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Increasing Labor Flexibility During the Recession in Japan



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Increasing Labor Flexibility During the Recession in Japan The Role of Female Workers in Manufacturing Yoshi Fumi Nakata Satoru Miyazaki Introduction In 1990s Japan experienced its first prolonged recession since the end of World War II and has emerged from it in the last few years During this recession the very nature of the Japanese company which had been considered a virtue that supported full employment in the 1980s has been criticized as a major cause of declining competitiveness for Japanese multinational companies and as a cause of the long recession Among the former virtues the so called life time employment system is the first and the foremost target for criticism In the fast changing global business environment giving a life time guarantee of a job to employees is considered the last thing an employer wants to do Following this logic the re emerged Japanese global firms are expected to have management systems that provide organizational and workforce flexibility But an interesting new finding which contradicts this intuition seem to be emerging The Japanese firms actually have preserved many of the old virtues including employment stability for regular employees along with modifications that improve workforce flexibility Four articles in the coming special issue of Asian Business and Management give examples of this new evidence1 In this paper we will examine the evidence and present our own interpretation of it along with new evidence to support our interpretation We examine whether the evidence is valid and how the evidence is reconciled with the fact that the Japanese companies analyzed have regained their international competitiveness in the new environment We argue that a key concept in integrating seemingly contradictory facts is the role of female workers The structure of the paper is as follows First we document the changes in employment practices and the employment situation among large Japanese companies Among these changes are the changes in



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