Learn About Japan > Work and Workplaces in Japan > Employment > Relations between Large and Small Companies

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Employment
- Group Employment Trips
- Spring Employment Season
- Hiring New Graduates
- Hiring New High School Graduates
- The Japanese Employment System
- Lifetime Employment
- The Seniority Wage System (nenkō joretsu)
- The Bonus System
- Enterprise Unions in Japan
- Enterprise Union Cooperation
- Unemployment Insurance
- Dual Tracks in Female Occupations: Ippan Shoku (Non-Career Track) and Sōgō Shoku (Career Track)
- Increase of Female Employees
- Female dominant occupations
- Post-Retirement Employment and Social Security
- Marriage Retirement and Retirement Ages for Men and Women
- Relations between Large and Small Companies
- Part-time Female Workers
- What Kinds of Work Do People Do in Japan?
- Freeter/ Furita: Part-Time Workers in Japan
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A worker at a small wood furniture factory in Iwaizumi, Iwate, Japan.
Photo Courtesy of Iwaizumi Junbokukagaku.
Relations between Large and Small Companies
One way that large companies in Japan are able to provide employment security and strong benefits for their regular employees is by keeping their work force limited and maintaining extensive, long-term relationships with smaller companies that provide less employment security and less generous benefits to their workers. Sometimes these smaller companies are direct subsidiaries (kogaisha) of the parent company (oyagaisha) or are partially owned by it. In other cases they may be independently owned, but dependent on the large company to varying degrees. Long-term sub-contracting arrangements offer economic benefits to smaller companies, but they also protect the benefits and job security of the large company’s workers. In an economic downturn the large company can reduce its contracts to outside companies and subsidiaries instead of laying off its own regular employees. Subsidiaries also provide posts where the parent company can place regular workers who are entitled to managerial positions. Sometimes such posts are used to groom employees for even higher positions in the parent company, but sometimes they are also dead-end positions for expensive older employees. Such appoints also restrict promotion opportunities for the regular employees of the subsidiary who have no hope of moving into the parent company.
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Special Terms:
job security
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contract
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