This firm's Indians are all chiefs, too

Masao Mayekawa is president of a flourishing company that holds a major share of the world market for industrial refrigeration systems. But although he is the son of the company founder, he makes no decisions, issues no orders.

All the initiative, in fact, comes from the shop floor, as part of Mr. Mayekawa's unique business philosophy to avoid a hierarchical structure and keep operations decentralized.

Mayekawa Manufacturing Company has some 800 employees, all of whom are members of self-supporting small groups that decide their own marketing and technical development. At last count there were over 100 such groups, and the number is constantly growing as the need arises.

It sounds like anarchy, but Mr. Mayekawa insists it works. Self-management provides the vital motivating force that has kept the company constantly profitable, enabling the president to boast: "I've never met a single banker and never had to borrow a single yen."

His system is hailed as a revolutionary approach to company management, but he insists: "All I'm doing is applying a traditional Japanese approach."

Self-contained groups of artisans were the backbone of Japanese business and industry before World War II, he explains. But with the US occupation, Western business methods gained ground here, including centralized decisionmaking and bloated head offices with low productivity and a proliferation of executive titles.

"We tried that after the war for a while, but the result was a sharp decline in staff relations. So we went back to the prewar style," says Mr. Mayekawa firmly.

I makes sense for a company like Mayekawa Manufacturing, whose main line is installing refrigeration systems for food processing industries, particularly at fishing ports. Each area has its own peculiarities of diet and its own unique demands, so Mayekawa needed men on the spot well-versed in local conditions -- not teams of experts at the head office. The group system grew out of this need.

A typical group might contain five people developing a product for one particular market. The leader of the team will not necessarily be the oldest, as long as he is regarded by his colleagues as superior in technical skill or knowledge.

A high degree of self-motivation is needed, because such a small team obviously cannot afford to "carry" anyone. Close cooperation is essential. Any group member who is unhappy can transfer to another team as a vacancy occurs, if he is considered acceptable.

The number of teams has expanded with the business.

As Mr. Mayekawa explains it to visitors (through blackboard diagrams with circles and arrows pointing in all directions), Group A, having gained considerable expertise in making one product and winning good orders, now sees the need for a derivative or an entirely new product.

So Group A takes the initiative to form a new development team, drawing from the original group, bringing in interested persons from other groups, even recruiting fresh talent from outside.

This expansion process can eventually lead to, say, five teams all linked in some way with the original Group A. In many ways it's like the medieval European guilds linking master and apprentice.

Mr. Mayekawa's role is mainly that of coordinator, especially when each group makes its annual budget request.

The prime requirement for smooth operation is good communications, which is why the company's Tokyo head office consists almost entirely of conference rooms -- almost always fully occupied.

"We've never thought of ourselves as a legal corporation requiring written rules and statutes. There is no interference from the top. We don't have a lot of glorified titles. We have never held a board of directors meeting."

"We want to create a system where working together is fun," the company president says. "With a high degree of unity and good feeling, working hours and free time should be entirely the same as far enjoyment goes."

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