Kaizen: Why is It so Difficult to Understand?

Abstract

Much existing research demonstrates the effectiveness of introducing kaizen to developing countries. The Japanese word “kaizen” is commonly translated into English as “continuous improvement” or simply “improvement.” However, its literal translation obscures important connotations that are difficult to translate. This chapter discusses the meaning of kaizen and why this seemingly simple term is challenging to comprehend not only for non-native speakers but also for Japanese readers. This chapter identified three reasons why kaizen is challenging to understand. First, there are two different origins of kaizen. One focuses on quality and productivity, and the other focuses on worker protection. In many cases, people often mix these two and make it difficult to understand. Second, the worker protection aspect of kaizen cannot be transferred directly to other countries as the management–labor relationship is different. Third, as the nature of kaizen is context specific, the entire logic is difficult to grasp. Improving the living standard of developing countries may require supplementing the implementation of the kaizen with additional assistance focused on safeguarding the well-being of workers.

1 Introduction

Kaizen, a method of business management aiming for continuous operational improvements through a bottom-up, hands-on, participatory approach, has been adopted by many Japanese companies. For example, Toyota, one of Japan’s leading automobile manufacturers, has adopted kaizen and calls it the Toyota Production System (TPS). The Japanese word “kaizen” is generally translated into English as “continuous improvement” or just “improvement.” However, its literal translation loses important connotations which are challenging to translate. This chapter discusses the meaning of kaizen, its significance in the context of international cooperation, and why this seemingly simple term is difficult to understand, not just for foreigners but even for Japanese people. This chapter first discusses what kaizen is and how it became an important policy tool in Japan’s ODA. Section 3 discusses why kaizen became an essential policy tool. Session 4 then identifies three reasons why it is challenging to understand kaizen. Section 5 provides a conclusion. Readers familiar with kaizen and its background may wish to skip Sects. 2 and 3 and directly go to Sect. 4.

2 What is Kaizen?—Continuous Operational Improvements Through a Bottom-Up, Hands-On, Participatory Approach

As described at the start of this chapter, Kaizen refers to “improvement” or “continuous improvement” and is also known as TPS. Kaizen originated from initiatives in Japan after the Second World War with strategic aid from the United States, as discussed later in Sect. 4.1.¹ After the kaizen's success in Japan, it was popularized in the United States by Imai’s (1986) English-language bestseller Kaizen: The Key to Japan’s Competitive Success. It was received with interest, and the Japanese word “kaizen” became a commonly used term in Europe and the United States. The interest generated by kaizen in the United States was attributable to the historical background of the era. The 1980s was an era of economic stagnation in the United States, and there was a sense of urgency: if US companies could not improve on Fordism, which had been the dominant approach since the Second World War, then they would no longer be able to compete with Japanese companies. In this context, kaizen was introduced as the essence of “Japanese business management” and advocated as an improvement on Fordism.

Kaizen has been variously defined within Japan and in the context of international development (Hosono, Page, and Shimada 2020; Ohno and Bodek 2019; Sonobe and Otsuka 2014; Imai 1986, 2005; Ohno 1982). However, the concept of kaizen as “continuous operational improvements through a bottom-up, hands-on, participatory approach” is common to all these definitions. As illustrated in Fig. 1, this concept is more easily understood in contrast to the “top-down, specialist-led approach” common in Europe and the United States, of which Fordism is a representative example.

Fig. 1

Differences between Fordism and Kaizen (prepared by the author)

Fordism refers to a style of production introduced in the 1910s by the automobile maker Ford. Fordism arose from the management philosophy known as Taylorism. Its salient points include a top-down approach, with management making decisions that workers then implement. Fordism was first introduced in an era of intense labor union strikes. The factory would cease production whenever Ford’s skilled workers went on strike. Fordism was devised to enable factories to continue operation by reducing the dependence on skilled workers. Specifically, work was deconstructed into “simple, repetitive tasks” that even relatively unskilled workers could perform in the following ways.

• 1. Each process was “standardized” or codified as a simple task that anybody could perform.

• 2. The time required and speed of each standardized task were measured.

• 3. A target time was set for each task. Ford was thus able to manage how many iterations each worker could perform within a designated time.

In this way, Fordism enabled factories to maintain efficient production by employing low-skilled labor without risking a broad group of skilled workers going on strike. The top-down approach is a feature of Fordism, with workers perceived not so much as autonomous actors but rather as subservient to the orders of their superiors. This aspect is very different from the kaizen approach.

Unlike in Fordism, workers in the kaizen approach are not units that can be replaced at will; instead, they participate in running the workplace through quality control circles (QCC), thereby raising their motivation. The QCCs are groups that voluntarily promote quality control activities on their own. Continuous, incremental improvements in work efficiency are achieved through a bottom-up approach to eliminating muda, processes or activities that do not add value (Ihara 2016; Shimada and Sonobe 2021; Hosono, Page, and Shimada 2020).²

The critical point here is to find ways to improve the “motivation (yaruki)” of workers on the factory floor (genba). The genba is seen not as the site of tension between management and workers but as a forum for obtaining workers’ agreement and encouraging autonomous work. This is quite different from Fordism’s approach of “segmenting and standardizing work to transform it into repetitive tasks.” Workers at the companies that inspired kaizen strive autonomously to find solutions to their problems on the factory floor (genba), even amid ambiguity, uncertainty, and imperfection.

At the core of kaizen lies a genba-centered philosophy (see Chap. 3). Rather than perceiving workers as units that can be replaced, the idea of kaizen is to empower workers to improve the company’s productivity rather than to replace them (Hosono et al. 2020; Shimada and Sonobe 2021; Shimada 2015). As Shimada (2017 and 2019) discussed, this approach is one response to the concept of “decent work” promoted by the International Labor Organization (ILO). Kaizen was influenced by the ILO’s Declaration of Philadelphia in 1944, which rejected the view of labor as a commodity and emphasized the importance of cooperation between management and workers to achieve greater productivity. This sparked the movement in postwar Japan toward “productivity improvement,” described later in this chapter.

3 Why Has Kaizen Become a Vital Development Policy in Recent Years?

Kaizen is also an important policy tool for the Japanese government’s Official Development Assistance (ODA). The late Prime Minister Shinzo Abe mentioned the importance of kaizen when he addressed the opening sessions of the Fifth and Sixth Tokyo International Conferences on African Development (TICAD) held in 2013 and 2016, respectively. He identified kaizen as a crucial way of supporting Africa through ODA. Subsequently, private-sector projects have expanded to support kaizen in many African countries, such as Ethiopia, Tanzania, and Ghana. These efforts are not limited to Africa. Beginning with kaizen support in Singapore, cooperation on kaizen has also been implemented through ODA in other regions in Asia, the Middle and Near East, Latin America, Eastern Europe, and elsewhere (Hosono et al. 2020; Shimada et al. 2013).

Neither is the use of kaizen in Japan’s international development cooperation limited to support for companies. It has also been adopted in the context of occupational training, health care (the Better Hospital Services program, for example) (JICA 2022), and a movement for improving living conditions. Essentially, kaizen has been implemented across various regions and sectors, especially in the US and Europe, and is crucial to understanding Japan’s international cooperation.

Two factors underpin the increased importance of kaizen as a policy for international development in recent years. The first factor is the reevaluation of industrial policy by international aid donors. Industrial policy is government policy intervening in a market, and kaizen is considered as one of a tool for industrial policy. In cases of international official aid, it is the government that introduces kaizen for private firms (Shimada 2015, 2017, 2019; Noman and Stiglitz 2015, 2017; Noman, Stiglitz and Kanbur 2019; Higuchi and Shimada 2019). There has been an increasing focus on guiding corporate managers in developing countries using kaizen as one aspect of industrial policy.

The reevaluation of industrial policy began with the World Bank’s revision of market fundamentalism (a neo-classical standpoint in terms of economic theory, often referred to as “the Washington Consensus”). Since the 1980s, the World Bank has argued that governments should not interfere in markets. To this end, it directed policies aimed at reducing the role of governments, advocating “structural adjustment financing” and “business climate improvement.” These approaches effectively dis-favored policies aimed at introducing kaizen as a part of government industrial policy.

The debate on industrial policy between Justin Lin and Ha-Joon Chang provided the catalyst that changed this approach (Lin and Chang 2009). At the time, Justin Lin was Chief Economist at the World Bank. Ha-Joon Chang, a Professor at the School of Oriental and African Studies, University of London, is renowned for his research in economic history, showing that industrial policy was the key to economic development in countries such as the US and the UK. He argued that industrial policy does not necessarily follow the country's comparative advantage (Chang 2002). After their debate on the role of governments, Lin advocated a neo-structuralist economic approach, proposing a more proactive industrial policy in line with the comparative advantage of a country (Lin 2014), but this was met with intense resistance from the mainstream economists within the World Bank, which opposed such intervention. Eventually, Lin chose to leave the World Bank. This debate continued to influence the aid community even after Lin’s departure from the World Bank. The Donor Committee for Enterprise Development (DCED), a major private-sector donor committee, also began discussing industrial policy following this debate.

At the same time, a series of research projects conducted by a group including Prof. Joseph Stiglitz (Columbia University), this author, and others began to discuss kaizen in contexts such as the revision of the approach to industrial policy and the consideration of approaches to development financing (Shimada 2015, 2017, 2019; Noman and Stiglitz 2015; Noman and Stiglitz 2017; Noman, Stiglitz, and Kanbur 2019).³ As part of this trend, the UK Overseas Development Institute (ODI) also produced a paper considering the role of kaizen as a tool of industrial policy (Lemma 2018). The reassessment of the importance of support for companies in developing countries—in the context of this revival of industrial policy by donors—was an essential factor underlying Japan’s more active implementation of kaizen support.

The second factor behind the increased importance of kaizen as a policy in recent years is the change in the tone of the development economics debate that coincided with the reevaluation of industrial policy. Until then, development economists had proposed that the economies of developing countries could not grow because of a lack of funding and technology (the gap approach). This approach changed with the spreading recognition of the greater importance of “management capital”—the ability to manage money, infrastructure, and technology and devise ways to generate profits from them (Bruhn et al. 2010; Shimada 2015; Shimada and Sonobe 2021; Mano et al. 2012; McKenzie and Woodruff 2014; Suzuki et al. 2014; Higuchi et al. 2019). The concept of management capital refers to the ability to manage a company. This could include kaizen.⁴ The acceptance of management capital produced a great deal of research, with organizations such as the World Bank also launching studies, which continue to this day (Dinh et al. 2012).

In this way, donors’ reassessment of industrial policy and the increased importance of management capital in development economics gave rise to the new focus on kaizen cooperation mentioned at the start of the chapter in contexts including Japan’s international cooperation. However, it is sometimes difficult to understand what kaizen is. The following section will discuss why it is challenging.

4 The Difficulty of Translating Kaizen

4.1 Can Kaizen Be Implemented Outside Japan?

The concept of kaizen is sometimes considered deeply rooted in Japanese history and culture. Indeed, it has been argued that it is impossible to comprehend kaizen without an understanding of Japanese culture. For example, Taiichi Ohno, who codified TPS at Toyota, characterizes the concept of kaizen as “difficult to grasp.”

It started as part of an attempt to develop original methods suited to Japan’s economic climate. Ideas that were practiced and emphasized in this context—like the “kanban” system⁵ and “automation” written with the addition of the character for “human”—were explicitly designed to prevent other companies, especially those in developed countries, from understanding them: to make it difficult even to guess at their meaning. In this respect, perhaps it is inevitable that they are challenging to grasp (Ohno 1978, p. 9; emphasis added by the author).

That is to say, Ohno characterizes kaizen as challenging to understand because it was deliberately made to be so. Takahiro Fujimoto (2001) criticizes this ambiguity, arguing that kaizen is neither necessarily a new concept nor unique to Japan, so he believes the popularization of kaizen as “Japanese” was an obfuscation. Rather, Fujimoto argues that kaizen is nothing more than the basics of industrial engineering (IE). Meanwhile, Womack et al. (1991) refer to TPS as a Lean production system (or Lean method) and conceptualize it as a more universal management method, not limited to Toyota. In light of this discussion, kaizen, far from being a difficult concept to grasp, appears to be a remarkably coherent management technique.

In other words, kaizen has been discussed in two completely different ways: on the one hand, as a “distinctively” Japanese management method, and, on the other, as a “universal” management technique. Likewise, in the on-site (genba) implementation of Japan’s international cooperation, there are two different approaches to the kaizen concept, depending on the project. For implementing some projects, it is considered necessary to teach about Japan's culture and other aspects, while for others, only universal methods such as the Lean production systems are taught. For this reason, there are often substantial differences between the content of projects, even among those referred to as “kaizen projects.” These differences also obfuscate the meaning of kaizen.

There are three reasons why these differences in content arose. The first reason is the dual origins of kaizen. The concept of kaizen has two separate origins. The differences in origins are reflected in the differences in the content of kaizen projects. The second is the business management differences between Japanese-style and foreign companies. The third is its context-specific nature. The following three sub-sections discuss each reason in turn.

4.2 Why Did These Differences in Content Arise?

First, this section focuses on the first reason mentioned above: the issue of the dual origin of kaizen. Two organizations—the Union of Japanese Scientists and Engineers (JUSE) and the Japan Productivity Center (JPC)—played a significant role in introducing the concept of kaizen to Japan. The JUSE focused on “quality improvement,” inviting Dr. W. Edward Deming from the United States, who introduced the quality control circle (QCC: small group improvement activities) method to Japanese companies. To this day, Dr. Deming's name is well known in Japan, and the prestigious Deming Prize is named after him, awarded to an organization for its implementation of TQM (total quality management).

By contrast, the JPC was established in 1955 to receive strategic assistance from the United States. The purpose of this assistance was not limited to “productivity improvement” but also explicitly incorporated “worker protection” to support labor unions. The aim of worker protection represents a significant difference between the JUSE’s “quality improvement” and the JPC’s “productivity improvement.” The following section will discuss the cause of this difference before examining how these kaizen concepts were implemented in international cooperation.⁶

The emergence of a strong worker protection theme in the JPC’s productivity improvement initiatives is attributable to their implementation as a part of the strategic assistance provided to Japan by the United States. This aid was provided in the Cold War context as an anti-communist policy. The United States aimed to keep Japan’s labor unions on side with the social-democratic “Western” side rather than with labor-friendly communist Soviet sympathizers. Rising wages were seen as one means to convince workers of the value of social-democratic capitalist principles rather than Marx’s communism (for detailed discussions of this point, see Shimada 2017, 2018a, b, c and Nakakita 2008).

From the end of the Second World War until the mid-1950s, Japanese companies were subject to antagonism between management and workers, with frequent strikes. The initial introduction of productivity improvement to Japan through US assistance in 1955 gave rise to a vehement backlash from labor unions, particularly the General Council of Trade Unions of Japan (JCTU, commonly known as Sohyō). Unions were deeply concerned that productivity improvement would lead to reduced employment. To reduce these concerns, labor union leaders were also sent to the United States along with corporate managers such as Taiichi Ohno, who, as Toyota’s Vice President, introduced kaizen to the company from the US. This was intended to reinforce the idea that productivity increases would be clearly reflected in workers’ pay and win over skeptical (“Soviet-leaning”) labor union leaders. As Japanese companies had an adversarial relationship with labor unions, they initially deeply opposed involving worker protection or labor unions in productivity improvement. However, at the insistence of the United States (especially the US Embassy in Tokyo), worker protection was included as an objective of US productivity improvement assistance to Japan.

Essentially, the differences between the JUSE and the JPC can be defined as a difference between the JUSE’s focus on quality and productivity from a management perspective and the JPC’s approach to productivity with consideration for labor unions.

These two original approaches are variously adopted in the implementation of kaizen projects. The kaizen initiatives currently implemented by JICA (Japan International Cooperation Agency) and other organizations in locations such as hospitals emphasize worker protection to prevent the infection of healthcare workers. In contrast, little mention is made of worker protection or labor unions in JICA’s kaizen projects targeting companies, partly because labor issues are often delicate. Thus, the approach adopted by ODA kaizen projects targeting companies is close to that initially espoused by the JUSE.

In fact, kaizen did not appear in the names of JICA projects until after the second half of the 2000s. Previously, such projects were all characterized as quality or productivity improvement projects. These projects came to be called kaizen projects as a part of domestic publicity to make them easier to understand for Japanese people. However, they rarely incorporate worker protection.

4.3 The Distinctiveness of Japan's System of Business Management

The second reason for the difference in kaizen comes from Japan's distinctiveness in business management. To consider this, let us first examine if kaizen is easy to transfer overseas. The answer is “yes and no.” To begin with, kaizen was initially introduced to Japan from the US as a management method aimed at improving quality and productivity. In fact, it is not a peculiarly Japanese concept but rather a universal management technique, as discussed by Fujimoto (2001). Thus, it can be introduced and transferred from one country to another. In this sense, the answer is “yes.”

However, not all kaizen aspects can be easily transferred, especially worker protection. Worker protection includes raising workers’ wages, improving occupational safety, and, most importantly, encouraging labor unions to form. This is not easy to transfer because of the significant differences between Japan and other countries in employment practices and labor unions. That is why the answer is “yes and no.” What are the distinctive factors of Japan’s system?

The Japanese business management systems can be summarized under three headings: (1) company-based labor unions, (2) lifetime employment, and (3) seniority systems. Unlike in many countries, where labor unions are formed across an industry or sector (industry-based labor unions), each labor union in Japan is formed in a single company (company-based labor unions). Many large companies in Japan have also incorporated a system of lifetime employment, where employees are expected to work at the same company from when they graduate from university until they reach the designated retirement age, often 60 years old. In addition, the compensation system is structured so that pay increases are based on seniority (age). These systems differ substantially, not only from those of Europe and the United States, but also from those used in developing countries. These are very different from other countries and make kaizen challenging to understand.

The relationship between employment and productivity is essential to understanding kaizen. An increase in productivity will lead to a reduction in the number of workers. Kaizen aims to increase productivity, which will result in fewer workers. Those who engage in kaizen will effectively put themselves out of a job. As stated at the beginning of the chapter, kaizen refers to “operational improvements through a bottom-up, hands-on, participatory approach.” Why, then, would workers be motivated to engage in this bottom-up, hands-on, participatory approach if it might lead to unemployment?

Japanese workers’ proactive engagement in productivity improvement is supported by systems such as lifetime employment (workers are guaranteed a job) and company-based—rather than industry-based—labor unions. Even if they have engaged in kaizen to improve productivity, their employment has been guaranteed. So they do not have to worry about their job even if they engage in kaizen. The nature of relations between employers and workers varies widely in developing countries where international cooperation projects are implemented. While some countries (such as South Africa and many countries in Latin America) have strong, organized labor unions, some do not. In some countries, workers are in a position to oppose management. In others, workers are at the mercy of overwhelmingly powerful employers. In this context, the worker protection aspect of kaizen, which is deeply rooted in the distinctive Japanese business management system, cannot be directly applied in a foreign context.

The description of the kaizen approach is often understood in Japan in relation to the existence of Japanese company-based labor unions, seniority systems, and lifetime employment. If a country does not guarantee continuous employment for workers, it is difficult for them to engage in kaizen because it might result in unemployment in the future. This is why the topic of kaizen, although it may appear simple to comprehend, requires an understanding of business management systems specific to Japan. In other words, even if kaizen has universal features, it also has distinctive Japanese features.

4.4 The Context-Specific Nature of Kaizen

As discussed so far, even in the Japanese domestic context, two different perspectives on kaizen have long existed: the corporate perspective of kaizen in terms of quality and productivity and the perspective of workers. This duality is linked to the ambiguity of the term and the various meanings that it has taken on.

The third reason why kaizen is challenging to understand is its context-specific nature. There is a pervasive attitude within the basic kaizen approach that “important on-site (genba) matters must be considered on-site (genba).” This genba-shugi (a belief in the hands-on or on-site approach) further obscures the meaning of kaizen (see Chap. 3, this volume). As discussed in the previous section, kaizen refers to efforts to find appropriate “on-site” solutions to improve productivity, in contrast to production improvements based on Fordism, a top-down approach, or formal solutions prescribed by experts. The direction of kaizen improvements is, therefore, completely unpredictable. This makes it a very challenging method from an organizational management perspective. At the same time, kaizen does not seek a “definition” or “formula” for its solutions but instead seeks to find “solutions adapted to the specific situation (genba).” Solutions will differ depending on the company and specific context.

For this reason, in any discussion of kaizen, it is necessary to understand the “context” to comprehend the term’s meaning. In other words, kaizen is not the “application of a predefined methodology” but rather “the discovery of solutions in the context of each company or specific situation (genba)”—not “logic” but “context.” In Japan, it is often necessary to “read the room” or “read between the lines” according to TPO (time, place, and occasion). This is undoubtedly also linked to the emphasis on genba at Japanese companies.

However, this overemphasis on the search for genba-based solutions also produces scattered effects rather than an overall logic. Despite its simple definition, the content indicated by the term kaizen defies clear description and has taken on extremely broad connotations. Consequently, kaizen has become an enigmatic term. This is not simply an issue of translation: the substance of kaizen itself is also plural and context dependent.

4.5 Criticisms of Kaizen

This chapter has identified three reasons for the challenging nature of translating kaizen. So far, this chapter has regarded kaizen as a useful management tool, but it also attracts severe criticisms in Japan. Though not issues of translation and definition, these conflicting perceptions also partly contribute to the ambiguity of the nature of kaizen.

Kaizen has been the target of criticism on two points: the intensification of labor and the bullying of subcontractors (Kamata 1973; Aoki 1978).⁷ The latter has become a social issue. Then Prime Minister Takeo Fukuda was even questioned about the matter at a meeting of the Budget Committee in Japan’s House of Representatives (Ihara 2017). These discussions are based on workers’ perspectives against kaizen, against the paternalistic tone of employers’ perspectives. The involvement of workers, which is essential for kaizen, occurs inside a company (or its union) and mainly among its permanent employees under lifetime employment. However, though lifetime employment is a general feature of Japanese management, a great many workers are not employed under stable work conditions. The demands from companies toward subcontractors have sometimes been intense. Rather than management pressuring regular employees, permanent employees, encouraged to raise productivity by their stake in the company, may pile pressure on temporary employees and subcontractors, who often feel as though they can be more easily cut.

This situation is further complicated by the fact that labor unions themselves have assumed different approaches. In some cases, conflicting standpoints result from two competing labor unions established at the same company, one dominated by company management—called the “subservient union (Goyō Kumiai),” and the other union called the “second union (Daini Kumiai),” which is more combative and archetypically closer to the communist party of Japan. The “subservient” labor unions prioritize adherence to the interests of corporate management. In many companies, joining unions was a crucial step for employees to progress in their careers. In the past, those who chaired such unions—Ichiro Shioji, Secretary-General at Nissan Union, for example—could acquire substantial power inside companies. In the case of Ichiro Shioji, his power was so mighty that he was even called a “labor aristocrat.”

At the same time, those “second unions” engaged in combative activities quite distinct from this cooperative approach to industrial relations, taking positions antagonistic to corporate management. Their stance on kaizen is also critical because it is regarded as intensifying the workload for workers and bullying subcontractors. Thus, even among labor unions, there was a difference of opinion on the assessment of kaizen regarding how employees should be made to work.

5 Conclusion

As described in this chapter, kaizen refers to a management method to achieve continuous operational improvement through a bottom-up, hands-on, participatory approach. However, kaizen is sometimes extremely difficult not just to translate but to understand for foreigners and Japanese people alike. Three reasons were identified in this chapter. First are the dual origins of kaizen: Dr. Deming’s “quality and productivity approach” articulated by the JUSE and the “worker approach” articulated by the JPC with strategic aid from the United States as an anti-communist policy. The existence of these two different streams has led to ambiguity in the term kaizen. The second reason relates to Japan’s business management system (lifetime employment, company-based labor union, and seniority system). Employment practices, which are a prerequisite for understanding kaizen, have historically been very different between Japan and other countries. The last reason is its context-specific nature. Kaizen seeks solutions adapted to the specific situation rather than predefined solutions. The term has multiple meanings but is frequently used without recognizing its ambiguity. Rather than being difficult to translate, it is difficult to understand the term unambiguously.

Though there is much-existing research demonstrating the effectiveness of introducing kaizen to developing countries, a few points must be considered regarding the transfer of kaizen through international cooperation. Japan is home to a characteristically Japanese style of business management centered on company-based labor unions, seniority systems, and lifetime employment. This differs substantially from business management systems in other countries. Worker protection in Japan has been premised on Japanese-style business management. Therefore, the worker protection aspect of kaizen cannot be transferred directly to other countries where conditions are different. Neither should kaizen in other countries be characterized in terms of how it is implemented in Japan. This is because of the inevitable difference in the level of commitment to, and by, the company between lifetime employees and other employees.

When introducing kaizen in a foreign country, it is vital to comprehend it in relation to differences in labor conditions and management practices. Cooperation based on the recognition of these differences will aid mutual understanding. Moreover, introducing kaizen overseas may not increase workers’ pay as it has in Japan. It is also uncertain whether employment will grow as a result. To improve the living standard of developing countries, it would be necessary to complement kaizen with some additional support in the area of worker protection, depending on the country’s situation. More research is needed on what kinds of worker protection are needed to support the kaizen approach.

Notes

• 1. For a detailed discussion on the Cold War and US aid to Japan on productivity improvement, please also refer to Shimada (2017).

• 2. The Toyota Production System (TPS) is a well-known example of kaizen. TPS has been defined by Taiichi Ohno, who codified it as follows (Ohno 1982): (1) TPS is aimed at thoroughly eliminating waste through kaizen; (2) TPS promotes “just-in-time” and the automation of all processes (Toyota uses a unique way of writing automation (jidōka), which includes the character for “human”); (3) In this way, TPS enables the visualization of the entire production line, and the identification of weak sections; (4) TPS involves the workers in running the workplace and resolving issues on the factory floor (genba). In other words, it is clear that TPS, like kaizen, refers to “operational improvements through a bottom-up, hands-on, participatory approach.”.

• 3. Stiglitz and Greenwald (2015), for example, lauded the role of kaizen (which they referred to as “just in time”) in creating a “learning society.” Otsuka et al. (2017) provided a new perspective on new theories of industrial policy through progressive empirical research on micro-economic factors such as kaizen, advocating the Training-Infrastructure-Finance (TIF) strategy. The TIF strategy emphasizes a specific sequence (order) of implementation with sequential support from developing human capital to building infrastructure and supporting finance.

• 4. This ability was traditionally treated by economists such as Solow (1956) as a residual (not an important factor) in the production function. Now, however, management capital has been reassessed as an “important factor in economic growth.”.

• 5. The kanban system is a method adopted by Toyota to manage production using blackboards and whiteboards (kanban). It is used to control the flow of products between processes to ensure just-in-time manufacturing.

• 6. Kaizen could be either labor-using technology or labor-saving technology depending how it is applied. Labor-using technology increases the productivity of labor but may not necessarily lead to unemployment. On the other hand, labor-saving technology reduces the number of labor once the technology applied.

• 7. Examples of the former include the reportage-style Automobile Despair Factory (Jidōsha Zetsubō Kōjō) by Satoshi Kamada (1973), who actually worked at a Toyota factory, and The Real Toyota (Toyota Sono Jitsuzō) by Satoshi Araki (1978). Examples of the latter include The Tragedy of the Toyota Production System—The Lament of Employees and Subcontractors: The “Kanban” People (Toyota Seisan Hōshiki no Higeki—“Kanban” Ningen ni Sareta Shain, Shitauke no Dokoku) by Koji Tatezawa (1985).

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