Japanese MNCs have been operating in Malaysia for long time and yet not many studies have been conducted on them and their activities in this country. Apart from management issues, problems faced by local managers are vital issues related to MNCs that needs to be addressed and researched intensively on a continual basis. This is because without local managers, Japanese MNCs would not be able to maintain and operate the subsidiary in accordance to their objectives and strategies in the near future. Local managers could be seen as one of the backbones that critically support the management of the Japanese subsidiaries if they are given equal opportunities in advancement. In this study, it was found that there is a significant relationship between demographic factors and its influence on perceived barriers to career advancement. The significant demographic factors were age and gender. The second part of the analysis found that there is a significant relationship between characteristics of the organization and its influence on perceived barriers to career advancement. The significant characteristics of the organization were size of the organization, age or years of operation and type of ownership. The last analysis revealed that there was a significant relationship between stereotype and discrimination and the number of local managers in higher management positions. Due to stereotyping and discrimination in Japanese subsidiaries, there are relatively fewer local managers advancing to higher management positions.
If Japanese firms refuse to allow non-Japanese managers into top executive positions in their subsidiaries, the problem of ethnocentrism will continue to prevail. Moreover if the trend does reflect a shift in Japanese firm’s management practices, there will be two important implications. First, there will be more management opportunities in Japanese subsidiaries for non-Japanese and by implication, even more competition for the existing supply of effective global managers. The second implication is that this trend represents a move towards genuine globalization for Japanese firms. On the assumption that localization improves subsidiary performances, many Japanese firms will become even stronger international competitors. For their North American, European and Asian competitors, it will serve as a wake-up call.
Japanese firms stand to lose out in the competition for global talent, if these corporations are reluctant to consider foreign talent for higher managerial positions. This is because the most talented people will not join an organization that holds out on no promise of promotion. Japanese owned corporations that have been notoriously slow to open their top executive ranks to non-Japanese will operate at a competitive disadvantage. Although it is too early to tell if Japanese firms are willing to open the most senior executive positions to non-Japanese, this research shows that at the subsidiary level, Japanese firms are still putting barriers to make it hard for local managers to advance.
There are two possible future scenarios associated with Japanese MNCs, their use of expatriates and their role in global business. According to Beamish and Inkpen, a possible scenario for Japanese FDI could unfold as follows. As Japanese firms continue to expand internationally, the shortage of qualified Japanese expatriates will force Japanese firms to hire more local managers for senior managerial positions. Enlightened firms also realize that the “rice paper ceiling” is an obsolete concept. Over time, Japanese MNCs will shed their ethnocentric biased attitude and hire the best managers they can find, Japanese or non- Japanese. Non-Japanese managers will find their way to the most senior executive ranks. As a result, Japanese MNCs become even stronger competitors around the world. This is a possibility that seems very far in the future, especially for developing countries like Malaysia, with developing local expertise in Malaysia. An alternative scenario is far less positive from a Japanese firm’s perspective. The inability to find high quality expatriates and the reluctance to abandon an ethnocentric view will limit Japanese MNCs’ ability to grow. The increasing use of local managers will impact only middle and lower managerial levels. Top management positions in both headquarters and subsidiaries will reserve for Japanese nationals. As a result, Japanese FDI will stagnate and probably decline. Japanese firms will gradually play a less important role in the global environment.
Research issues to be addressed
* If there is greater use of local managers, will Japanese firms be more willing to engage in international mergers and acquisitions?
* To what extent do Japanese subsidiaries want to eliminate the barriers local managers face and are interested in transferring knowledge to help educate local managers in developing countries like Malaysia?