THE JAPANESE MANAGEMENT TECHNIQUES AND THE INDIAN COMPANY FINANCIAL PERFORMANCE: AN EMPIRICAL STUDY

Abstract

The use of Japanese management methods has been more and more popular among Indian corporations aiming at the efficiency of operational processes and financial stability. Kaizen, Lean manufacturing, Just-in-time and 5S are used as techniques that focus on continuous improvement, reduction of waste, and employee participation, and have been largely linked to the improvement of the performance of an organization. Though previous researches are mostly centered in the aspects of early adopters and operational performance, there is scarcity of empirical findings regarding the financial implications of the recent adoption of such techniques by Indian companies.

The paper under review discusses how Japanese management practices have been used within the past decade in three Indian auto companies, which are publicly listed, viz. Tata Motors, TVS Motor Company, and Ashok Leyland. The study examines the major financial metrics using secondary data of annual reports and financial statements including operating profit margin, turnover, and cost efficiency prior to and after the implementation of Japanese-inspired practices.The results show that there is a significant financial performance improvement after adoption of these techniques though the level of improvement differs across firms because of their differences in scale, positioning and level of adoption. The research adds to the world of knowledge about operations and strategic management as it offers recent firm-level data on an emerging economy. It also provides managerial implications on how Japanese management philosophies contribute towards improvement in the financial performance in the Indian industrial context.