Paper short abstract:

This paper pursues to shed light on the trend of retrogression of employee’s “voice” and progression of “silence” after the collapse of bubble economy from the 1990s in Japan and provide an implication that measures of employees’ involvement in decision-making process are needed.

Paper long abstract:

Based on the typology of social choices introduced by a German economist and thinker A. O. Hirschman’s “Exit, Voice and Loyalty” (1972), this paper pursues to exhibit the factors that made impacts on employees’ “voice” retrogression and “silence” progression in Japan during the post-bubble period after the 1990s by observing changes in shareholding structures, employees’ engagement in management decisions and their pursuit for better work conditions, weakening labour unions, and shift in employees’ “loyalty” to their workplaces.

With the hypothesis that overall change in corporate governance, labour economic, and organisation behaviour conditions have been roughly inducing retrogression of employee “voice” and progression of “silence” in Japan, deductive method was taken to validate the hypothesis that the environment of employees’ “voice” retrogression and “silence” progression in Japan became stronger during the post- bubble period after the 1990s.

The findings include evident trends of employee “silence” behaviours backed by weakening labour unions and introduction of merit-based human resource appraisal systems. On the other hand, there were factors that induced employee “voice” during the period, as companies concurrently tried to adopt more transparent and democratic ways of bottom-up or middle-up corporate governance measures, such as workplace governance committees, employees’ participation in executive and/or board meetings, and so called the 360-degree human resource evaluation systems.

While market and management conditions are changing and are putting pressure on employees’ proactive commitment, practical implication of this paper’s observation is to explain about the need in introducing measures for employees to engage in decision making process in various ways. It would hold true even more seriously as labour shortage can be expected in the future in Japan.

Meanwhile, this research does not intend to state flatly that Japanese employees had stronger degree of liberty under the period of so-called “Japanese employment system”. It is because “Japanese employment system” was not something that people achieved over fighting for their freedom but was rather a consequence of various concessional attempts reached after the ups and downs in the post- World War II period.

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