AUGUST 22, 2013

Shusaku Tani is employed at the Sony electronics plant in Tagajo, Japan, reports The New York Times(Aug. 17, 2013) front page story, but he doesn’t really work. For more than 2 years, he has come to a small room, taken a seat and then passed the time reading.  Sony consigned him to this room because it can’t get rid of him. His position at the Technology Center was eliminated, but Tani, 51, refused to take an early retirement offer in 2010 — his prerogative under Japanese labor law. So there he sits in what is called the “chasing-out room.” “I won’t leave. Companies aren’t supposed to act this way. It’s inhumane,” he states.

The standoff between Sony workers and management underscores an intensifying battle over hiring and firing practices in Japan, where lifetime employment has long been the norm and where large-scale layoffs remain a social taboo. Economists say bringing flexibility to the labor market in Japan would help struggling companies streamline bloated work forces to better compete in the global economy. Fewer restrictions on layoffs could make it easier for Sony to leave loss-ridden traditional businesses and concentrate resources on more innovative, promising ones.

Sony offered workers early retirement packages that are generous by US standards–severance payments equivalent to as much as 54 months of pay. But the real point of the rooms is to make employees feel so bored and shamed that they just quit. Labor practices in Japan contrast sharply with those in the US, where companies are quick to lay off workers when demand slows or a product becomes obsolete. It may be cruel to the worker, but it usually gives the overall economy agility.

This post provided courtesy of Jay and Barry’s OM Blog at www.heizerrenderom.wordpress.com. Professors Jay Heizer and Barry Render are authors of Operations Management , the world’s top selling textbook in its field, published by Pearson.