Chapter Seven
Borrowing and Culture

The crow
imitating the cormorant
drowns in the water.
Japanese proverb

In the preceding chapter, I dealt with the centrality of foreign ideas in inspiring the introduction of small-group activities. I have yet to consider explicitly the role of culture in the transmission of ideas cross-nationally. It has often been argued that cultural differences inhibit the adoption of foreign modes of work organization, especially in the United States. In particular, some argue that the small-group activities developed in Japan are so closely wedded to their cultural origins as to be inapplicable to Western firms. We need to get a clear understanding of the ways in which culture is and is not a barrier to cross-national borrowing. My analysis leads me to the conclusion that culture is a barrier, but not necessarily in ways that are commonly recognized. The cross-national transmission of ideas and practices such as small-group activities is, in fact, a process of technology transfer, not fundamentally very different from the transmission of, say, steel-making technology.

In his pathbreaking study of industrialization Modern Economic Growth (1966), Simon Kuznets maintains that the increase in the stock of useful knowledge and the application of this knowledge are the essence of modern economic growth.^[1] This increase, he argues,

[1] This section draws on Cole 1980.

in turn rests on some combination of the growing application of science to problems of economic production and changes in individual attitudes and institutional arrangements that allow for the release of these technological innovations. As industrialization spread through the world, technological and social innovations cropped up in various centers of development. These innovations were the outcome of a cumulative testing process by which some forms emerged superior to others; each historical period gave rise to new methods and solutions. The economic growth of any given nation came to depend upon adoption of these innovations. Kuznets concludes by stressing the importance of the "worldwide validity and transmissibility of modern additions to knowledge, the transnational character of this stock of knowledge, and the dependence on it of any single nation in the course of its modern economic growth." Raymond Vernon has gone on to argue that the costs to nations of assimilating information from foreign countries have been greatly reduced. The propensity of technology to cross national boundaries is growing very fast, based on word of mouth, technical journals, patent applications, scientific meetings, licensing agreements, and communications among affiliates in multinational networks (Vernon 1986:100).

This book deals with the borrowing and adaptation of small-group activities, a social innovation. Although Kuznets speaks of both technological and social knowledge, his reasoning would appear at first glance to apply most forcefully to the realm of technological choice. It is here, one might think, that the selection of the most progressive technique will be made unambiguously in terms of cost-benefit analysis. For example, the blast furnace using a hot blast and a mineral fuel adopted in nineteenth-century America was clearly superior in terms of reducing costs and increasing productivity to its predecessor based on charcoal technology.

Yet even with "hard technology," uncertainty as to the benefits of new technology is typically a prominent feature of the innovation process. To pursue a more recent steel-making example, it took some time before the feasibility of the basic oxygen furnace, and therefore its relative advantages over blast furnace technology, became apparent (Lynn 1982). One can make a similar point with regard to the need to adapt a given technology to specific envi-

ronmental conditions. Thus, the basic oxygen furnace, which was developed in Austria, depended in part for its success on the availability of special heat-resistant bricks used to line the converters. The raw materials for bricks with these qualities were not found outside Austria. It was not until comparable heat-resistant bricks were developed outside of Europe that the basic oxygen furnace became economically feasible in North America and Japan. I distill two points from these brief observations. The success of a technological transfer process depends on the adopter, first, having the appropriate "know-how" and, second, having the requisite resources.

Application to Social Technology

With social knowledge and institutional arrangements, the situation is similar. Again, under the right conditions certain institutional arrangements are fairly rapidly grasped as being essential to economic progress. Consider the spread of the joint stock company, double-entry bookkeeping, and multidivisional decentralized management structures.

Many other institutional innovations, however, are not easily compared and evaluated vis-à-vis existing arrangements. Social innovations often interact with other processes in a way that obscures their respective contributions to economic growth. This was apparent in the ambiguous results of assessing the Swedish experience with small-group activities relative to the original managerial objectives for instituting them, Furthermore, the output of social innovations is often not as easily quantified as it is in the case of hard technology. Social innovations like small-group activities may have multiple goals, of which contribution to economic success is only one. Some advocates of small-group activities, for example, focus on their contributions to industrial democracy and worker satisfaction as ends in themselves.

The complexity and the lack of clarity in these relationships and the abundance of unwarranted inferences both lead to an element of fad in the adoption of social innovations. As a result, arguments are often grounded more in ideology and power relationships than in tested generalizations. It should be pointed out that such situations are by no means absent from the circumstances surrounding

the adoption of hard technology. In the course of evolving the concept of "satisficing," Herbert Simon and his colleagues studied the reasons companies bought computers in the mid 1950s. "The biggest argument for computers was because your competitor had one. . .. It was just pretty hard to show up at lunch without one."^[2] The inference that Simon drew from these observations was that the forces that result in the acceptance of innovations are not necessarily economic ones. Rather, economic decisions based on rational evaluation of carefully sorted and weighted criteria were no match for the emotion and excitement triggered by a technical or business innovation. We can see similar processes at work today as vendors "hype" the advantages to be achieved by adopting the latest technology. In the General Electric advertisement in appendix C, there is the not so subtle suggestion that those not jumping on the bandwagon will be left on the scrap heap of failed enterprises.

Viewed in this light, it should hardly be surprising that rapid diffusion of a particular social innovation may reflect such social and political considerations more than the economic superiority of the innovation in question (as measured in expected profit or transaction costs). We saw good evidence of these same phenomena in our discussion of the domino effect among supplier firms adopting small-group activities. Sometimes the claims to superiority of one social arrangement over another are cloaked in the language of objective social science. The task, for example, of evaluating the applicability of Japanese management practices in the United States and judging what the needed adaptations are is a herculean one. Many claims are made, often by those with vested interests. How is one to separate the wheat from the chaff? Can one identify "best practice," and, if so, how can one most effectively diffuse it? I shall deal with these matters in subsequent sections of this chapter.

One final introductory note is in order. Despite the seemingly greater difficulty in evaluating the objective costs and benefits of a social innovation, there is every reason to believe that once a decision is made to borrow, know-how and resources are just as critical to successful transfer of social technology as with hard technology.

[2] J. Williams, "A Life Spent on One Problem," New York Times , 26 November 1978, p. F5.

Culture as Obstacle

Kuznets's model of the transnational stock of technological knowledge provides a basis for recasting the way we think about the role of culture in cross-national borrowing. If his model holds for social innovations with an impact on economic growth as well—and I argue that it does—this suggests that culture is less a barrier than it has sometimes been portrayed. Rather, dealing with culture is part of the normal process of adapting an innovation that grew out of and was shaped by a particular environment to the conditions required for survival in a new environment. Sometimes this effort is relatively easy; at others it is complex, with a high risk of failure. Sometimes the know-how and resources are there to do the job; at others they are harder to obtain.

Notwithstanding, the view that cultural differences create impassable barriers, especially in the case of the borrowing of organizational practices, has a powerful hold. My initial task is not to suggest that this view is wrong in principle, but to understand why such views hold sway particularly in the United States. We can pursue the matter in the context of the discussions in the United States on the suitability of adopting small-group activities developed in other nations. We shall also have the opportunity to compare this response to the responses of the Swedes and the Japanese to similar ideas developed in other nations.

In the early 1970s there was modest interest on the part of American managers in the Swedish innovation of autonomous work groups. The general conclusion, however, was that they were not suitable for the United States. Economic factors, in particular the small scale of production in Sweden, were typically cited as factors making the transfer of such techniques difficult, if not impossible. A broader argument was that the cultural environment of Swedish managers was so different as to inhibit useful learning. Swedish managers were thought to be "soft" when it came to dealing with workers and unions—a common view was held by conservative American managers that in "socialistic Sweden they had given away the store." There was the further perception that profit and efficiency considerations were not as highly ranked as in the United States.

On a different level, in a Ford Foundation report, six UAW workers sent to Sweden as part of a work experiment reported that the workplace culture was not to their liking. They found the cultural environment inhibited "self-expression" and that it was harder to communicate with union representatives and superiors. (One cannot help but wonder how much language problems entered into these evaluations.) The reporter for the trip concluded: "Work reform in America can proceed only in the context of American life and culture. The study of work reform in other countries can broaden knowledge, but it does not supply a blueprint for replication" (Goldmann 1976:42). The overall tone of the report was quite negative.

With the benefit of hindsight, these observations are amusing. Not ten years later, the president of General Motors' Saturn project, William Hoglund, lauded Volvo, saying that it was the "industry innovator in humanistic production methods and worker relations" (Hamilton 1985:2). He might have added that in its attempt to leapfrog Japanese leadership in the industry, GM was using many approaches pioneered in Sweden, such as modular construction, automatic carriers, and self-managing teams. In Spring 1988 Volvo and Saab held a high level presentation for GM on its work practices. Apparently, as suggested by the loose-coupling model, "Timing is everything."

Similarly, there was an extensive debate in the United States in the early 1980s about the suitability of adopting Japanese work practices in the United States. Many have voiced the view that the unique group culture and strong work ethic of the Japanese make the adoption of such practices unlikely to succeed in our more individualistic culture. To take one expression of this view, Prakash Sethi, Nobuaki Namiki, and Carl Swanson conclude in their book The False Promise of the Japanese Miracle that "a group orientation based on coercion and perceived against individual self-interest, either as a social norm or as a corporate goal, has little prospect of succeeding in the United States" (1984:244). Strong words indeed.

A somewhat similar debate was taking place in Sweden in the mid 1980s. As the Japanese "wave" hit Europe after having rolled over the United States—and therefore having been partially re-interpreted through American experience—the question of the suitability of people-oriented management strategies such as quality circles to the Swedish environment was much debated. Oppo-

nents argued that Japan's authoritarian work culture was not consistent with Sweden's democratic institutions. The unions sometimes labeled new management ideas on work practices "Japanese-inspired" in order to discredit them.

Culture as "Non-Issue"

Working against this perspective of culture as an obstacle have been the reported experiences of Japanese firms operating in the United States with American workers. The U.S. mass media have seemingly delighted in showing how the Japanese managers have been able to transport their "more humane management methods" to the United States. Japanese and American managers of these plants have been quick to exploit and facilitate this interpretation. Marvin Runyan, the former head of Nissan in Smyrna, Tennessee, has been perhaps the most adept in this regard. Yet, the evidence of social science on the subject is quite sparse (most such companies are not eager to allow serious social science assessment of their practices and their effectiveness) and mixed at best. In a 1984 survey conducted by Columbia Business School and Coopers and Lybrand, a major consulting and accounting firm, only 10 percent of the 150 responding firms (a 20 percent response rate) reported that they were using quality circles (American Productivity Center 1984:6).

In these and other areas, the Japanese have, in fact, been quite cautious in applying their practices in the United States. This indicates that despite their own eclectic approach to borrowing from the United States, they were quite uncertain as to the applicability of their methods to the American situation. Japanese managers in Japan were generally puzzled by the seeming enthusiasm of their American counterparts for Japanese management practices; their own sense of the "uniqueness" of the Japanese experience made them doubt the transportability of their methods. Notwithstanding, it became typical in the late 1970s and early 1980s in the United States to rebut claims that we could not borrow from the Japanese because of cultural differences by citing the experiences of the Japanese in the United States. By the mid and late 1980s the Japanese had become more confident of their ability to export their techniques for use with an American labor force, and the idea that

we could not borrow from the Japanese because of cultural differences weakened among both Japanese and American managers.

The Reaction Sets In

The initial enthusiasm for things Japanese in the late 1970s and early 1980s was based on the view that the Japanese had found a better way. Their methods were presented as a strategy of human-resource management for restoring productivity increases and quality, thereby reinvigorating our economy. William Ouchi's Theory Z and Richard Pascale and Anthony Athos's The Art of Japanese Management capitalized on and contributed to these views (Ouchi 1981; Pascale and Athos 1981). The 1979 NBC documentary If Japan Can, Why Can't We ? received enormous circulation, with many companies renting the film to show it to their employees.

As these ideas moved down to the office and shop floor, however, it was found that American workers and managers had little tolerance for being told that the Japanese did everything better and that we ought to learn from them. During the height of the deep recession of the early 1980s, such talk tended to induce a sense of helplessness on the part of many managers ("We just can't compete with those guys") and anger on the part of many workers. In this sense, the issue of cultural differences as an inhibiting factor reappeared.

As a result, advocates of small-group activities quickly moved to purge these ideas of any connection with Japan. We were told that Americans, not the Japanese, had really invented quality circles (just as the Russians have had a chauvinistic need to claim that most important inventions emanated from Russia and not the West). One common version is that William Edwards Deming taught the Japanese quality circles. The facts of the matter are quite to the contrary (Cole 1987). To Deming's credit, he has never claimed otherwise.

In another claim, quality circles are equated with the Scanlon Plan, developed by Joe Scanlon in the 1930s (Cartin 1981:550-53). The fact that Scanlon Plans typically do not have a problem-solving mechanism such as lies at the heart of the QC circle process is conveniently ignored. Still others stress the checkered history of labor-management cooperation in the United States as evidence that "quality circles are a contemporary form of . . . recurring

labor-management cooperation" (Mitchell 1987:56-66). Even if there were similar organizational inventions at some U.S. companies, and surely there have been such cases, the compulsion to stress these similarities is in itself revealing. One could just as well reflect on why these isolated examples did not crystallize into a broad pattern of institutionalized behavior.

Yet one seldom sees such analyses. Instead, often-belligerent declarations on the U.S. origins of Japanese organizational techniques testify to the strength of the view that foreign ideas rooted in different cultures are unsuited for use in the United States. One should see statements claiming a U.S. origin for QC circles in terms of the myth-building process required for American managers to be able to borrow the QC circle idea from Japan. It was easier for American managers to think in terms of "borrowing back" than it was for them directly to swallow borrowing from a foreign competitor. This was especially the case when the borrowing reflected so negatively on their past management style and when pride had been hurt by a former student who was suddenly "beating their pants off" in the marketplace.

Some leading U.S. quality-circle consultants have aggressively stated in public forums that we have nothing further to learn from the Japanese. The basic training manual of the International Association of Quality Circles (IAQC), the leading promoter of quality circles in the United States, does not mention Japan once. This was the result of a deliberate decision to eliminate any mention of the Japanese origins of circles (the materials were originally developed by General Electric for use in its facilities). Similarly, the standard information package used in 1984 by the IAQC does not once mention Japan. One of the brochures in the package does, however, include a list of companies in the Western world that have adopted circles.

Pragmatism and Borrowing

From a cultural point of view, it is important to note that while Japanese managers adapted foreign ideas to their own needs as they saw them, they felt little need to naturalize them for the sake of avoiding "foreign pollution." As we have seen, American management was held in high esteem, and any adaptation could thus

proceed on relatively pragmatic terms. The Japanese have, of course, a long history of borrowing ideas from foreigners, most notably from the Chinese in the premodern era and from the West over the past one hundred years as they sought to "catch up" with the advanced industrial nations. Based on these historical experiences, they have institutionalized a highly eclectic approach to learning.

My point is not the earlier one, that the Japanese (and Swedes) have a greater tendency to search out foreign ideas, but rather that, given equal response to a foreign idea, the Japanese and Swedes seem to have less need to naturalize it for reasons of national pride than do Americans.^[3] In the case of their quality-control efforts, the Japanese have been only too happy to give credit to their foreign mentors, William Edwards Deming and J. M. Juran, and to deliberately downplay their own accomplishments. The use of the well-known Deming Prize in quality to further spur company improvement efforts provides a case in point.

In contrast to the materials of the IAQC, the widely distributed handbook of the Japanese Union of Scientists and Engineers, QC Sakuru Koryo (General principles of the QC circle), makes immediate mention of the origin of quality circles in Western ideas of statistical quality control. It discusses how these ideas were then modified and adapted to the Japanese climate by the development of the concepts of "companywide quality control" and "total participation." The Japanese continue to send teams of quality-circle leaders and professionals to the United States to study American progress in this area. Similarly, the Swedes continue to study and send teams to research American approaches to sociotechnical design and participation, though an independent assessment would conclude that both the Japanese and the Swedes were well ahead of American efforts in these areas.

This pragmatic approach gives the Swedes and the Japanese an advantage over those whose foreign borrowing concentrates on pu-

[3] I hypothesize that this distinction applies more to ideas affecting existing social and power relationships than to more economic and technical ideas. The latter are often seen, at least initially, as less threatening. Thus, there was less resistance to borrowing "just in time" delivery (a "pull" system of production and inventory control developed by the Toyota Motor Co.) from the Japanese than quality circles.

rifying foreign influences. It would be hard to imagine the Americans adopting an "Ishikawa Prize" named after Ishikawa Kaoru, considered the father of quality circles in Japan, to reward the U.S. company with the most effective QC circle activities. Indeed, the National Quality Award signed into law by President Reagan in August 1987 is dedicated to Malcolm Baldridge, a former U.S. secretary of commerce. Beyond the initial visits by American executives to see how circles worked in Japan, there has been relatively little serious sustained investigation by American firms and consultants of how circles operate in Japan, how they fit into broader organizational practices, and how the Japanese have coped with motivational problems and ritualism. The exceptions to this statement are to be found mostly when viable partnerships have existed between American and Japanese companies, such as between Ford and Mazda and Fuji and Xerox.

In summary, the Japanese experience has not been used very effectively as a learning laboratory. For example, one would be unlikely to conclude from the popular U.S. literature on participation in Japan that a well-institutionalized labor-management consultation system is central to its operation. Even companies that have borrowed directly from this approach, such as Ford, feel a need to go to some lengths to conceal its Japanese origins: Ford calls its labor-management consultation program "mutual growth forums." It is not without interest to speculate why it is that Americans have generally showed so much interest in quality circles and so little interest in formal labor-management consultation systems. Certainly, a major factor is that U.S. labor unions have generally been unwilling to take responsibility for business decisions and be accountable to the membership for their decisions, while management is not willing to give up control. Circles, by contrast, are seen to constitute nice, safe, clearly defined packages. In a similar vein, relatively few American companies have explored the link in Japan between participation in small-group activities and job security.

I do not need to belabor the point further. Clearly Americans feel a strong need to indigenize quality circles. In so doing, managers minimize, if not eliminate, the Japanese origins of the concept. The danger is that this reduces their opportunities of learning from the "available stock of transnational resources." This, in

turn, becomes disadvantageous for competitive economic performance. Thus, contrary to the popular wisdom, a major cultural barrier to borrowing Japanese small-group-activities approaches is not their rootedness in group-oriented Japanese historical experience. Rather, it is our own reluctance to seriously examine foreign ideas and practices in the area of worker-manager relationships that inhibits the learning process.

The Importance of Local Invention

I have documented the way in which resistance to foreign ideas and practices has been a significant cultural barrier in the United States to the adoption of small-group activities based on the Swedish and Japanese models. This does not exhaust the cultural obstacles. Another major cultural barrier is the failure to recognize the critical need for participants to have a sense of "local invention" at the national, firm, plant or office, and workshop level. Here I deal primarily with the national level. This is a cultural issue because it rests on the degree of discretion those in authority are willing to give to subordinates to initiate policy. Ultimately such willingness rests on the degree of trust and confidence that those in authority have in their subordinates.

Why is local invention so important, and how are we to understand this term? For the responsible parties to be effectively motivated to adopt the innovation in question, they must have a sense of having contributed to its invention. This is especially the case where participation per se is the desired social arrangement. Pure copying of someone else's solutions does not contribute to a sense of ownership, which produces commitment to the new activity and is thus critical to the success of the borrowing. Moreover, local adaptation (that is, invention) is also central to success because each adopting unit is unique and has unique problems.

We would do well at this point to recall the earlier discussion of technology transfer. My stress on the importance of know-how and resources in securing technology transfer accords well with the way many social scientists have come to treat the concept of culture and tradition (cf. Eisenstadt 1973). That is, we may interpret the concepts of know-how and resources broadly to include symbols, ideology, and the generalized societal codes that provide a basis for

social action. They would, for example, include the kinds of authority relations and the kinds of interpersonal skills necessary for small-group activities to succeed. Culture provides a map of understandings that serves as a guide to social behavior. This map shows us how to proceed by outlining the options and how to value alternatives. Viewed in this light, culture becomes an obstacle to the extent that the adopter lacks the necessary know-how and resources to make the social technology work in its new environment. Know-how and resources constitute "local knowledge." This is the heart of the cultural barrier to borrowing.

The significance of this point of view is that contrary to the simplistic use of the term by many economists, there is, in principle, no such thing as diffusion of best practice. At best, there is only diffusion of best practices, practices that evolve in the course of their diffusion. Contrary to popular wisdom, there are times when it pays to reinvent the wheel! My stress on the importance of local invention grounded in local knowledge may appear less strange if we keep in mind that organizations themselves are social inventions designed to capitalize on the advantages of cooperation. Not surprisingly, changing them through "borrowing" thus involves further social invention. In many companies, top managers of highly centralized corporate structures have prescribed the form of small-group activity in a way that inhibits local invention. Each unit is instructed to do things in the same way, thereby reducing local spontaneous adaptation.

Devendra Sahal (1981:4), a sharp observer of the diffusion process, shows how significant innovation through adaptation to local needs occurs in the course of diffusion. He stresses that one of the problems with the contemporary theorizing of economists on the diffusion of technology is that it assumes that characteristics of the initial "innovation" do not change in the course of adoption. Many students of organizational behavior have, on the other hand, been quite sensitive to the way in which innovations are transformed as they move from invention to adoption to implementation (March 1981:569). As discussed later in this chapter, changes take place in the characteristics of the innovation as it diffuses, thereby affecting the rate of adoption. These observations allow me to append an earlier conclusion. While cultural barriers in terms of the historical rootedness of social ideas and practices may be less of a

problem in cross-national borrowing than commonly thought, the process of technology transfer is itself rather more problematic than commonly recognized.

Moreover, the additional innovation brought about by diffusion often creates new uses for the innovation. This, in turn, affects the extent of the adoption as well. In that context, I have mentioned both the development of the physical technology of heat-resistant bricks associated with the use of the basic oxygen blast furnace and the case of the social innovations involved in transforming Western ideas on quality control into the concept and practice of quality circles. By evolving into circles, formerly elitist quality-control ideas could be adopted by a whole sector of the labor force that had hitherto been excluded from involvement. By way of contrast, I have suggested how in Sweden managers saw the democratic ideas of the Tavistock researchers as threatening, and thus sought to purge them of their radical implications. While this facilitated initial acceptance by managers, thereby ensuring some significant diffusion, it also drained the movement of long-term, spontaneous support on the part of workers and the unions.

Some Examples of Adaptation in the United States

It is clear that adaptation is involved in fitting an innovation into the new environment in which it is expected to operate. This is true both of physical technology, where different factor endowments (different costs of land, capital, labor, etc.) press adopters to use the technology differently, and of social innovations. Perhaps the clearest example of this process in the material under consideration lies in the evolution of the name of this small-group activity in U.S. companies. In Japan QC sakuru (quality-control circle) is the standard term (though even in Japan companies may have their own terminology),^[4] reflecting above all the strong linkage of Japanese circles to the total quality control (TQC) movement, which stresses all-employee and all-department involvement in quality im-

[4] That they use Western terms for the activity is in itself quite extraordinary (though quite characteristic as well).

provement activities. In the United States many companies found that the name neither sat well with workers and unions nor conveyed sufficient breadth and importance. With regard to the former, the term control tended to have coercive connotations in the American context that were not what the promoters wanted to convey. As for the latter, quality-control departments often conveyed an image of narrow departmental and professional concerns in U.S. companies. Moreover, as noted earlier, they commonly had low status in the management pecking order. Quality circles thus came to replace quality-control circles as the preferred term. Moreover, as we have seen, companies adopted a wide variety of other names as well. In part, this was to avoid branding the technique as Japanese, but broadly speaking, it was part of the local invention process described above.

On a more substantive level, a variety of adaptations by U.S. firms can be noted. Whereas for the Japanese QC circles evolved in the course of quality-improvement efforts, in America they were introduced as part of the initial attempt to reinvigorate quality standards in many U.S. companies. QC circles also arrived in the context of an indigenous quality-of-work-life (QWL) movement in the United States, and the participation theme was thus quite naturally given high emphasis in many industries. American firms typically created the post of facilitator to apply human dynamics techniques. We have seen that the statistical component of the problem-solving skills has not been as prominent in U.S. efforts to date. Still another feature of U.S. methods relative to Japanese ones is the former's heavy reliance on consultants. For the moment, let us focus on yet another difference, the degree of voluntarism, to illustrate the tensions between different adaptive national responses and universal requirements.^[5]

U.S. firms acted initially to adapt the "all employee participation in circles approach" of the Japanese to fit a more voluntaristic model. There was much greater opportunity for employees to choose whether or not they wanted to participate in circle activity

[5] Wayne Rieker, the initiator of quality circles at Lockheed Air Missile and subsequently a leading consultant on quality circles, arrives at a rather similar list of adaptations (Rieker 1984).

(though not necessarily for managers) than was the case in Japan. The idea was that one would be working with truly motivated participants if participation was voluntary.^[6]

This stands in significant contrast to Japanese practices, where as we have seen typically over 90 percent of employees participate in circle activities. The Japanese do, in fact, stress the importance of voluntarism in making circles work in their literature, but they simultaneously stress all-employee participation. JUSE's handling of the matter in its handbook makes clear that it saw the reconciling of the two principles to be a matter of some difficulty. Consider the following tortured language:

Voluntary Participation by Everyone

Is it not a violation of the rule of "initiative," if some people, who [have] indicated that they do not like to participate, are still urged to participate? If it is clear that those people are reluctant to participate just because they are lazy, egotistical or conservative, they should be rightly encouraged to participate in QC Circle activities.

There are some people, however, who are individualistic by nature, and like to do their job without interference from others. . .. [But] the trend in the manufacturing workshop is such that no single person, however well he can perform his job, can fully satisfy the requirements now imposed on the workshop. It is no longer enough to "mind one's own business." The gathering of skill, technology and knowledge is a prerequisite of doing a job successfully in the workshop. Individual voluntary actions can be displayed on top of that.

Those who prefer working in solitude can be attracted by QC Circle activities, and participate on [sic ] their own will, if the circles can successfully create a magnetic atmosphere, and if those people are properly guided and persuaded to participate.

(JUSE 1970:55-56)

The different approaches taken by Japanese and American managers reflect differing norms and expectations, in part growing out of cultural differences. For the Japanese, voluntarism refers less to the individual employee's decision to participate in QC circle activity than to the relatively autonomous nature of peer decision making in circle activity, independent of normal line authority

[6] One of the few U.S. companies in the late 1970s that made circle participation obligatory in some of its units was Honeywell Corporation.

relationships (Lillrank 1985:5). At still another level, American unions have strongly stressed the voluntary principle in determining whether to support circle activity. Without such guarantees, they would have been far more hostile. Japanese unions, on the other hand, have shown relatively little interest in such concerns, except for protecting workers against compulsory overtime.

While Japanese managers use the rhetoric of voluntarism, it is apparent that in many companies strong management pressures, and peer pressures manipulated by management, make it difficult for workers to refuse to join in QC circle activity. The proper guidance and persuasion called for in the last sentence of the quotation above often takes the form of quite heavy-handed management pressures on workers to participate. Moreover, the autonomous nature of circle activities is often sacrificed through management manipulation of circle theme selection.

A 1975 Japan Employers' Association survey reported, for example, that of those enterprises involved in various types of small-group activities such as quality circles, 43 percent used performance in these activities as a factor in personnel assessment (cited in Tokunaga 1983:324). What employee wanting to get ahead in the corporation and impress management would refuse to participate under such circumstances? Here we see a good example of my earlier point about the subtle interaction between competition among individual workers and group activities.

Statements about differences in pressure applied by different management systems are, of course, relative. A leading promoter of the Japanese movement responded to my observations on this by commenting: "If you want to see pressure on workers to join circles, you should see the Koreans!" Over time, as the process has become institutionalized, the Japanese have moved in some respects toward a more voluntaristic model, especially in the selection of themes, quota requirements for suggestions, and actual participation in circle activities. The process is far from complete, however, with other pressures of institutionalization pushing toward ritualism and enforced conformity.

Indeed, in recent years new adopters of circles have taken a much more heavy-handed approach to getting employees to join circles. One Japanese observer refers to it as the "carpet bombing approach," alluding to the tactic in which planes are lined up in

tight formation and go back and forth over the target leaving no area uncovered. In a similar fashion, circles are targeted by top management and no employee is left with a choice. Typical is the case of the Sanwa Bank, which set off a wave of quality-circle activity in the banking industry in the early 1980s. The president, Akashi Toshio, was persuaded to attend a week-long JUSE seminar on QC circles in 1979. Ishikawa Kaoru was invited to give a series of lectures, and he stressed the importance of top management support. Akashi was so impressed that he put all his executive vice presidents through circle training. This process was repeated down the organization until no one was left unexposed. Within a year, there were 2,400 circles in the bank, with some 13,000 members. In my interview with bank officials at the time, they indicated that this constituted about 99.4 percent of eligible employees. All this stands in sharp contrast to the early days of the movement, which had much more of a bottom-up quality to it, with a strong emphasis on persuading workers to join of their own free will. In summary, we see a tension between the benefits resulting from ensuring that all employees in a workshop participate and the benefits resulting from spontaneous contributions.

In the light of this discussion, it is not surprising that by the mid 1980s many U.S. firms were beginning to reassess their voluntaristic approach.^[7] As one manager reported to me: "I have 15 percent of all my hourly employees in circles, but we seem to have hit the ceiling for volunteers and now I am worried about a loss of momentum." If a major objective is to build teamwork and communication in the workshop, then the typical American approach of having mixed workshops, with some in circles and some not in circles, seems unlikely to produce the desired outcome. By the mid 1980s, partly as a consequence of such concerns, firms were increasingly pushing mandatory involvement. As experience with circles and other forms of team building grows in the United States, we can expect more companies to take the position that teams are a part of normal job design, and that workers are therefore required to participate.

It is unlikely that the U.S. and Japanese approaches will con-

[7] See the "point-counterpoint" debate between Wayne Rieker and Harold Kay on this (Rieker and Kay 1985:6-7).

verge. Nevertheless, the pressures for differentiated responses to divergent organizational environments are balanced to some extent by pressures of a more universal nature. In both Japan and the United States, for example, we find managers struggling to balance the need to ensure exposure and teamwork against the need to develop and maintain spontaneity. Such universal imperatives will keep the two countries' efforts from diverging too sharply over the long run.

In conclusion, adaptation to local conditions, using local know-how and resources, is essential for successful technology transfer. By adapting to local conditions, one ensures the commitment and motivation necessary to drive the innovation forward. In the example of voluntarism, different cultural standards in Japan and the United States lead to different choices and opportunities as managers work with the resources available to them. At the same time, we see that attention must also be paid to certain universal factors, lest the borrowing process so bastardize the original innovation that its intrinsic benefits are lost.

The imperatives that derive from the universal aspects of a process have other implications for borrowing. This becomes clear when we examine the actual process of borrowing as it relates to quality circles in the United States and Japan. The experiences of Nissan in Smyrna, Tennessee, are a case in point. Prior to the initiation of QC circle activity in late 1983, the manager of organization development, Steve Neuman, was sent to Japan for training in the circle procedures and practices of the parent company. He came to realize that the activities in the parent company reflected a mature movement with some 4,000 circles and 99 percent participation in circle activities. Some circles had existed for as long as ten years, and it was not considered extraordinary for a circle to take a whole year to work out a solution to a complicated problem.

In one project the American manager observed, the circle was seeking to prevent wrong gaskets from being put on an engine. It turned out that this happened only three times a year (though with disastrous consequences for the operation of those three engines). He concluded that the problems the Japanese were working on were simply of a different nature than those that would be experienced by the Smyrna workers and managers for the first few years of QC circles. "They were working with a different part of the

curve." In contrast, he was wrestling with problems that the Japanese had dealt with over ten years before. How do you elicit middle management support? What is the best way to teach employees quality-circle procedures? How do you get employees to apply their training skills?

We can see from this concrete example both the difficulty of direct copying and the fact that the difficulty lies not only with cultural differences but with the differing imperatives arising from different stages of experience. Most American companies adopting QC circles did not have this direct pipeline to a Japanese company. The typical short-term visits of American executives hardly gave them time to figure out the right questions to ask, much less to get the right answers. What they generally see when they take their quick tour of Japanese plants is the result of some ten to twenty years' experience. Witnessing current practices does not provide much guidance as to how the Japanese got there.

Conclusions

We may return now to some of the original questions raised in this chapter on the role of culture and borrowing. Social scientists tend to operate with a holistic model; the suggestion that borrowing of social practices can take place on a selective basis tends to do violence to their perspective. The following quote from the 1984 report of MIT's International Automobile Program captures this view:

The impressive success of the Japanese has led many in the West to argue that their own industrial relations systems should be reshaped to imitate Japanese practices. The lifetime-employment system and the use of quality circles have been singled out for much praise and some emulation.

The difficulty with adopting individual Japanese practices is that the various features of an industrial-relations system interact with one another and may not be separable from other features of the total system. For instance, the method of setting pay interacts with the union representation structure (enterprise-based bonuses are supported by the system of enterprise-based unions in Japan) and also the form of worker participation. Even if they chose to, it may not be possible for Western producers and unions to adopt Japanese industrial-relations practices in a piecemeal fashion.

(Altshuler et al. 1984:215)

Underlying this argument is the view that if you borrow a discrete practice, you are pulling it out of a complicated and highly interdependent social nexus. In so doing, the further assumption is that the practice itself will not survive transplanting to the new environment. Interestingly, this viewpoint does not get applied to physical technology, which is assumed to be different from the transfer of social practices. Yet physical technology is ultimately made up of "know-how," and what is more social than that?

The thrust of the argument in this chapter is that the ability to borrow discrete bits of hard technology applies to social innovations as well. In both cases, the proper application of know-how and resources (local knowledge) can be brought to bear to adapt the practice or equipment in question to its new environment. The pattern of Japanese borrowing of American ideas of statistical quality control, leading eventually to circle activity, well demonstrates the possibility of borrowing highly discrete practices. It also reveals a process in which the original ideas or practices are literally ripped from their moorings to create something almost entirely different in the new environment. As paradoxical as it may seem to people accustomed to equating borrowing with imitative copying, borrowing is, above all, an act of social invention .

As if to demonstrate this process in the extreme, one Japanese scholar has spoken of "creative misunderstanding." What he has in mind is situations where because of language difficulties and cultural differences, the Japanese misunderstood what they saw, but found some way to borrow what they thought they were seeing and to make sense of the practice in their own environment. Lest this sound a bit too cute, we would do well to return to the insightful analysis of Thorstein Veblen, an astute observer of the process of German borrowing from England and Japanese borrowing from the West. Writing in 1915, this son of Norwegian immigrants stated:

The interposition of a linguistic frontier between the borrower and creditor communities would still farther lessen the chance of immaterial elements of culture being carried over in the transmission of technological knowledge. The borrowed elements of industrial efficiency would be stripped of their fringe of conventional inhibitions and waste, and the borrowing community would be in a position to use them with a freer hand and with a better chance of utilizing them to their full capacity, and also

with a better chance of improving on their use, turning them to new uses, and carrying the principles (habits of thought) involved in the borrowed items out, with unhampered insight into farther ramifications of technological proficiency. The borrowers are in a position of advantage, intellectually, in that the new expedient comes into their hands more nearly in the shape of a theoretical principle applicable under given physical conditions; rather than in the shape of traditional use, personal, magical, conventional.

(Veblen 1915:38)

While the language is somewhat old-fashioned, the thoughts are modern and applicable to my discussion of contemporary processes. The key to this whole process is adaptation, and it applies, as we have seen, to physical technology as well as to social innovations. That is, for effective borrowing to take place, one must make the kinds of adaptations that meet local needs. As we saw in the case of the United States, this may involve some purging of the foreign origins of the innovation, and it commonly involves creative interventions that change the characteristics and effectiveness of the practices in a dramatic fashion. This can be a very complicated process, as was the case with the Japanese reconceptualization of American ideas on quality control.

Commenting on the interdependency of borrowed elements and the dangers of "cherry picking," my colleague Michael Flynn observes that American managers "have been trying to model trees and haven't stepped back to look at the whole forest" (Holden 1986: 276). Flynn refers, of course, to the need to think systemically, and at first glance, his statement seems at variance with my analysis; his metaphor of the "whole forest" suggests the holistic model referred to earlier. But the question is, whose forest should we be looking at? It obviously can add important information to know how the original use of an organizational practice relates to other elements in the system, though Veblen cautions us that the borrower should not be so thoroughly imbued with such understanding as to lose the capacity to develop creative uses of the innovation. What is absolutely critical, however, is for the borrower to know how the intended use of the new practice in its new environment will relate to other elements in that environment. In other words, we need to be modeling "our" forest not "their" forest.

It may be that the term borrowing carries too much baggage. Especially in cases of extensive adaptation, where the original ideas are barely noticeable in the new practices, though they may have inspired them, or where foreign practices have served as a "negative role model," we might do better to speak simply of learning . It is clear that borrowing in the sense of mere replication simply does not exist for any complex social technology. Rather, there is adaptation and the invention of new social practices.