The founder, president, and CEO of Johnsco Electronics has found himself in a situation facing a critical labor shortage without an immediate solution to the problem. The company is based out of Tennessee with a new foreign operations plant near Tokyo, Japan. John, who is the founder, president, and CEO, has discovered maintaining a significant number of expatriates is extremely costly for the company. He has decided to form a joint venture with a Japanese automobile manufacturing company. In this joint venture, he agreed to use host country nationals in the new facility. John is faced with many decisions and must determine how to balance his obligations under the U.S. law, local customs in Tokyo, and minimize the high cost of using expatiates. This paper will analyze the discussion questions posed in the case study.
Japan is one of the most costly countries in the world in which to do business.
Expatriates working in the country can find numerous job opportunities in Tokyo, which is very populous and has a high cost of living. Employee salaries are comparable to that of American salaries; however, the exchange rate is quite different. Salaries of expatriates are commonly higher than the salaries of Japanese nationals. Japan also has a bonus system that is an integral part of the salary structure. In addition to the regular salary, two annual bonuses are paid to employees. Often the bonus can equal up to one-third of a salary (Overseas Digest, 2008).
Discussion Questions:1. What steps can you suggest that might help John solve his labor problems for the new plant in Tokyo?John would benefit by using both expatriate employees as well as host country employees. In taking this step, the cost to human resources will be reduced. Additionally, enhancing the recruitment strategies would also be suggested.