Can the Industrial Relations in Japan be Reconstructed in the Long-Term Perspective?

More than ten years have already passed since it was first proposed that Japan’s corporate management and labor relations should be reformed to keep pace with globalization. After the financial crisis of 1997, especially, corporate governance changed, and management began to shift emphasis to short term rather than long term profits and shareholders’ rather than employees’ concerns. In addition to the general reduction in labor costs, replacement of regular employees with non-permanent employees rapidly proceeded. The wage system became more performance-based as well in accordance with emerging HR policies that sought the immediate competence of employees. However, some scholars argue that, in the long term, such changes in business strategy and HR policy have negatively affected Japanese industries’ productivity and quality.
Moreover, Japan’s industrial relations have been affected as well. Labor unions have failed to cope with problems such as wage reductions, growing numbers of non-regular workers, and the decrease of collective bargaining power. These problems exist against a backdrop of increasing wealth disparity.
This paper aims to elucidate the possibility whether the Japan’s industrial relations could be reconstructed or not in the long-term perspective, focusing on the mechanisms by which globalization and changes in corporate governance are influencing industrial relations at the micro level.