Traditional Japanese Decision-making, or Ringi
The decision-making process in North American companies operates within a centralized system, and generally takes a top-down approach. In Japanese companies, however, the approach to making decisions is the opposite: it is bottom-up. This traditional and formal decision-making process, which is even now employed in Japanese governmental offices as well as companies, is called the ringi system.
In a typical Japanese company, to finalize a decision in the decision-making process, a proposal document is first created by a lower-level manager as a paper document with a written statement of proposal. This is then passed on to the manager of the next higher level of the company’s hierarchy, asking for approval of the proposal.
In a typical Japanese proposal document, several spaces, often in squares, along with the titles of those that are required to make approval, are provided at the top or bottom edge of the document. These spaces are for the individuals asked to approve the proposal document to place their seals. In Japan, a manager approves a proposal with a seal or stamp. Every office worker has a personal seal (hanko, in Japanese) engraved with his or her last name. (Some coworkers may have the same last names, but the seals are slightly different in the way they are engraved, so none of them are identical.)
Once the approval is made by the boss of the manager who made the initial proposal, the document is passed on to the manager of the next higher hierarchy, and this continues until the proposal document finally reaches the manager of the top level, or the president. In this way, all personnel can be involved and their opinions reflected in the decision-making process.
However, the problem is that since this process involves many people, it takes a lot of time until the final decision is reached. Decision-making has traditionally been done via the use of paper and sealing with an ink pad. Simply passing the document from one person to the next in the chain of approval can take a considerable amount of time.
Furthermore, the decision-making process can take even more time when members who make approvals are away from the office and do not have access to the document being circulated. If an employee is temporarily away from the office, the document has to be kept on hold until the employee returns to the office. When the employee is away for a long time—for example, goes on a business trip, or is working from a distant office—the company and the employee have to mail the document to each other by post. Consequently, what is normally a long process becomes even longer.
Typical North American Decision-making
In typical North American decision-making, recommendations may be made from the bottom up; however, most final decisions are made by executive-level management, in which a consensus is reached amongst only those upper level executives. Occasionally, decisions are made for internal political gain. As well, when a final decision is made by executives or managers, the decision is passed on to the lower levels in the hierarchy, with little or no opportunity for discussion. Employees at lower levels are simply expected to accept the decision and act accordingly.
Because most North American companies are focused on the bottom line and how decisions can impact it, the risk of making bad decisions—by employees without enough insight into a situation and its consequences—is to be avoided. Final decisions may even be made by only one top executive, without any discussion with departmental managers.
By contrast, in Japanese processes as described above, there is no individual decision maker per se; primarily, a document approval system is used, involving many tiers of the corporate hierarchy. These differences suggest that software applications, such as enterprise content management (ECM), should specifically cater to the workflows of the Japanese decision-making process.
General ECM Software Functionality
Consequently, some Japanese workflow software products have unique features. DocuWorks by Fuji Xerox and X-Point by Atled Co., Ltd. can scan and import paper documents and process them in the system. Therefore, the electronic documents in this software can look very similar to the traditional paper documents that used to be filled in with pens.
These software solutions also provide functions that allow the user to create and use electronic signatures to replace the traditional seals used to indicate approval in a proposal document. These signatures also appear similar to the traditional seals in their shapes and colors. The only major difference is that the user clicks on a button to place the seal on the electronic document. In fact, case studies show that because of the similarities with traditional document formats, users find it easy to shift from the traditional practices to the software’s digital practices.
DocuWorks fully supports the security issues involved in using these electronic signatures by providing a system with several levels of alert to verify that a signature belongs to the approver (if the user doesn’t click to verify the virtual stamp, the software flags the user). On the other hand, X-Point also gives users an option to scan and import images of their own traditional seals.
X-Point and HI Tatsujin Web by Hitachi Information and Communication Engineering, Ltd. allow users to change document flow routes by setting certain necessary conditions, such as the budget amount and the content of the application. HI Tatsujin Web can also send messages to the cellular phones and e-mail accounts of requested members to ask for their approval when they are away from their personal computers (PCs), thereby speeding up the decision-making process, as it isn’t necessary to wait for these employees to return to their PCs before their approval can be given.
Staffware 2000 by Nihon Unisys, Ltd. is helpful for decision-making processes involving a group composed of both Japanese and non-Japanese businesspeople. At the beginning stage of a proposal, a translation request is sent to appropriate translators by e-mail so that non-English speaking members can also be involved the decision-making process.
Benefits of Using a Japanese ECM for Japanese Business Culture
Japanese vendors have started to develop software products with this particular functionality in order to help shorten the time it takes to make a decision, as it is recognized that approving a suggestion in the paper decision-making process takes a long time.
Another benefit of this paperless decision-making process is that it contributes to environmentalism. If each step of the process of approving an idea or proposal can be done on-screen instead of on paper, a company can use less paper and less space to store files or documents. The company wins by saving money, and everyone wins because fewer trees are cut down and fewer other resources are used to make paper.
In addition, since these systems enable central control of all the documents, managers can organize and analyze decision-making processes more easily than with the traditional method. On the other hand, users can archive used documents systematically, and quickly choose appropriate ones as references by doing a search when creating new proposals. Furthermore, this centrally shared system allows all users to obtain timely information, which can help prevent miscommunication.
Even though the other functionalities of a Japanese ECM product may not be much different from North American ECM software, use of software that has been created specifically for the Japanese business culture has many benefits for Japanese businesses. North American software vendors wishing to expand into the Japanese market might consider adapting their products to suit the needs of Japanese-style decision-making.
Vitor, muito interessante. Repasse para o Alexandre, porque pode agregar na arquitetura.
Edu, olha que interessante.
Hello Vitor, Alexandre, e Edu,
Thanks for reading and commenting on our blog! If you have any questions, please do not hesitate to contact our Portuguese-speaking colleague (see contact information below).
Ola Vitor, Alexandre e Edu,
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Business Development Manager
E Luso Amiga
Very interesting and thought provoking article. Foreign Direct Investment in the US have been dominated by countries like UK, Japan, Netherlands and Canada and steadily on the increase. However the fastest growing in the 90’s has been Japan according to a study done by Cletus Coughlin a research officer at the Federal Reserve Bank of St Louis. This is both through “Greenfield Investments” meaning constructing production facilities in the US or just by acquisition of US firms. Outside of the trade impacts I was thinking purely how this is going affect software vendors in the US to have integrated Software solutions that incorporates the “Enterprise Content Management”(ECM).
This will allow for intuitive software solutions that accommodate Global companies to deploy consistent work-flow methodologies for paperless transactions whether in the US and/or outside the US.
Software Solution providers have barely begun to scratch the surface in capturing document work-flow through Paperless transactions for small and Mid size companies. I see this maturing in ease and sophistication as a recognized value added application with integration to Business and Back Office Software
I foresee ECM Solutions becoming an integral part of Business Work-flow methodologies as pioneered by the Japanese with “Bottom Up” or “Top Down” methodology used in the U.S., as so well articulated in the article above. ECM applications need to be configurable with strong integration with Software Solutions. Truly adding value to an End to End Solution for the US and companies across the Globe.
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