actors. This is radically different to the case of USA and the 
UK where such networking between diversity management officers of companies, 
some of which are rivals in the sector. These networks provide essential means by 
which practices and view points on diversity management are exchanged and 
some common and unique cases are discussed with a view to find solutions. The 
interviews in the case study company, Rengo and the Nippon Keidanren revealed 
that indeed such networking is not possible in Japan, where the members of 
competing firms do not get together on issues of diversity. Lack of networks may 
have an isolating impact of diversity officers who may experience professional 
difficulties in overcoming their Contributing to the isolation of diversity officers 
is also the unavailability of diversity management training in Japan. As explained 
earlier, diversity management does not even constitute a minority interest in 
management curriculum Japanese universities. In response to a question regarding 
diversity management training one of the participants was able to refer to a 
doctoral thesis that she was able to locate in a university library and another 
participant mentioned a professor who has done research on the field. Other than 
individual attempts at professional development, the Japanese education system 
does not yet cater for professionalization of diversity officers. Furthermore, the 
situation of diversity managers as agents of change and influences on diversity 
management strategy is the least studied subjects in the Japanese context. 
Diversity management officer posts are relatively new posts in Japan, furthermore 
the academic attention has been devoted to institutional policy making and   62 
implementation efforts in the field of diversity management, rather than the 
significance of the individual actors. Considering that these constraints are evident 
at the head quarter country of the Japanese automotive companies, deems the 
recruitment, selection, training and professional development of ‘global’ diversity 
managers even more complex. If the Japanese companies are to recognize the 
value that diversity management one day and decide to move from multi-domestic 
to global diversity management approaches, there needs to be several changes in 
the current education system in Japan to capture the need for training diversity 
professionals. 
The case of individual commitment to and leadership for diversity 
management does not appear to be as strong in Japan as it is in other countries in 
North America and Western Europe. This may be due to the fact that in this 
current political and social climate, talking about diversity or championing the 
cause of diversity may be viewed as swimming against the tide. On the same 
token, diversity may be associated with certain ‘unpleasant’ concepts such as 
discrimination and inequality by sex and race. The wall of silence that these two 
overtly critical issues receive in the mainstream of Japanese scholarship in 
economics and management may also be responsible for the shortage of 
champions in different causes of diversity. However, the literature suggests (Sako 
1997) that heterogeneity in the Japanese labor market is unlikely become less. 
Therefore, if the social discourses surrounding diversity can break the mould of 
silence, it may be possible to see more leadership in diversity management. 
 
2. Discussions and conclusions 
 
Who are the key actors that inform the global diversity management 
perspectives of Japanese car manufacturing firms? Why and how do Japanese 
automotive firms develop their ‘global’ diversity management approaches? What 
are the key influences and drivers in adoption and diffusion of diversity 
management approaches in Japanese global firms?  
The layered approach that the study has taken allows for identification of a 
range of actors at each level of influence. At the global level, the alliances, strong 
and weak economic, social and labor ties between Japan and other industrialized 
countries has fostered the development of the current legal framework for equality 
in Japan. The same actors are now in operation, as the rest of the industrialized 
world has been moving from equal opportunities laws that are limited to gender 
and ethnicity to laws which offer protection against discrimination on the basis of 
a wider range of differences and diversity. International Labour Organization 
(ILO) also plays a role in pushing for international labor standards. International 
institutions of significance are the ICFTU and its Asian and Pacific counterpart 
for the trade unions. Furthermore, transfer of knowledge through best practices in 
global firms as well as universities allows for public and management opinion to   63 
be shaped. However, the global actors that shape the global diversity management 
approach that the Japanese car manufacturing companies take are still rather weak 
in terms of their relevance to global diversity management concerns. At the 
national level, the state, corporations, trade unions and employers’ associations 
are the key actors. However, in the Japanese context, the impact of these national 
actors remains at the level of domestic diversity management. There is no 
provision or encouragement for global firms to adopt global diversity 
management approaches or to make these public for that matter. Furthermore, the 
weak and almost negligible political and social support for causes of equality and 
diversity means that there is little concern over global diversity. Indeed, attention 
has almost exclusively been on growing heterogeneity in the domestic labor 
markets. Nevertheless, in recent years, due to changes in the composition of labor 
supply, the national level actors have started debating equality issues, particularly 
in relation to women and older workers. Furthermore, there are company based 
efforts due to an increased awareness of the business case for equality and 
diversity. These initiatives and programs should not be discounted altogether, 
because there is little union or other actor involvements. 
At the organizational level, the actors are both external and internal. External 
actors are the national level actors, outlined above. The internal level actors 
diversity management offices, or other functional areas that take up diversity 
management roles as well as individuals that partake in diversity management 
decision making in a spectrum of roles ranging from championing diversity to 
displaying backlash behavior against it. The organizational level actors in this 
study were the ones carrying much of the burden of interpreting the conflicting 
pressures of the labor market supply and demand, competitive pressures of the 
market, and global, regional and national trends. Despite the burden these 
individuals bare in balancing these competing pressures, they are often the ones 
who are afforded the lowest level of resources in terms of training and 
professional development opportunities. 
Why and how do Japanese automotive firms develop their ‘global’ diversity 
management approaches? This question was formulated with the hope that 
Japanese firms in the automotive sector would assume global diversity 
management activities. The interviews have revealed that indeed the Japanese 
automotive firms have diffused rather than coordinated management of their 
diversity management activities in their global branch networks. This model is 
more akin to the multinational firm model, where practices are localized without 
overarching global management. The automotive firms in Japan find the 
multinational model more appropriate possibly for two reasons. Their headquarter 
workers and senior managers in their branch networks are still drawn from 
homogenous pools of Japanese men, only very few women and even fewer 
minority ethnic workers or third country staff are employed in these posts. Sole 
use of Japanese language in head quarters of Japanese firms presents a natural   64 
barrier to employment of foreign nationals. The homogeneity of the workforce is 
also coupled with an inherent belief in Japanese ways of work and their superior 
over other forms of organization. This belief contradicts the very principles of 
diversity, which is about allowing difference. Japanese global firms’ management 
approach does not yet allow for ‘global’ diversity offices to be set up. However, 
international talent pool is small and global firms have to compete for recruiting 
best staff. In these times of change, the clash between the old ways and the new 
ones is likely to swing for the benefit of the new. Global firms in the Japanese 
automotive sector are under pressure to increase their productivity. International 
research suggests that there are performance improvements in effective 
management of global diversity. It is unlikely that the Japanese firms will ignore 
the substantial empirical evidence that comes from North America and Western 
Europe. 
Finally, the likelihood of adoption of domestic and global diversity 
management is contingent upon the speed of various transformations at multiple 
levels of engagement. Despite the bleak picture that the current evaluation 
presents of the present status of global diversity management efforts of Japanese 
firms, the winds of change are certainly blowing from the right direction for future 
adoption of diversity management by firms. However, time will tell if the 
Japanese companies will respond in ways that will embrace or battle against the 
demographic and competitive challenges of increased global diversity. 
 
References 
 
Özbilgin, M., September 8 2005, ‘Global’ diversity management: the case of 
automobile manufacturing companies in Japan, Paper presented at the Japan 
Institute for Labor Policy and Training, Tokyo. 

Global’ diversity management: the case of automobile manufacturing companies in Japan, Paper presented at the Japan Institute for Labor Policy and Training,

“Global” Diversity Management: The Case of Automobile Manufacturing Companies in Japan

http://www.rebe.rau.ro/RePEc/rau/journl/FA08/REBE-FA08-A6.pdf

“Global” Diversity Management: The Case of Automobile Manufacturing Companies in Japan

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