Theory Z suggests that involved workers are the key to an increase in productivity and it offers several ways to manage people so that they can work together more effectively. American workers work as hard as any, increased productivity does not come from working harder. Productivity is believed to be a problem of social or managerial organization. Employees need long-range incentives to coordinate efforts. Theory Z states that productivity and trust go hand in hand. Japanese workers trust that their sacrifices will be repaid in the future and equity will be restored. Theory Z also points to the notion of subtlety; relationships between workers need to be considered; teams based on seniority loose subtlety and productivity declines. Intimacy is a thread of Japanese life; it is also found in the work setting. In American life it is found in the family, friendships, and the church; it is threatened by industrial life. Theory Z states that productivity is dependent on trust, subtlety, and intimacy (Ouchi, 1981).
Japanese organization includes lifetime employment; promotions are from within and employees remain until mandatory retirement age. Termination does not take place for anything less than a major criminal offense. Rapid turnover in American companies results in formality and distance which does not lead to collective work. Japanese management mechanisms of control are thorough, demanding, disciplined, flexible, and different from Western firms. Management describes objectives and procedures. Objectives include the values of all participants, customers, and government regulators. Everyone feeling the impact of a decision is involved in the process of making it; American approaches usually involve no more than 8 to 10 people discussing alternatives. The Japanese orientation has a collective sense of responsibility and collective values and beliefs are part of every decision. Industrial life is viewed as integrat...