Oct 19, 2009
Information sharing and firm performance in Japan (Morishima, 1991)
Morishima, M. (1991). Information sharing and firm performance in Japan.
“This study uses a survey of Japanese joint consultation committees and publicly available business data to examine the effects of information sharing on a firm’s profitability, productivity, and labor cost. The results generally show a positive association of information sharing with profitability and productivity and a negative association with labor cost”.
Compared to American firms, the Japanese have long recognized the value of sharing information in industrial relations systems.
The Ryoshi Kyogi Sei (joint consultation system) has two basic functions (1) sharing of business information, and (2) prior consultation with unions regarding upcoming business decisions.
To do this two tiers of communication are often established. (1) Workplace level (quality control circles, shopfloor committees), and (2) corporate level (Roshi Kyogi Kai – Joint Consultation Committee (JCC) composed of corporate and union representatives).
JCCs provide (1) management with a way to preempt tough negotiations and strikes by sharing information with unions, and (2) unions and employees to learn about the status of the firm and react to business decisions.
> Results
* Firm Profitability
Information sharing significantly related to return on assets and return on sales.
* Employee Productivity
Information sharing significantly related to employee productivity (only when the log of productivity is the dependent variable).
* Labor Cost
Information sharing is significantly related to lower labor cost.
> Conclusions
The relationships appear to be stronger for manufacturing firms. This may be due to the ‘different degrees of fit between technology and workforce characteristics, on one hand, and information sharing used as a labor relations strategy on the other’.
These results support the goal alignment model.
Morishima, M. (1991). Information sharing and firm performance in Japan. Industrial Relations, Vol. 30, No. 1, pp. 37-61.
