Company’s Social Systems and Organizational Culture


Social systems and the development of a company’s organizational culture are oddly very much intertwined. The basis behind this statement can be seen within the context of the development of organizational culture within a vast majority of Japan’s corporations and how it differs significantly from their counterparts within other countries.

Japan was chosen as the independent variable in this examination of the interaction between social systems and organizational culture due to how evident the various nuances of its local social system integrate into its corporate organizational culture and how different it is from the western model of corporate organizational development.

Thus, by examining the influence of Japan’s social systems on the organizational culture of the various companies within the country, a better understanding can be developed regarding how ingrained social systems are in organizational culture development. The dependent variables of this paper take the form of the social systems and organizational cultures of the U.S., the UAE, and China.

These examples will be utilized in conjunction with the independent variable to create a broad picture of the impact that social systems have on the development of organizational cultures within a country’s companies.

Seniority within Japan’s Organizational Culture

Within Japan’s social system, seniority plays an important role in social interaction and often has many “unspoken rules” when it comes to honoring the status of an individual who is older than you, whether they deserve it or not. This manifests itself within Japan’s social system through the use of the word “senpai” when referring to someone that is ahead of you within their informal mentor system.

In Japan’s social system, advancement within society is often based on seniority, wherein people who are older and have reached a certain level in society are regarded with respect. This can be described as a type of informal mentorship system wherein the “senpai” are often regarded as being superior based on their more extended experience and, as such, need to be respected.

This manifests itself within Japan’s organizational culture, wherein advancement is often determined by seniority and not necessarily capability. This differs significantly from the western model popularized through the American organizational culture wherein advancement is often based on capability and competence.

However, the primary reason for the development of the western organizational culture model is because the American social system is based more on competition and individual rights. What this means is that while the social system within the U.S. acknowledges that the average family is the primary population unit within the state, the fact remains that people in general still focus on getting ahead by themselves and not necessarily as a group.

This differs significantly from the social system within Japan, which focuses more on subservience to the majority and is distinctly a group mentality. It is due to the development of such a social system that the organizational culture within Japan has been modeled after the “senpai system” as I would define it wherein companies place a greater degree of importance on seniority and experience within the organization.

This manifests itself in cases where the opinions of younger employees are often not as well regarded within the company. This means that when it comes to meetings, the decisions of the senior management divisions often go unquestioned or uncontested which creates meetings that often take the form of younger employees merely agreeing with senior employees instead of challenging the ideas or concepts that they represent.

While such a system may seem to be at odds with Western organizational culture models and seems doomed to failure, it has served Japan rather well considering the amount of training that each employee go through that ensures that they are more or less on equal footing within their more competition oriented international counterparts.

The group mentality within Japan’s social system extends not only to its impact on promotions within a company but also extends to how decisions within companies are made. Normally, within the western organizational culture model, decisions that involve different aspects of company operations are unilaterally made by department heads on an as needed basis.

The same can be said regarding the decisions implemented by a CEO within the same model wherein he/she does not need to confer with all department heads for a decision to be made.

The same cannot be said for the organizational culture model within Japan wherein decisions are not made on a unilateral basis; rather, decisions are often done through group concessions wherein a particular recourse will not be put into effect unless all department heads agree with the various facets of the decision.

The inherent problem with this particular method of decision making and implementation is that unlike their American counterparts, there is a considerable amount of time between decision creation and implementation.

While such a method would normally be considered as highly inefficient within the context of the western organizational culture model, in the Japanese model, such a method of decision making is quite normal due to the group-centric mentality developed by its local social system.

Through this example, it can be seen that social systems do indeed have a distinct impact on organizational culture development wherein a company’s organizational culture model is often based on the social system that it exists in.

The UAE and Japan

Another example that should help to support the claim of this paper regarding the impact of social systems on organizational culture development comes in the form of the UAE and the development of the organizational culture within the region.

He organizational structure of most companies within the U.A.E focused on a more “top-down” approach when it came to dealing with employees and meeting company goals. Such an approach focused less on employee empowerment and more on the delegation of tasks and their subsequent completion.

The reason behind the development of such a system is due to the distinctively patriarchal culture that developed within the region. Such a social system brought forth a similar organizational structure wherein the focus is less on developing employees and more on task delegation. This is distinctly different from Japan’s group-oriented approach, which was brought about by its social system.

Comparison between Japan and China

When examining the local business markets of both the Japan and China, there are several interesting differences between the two which should be taken into consideration when it comes to examining the effects of social systems on organizational culture development.

First and foremost, what must be understood is that within China, societal culture blends with business culture in such a way that a large percentage of business to business marketing and selling is done along family lines. This is because the Chinese place a great deal of importance on maintaining familial ties as compared to Japan wherein such aspects do not factor as much when it comes into business dealings.

While such a system does create a certain form of stability and trust within the business to business dealings, the fact remains that this creates a relatively hostile environment for foreign businesses attempting to enter into business markets within China. While it may be true that there are numerous successful business dealings within the country between foreign and local companies, this does not reflect the rest of the business dealings within the country itself.

Not only that there is an unsettling trend within the country regarding technology transfers that should be taken into consideration before even considering business marketing. The same problems that have been noted within the case of China are not as prevalent within Japan due to how the concept of the “family model” in business dealings is not widely utilized in Japan.

There is a clear separation between family matters and business dealings with the local organizational culture treating the workers as Japan’s new “corporate warriors” with employees often spending more time within their company and fellow workers than they do with their own family.

China’s “Bandit” Culture

Seven years ago various Japanese and European companies such as Kawasaki Heavy Industries, Siemens, Alstrom, and Bombardier pioneered the creation of China’s high-speed rail system in the belief that they would gain access to a lucrative multibillion-dollar market.

Instead, the various business partnerships they had with local Chinese companies resulted in shared technology being utilized to establish new high-speed train companies that rival not only the foreign train companies within China’s domestic market but within international markets as well.

Any foreign company that establishes a production base within China has to deal with what is known as “shanzhai” or “bandit culture” in that their manufacturing processes will most likely be stolen, replicated and utilized to produce the same product at a far lower cost than the original.

It must also be noted that most banks within China are controlled by the state and, as such, due to China’s current domestic policy of supporting entrepreneurship should the business seem viable the individuals who have obtained the means of utilizing the stolen technology can in effect bankroll the start of their own companies with the full support of the government.

This creates an incredibly problematic situation for any company, even thinking of attempting to enter into business markets within China. It must also be noted that intellectual property rights are often not as strictly enforced within China as compared to other locations such as Japan and, as such, even though the technology has been stolen it is unlikely that the perpetrators will even be prosecuted.

The reason behind this is because China’s social system lacked the development of intellectual property rights, which carried over into its organizational culture.

The business to business market in Japan, on the other hand, has a plethora of different rules and regulations specifically preventing the theft of intellectual property rights. Not only that, business to business dealings are done mostly under the process of which business can provide the best product or service at the most affordable cost and, as such, is more conducive towards effective business partnerships.


It is based on the various examples that been shown in this paper that it can be conclusively stated that social systems do indeed impact the creation of the organizational culture within companies.