The TENTATIVE conclusion from the previous chapter in which the literature on Japanese organisations and institutional theory was reviewed is that, despite enormous pressure for change, most commentators observe that the Japanese system of employment has been remarkably resilient. An institutional interpretation would be that deeply institutionalised and socially embedded organisational practices are resistant to change. This conclusion, albeit tentative and subject to verification, has enabled us to establish a “baseline”, or context, from which we can measure the extent that practices diverge from the communitarian template when Japanese companies are taken over by foreign firms.

We now return to the main theme of this book, namely the investigation of the impact of foreign ownership and control on the HR and other organisational practices at Japanese organisations. The questions we laid out in the Introduction were: does a “institutionally distant” merger cause organisational change and deinstitutionalisation of communitarian practices? How are these changes perceived and internalised by employees? Finally, what are the contextual factors that affect the outcomes? In this and subsequent chapters I describe, based on the most recent literature, each of the main “domains” of the Japanese employment system, such as recruitment, training, reward system, and so on. Having examined both Japanese firms that were taken over by foreign firms (the “case companies”) as well as Japanese firms in similar industries that were not taken over (the “comparator companies”), I lay out my findings from these investigations categorised by domain so that the impact of foreign control can be more easily assessed.