Japanese, Korean, and U.S. Construction Industries

The Japanese company system is based on the group, not the individual as in the United States. This creates loyalty among Japanese workers toward their companies and results in work surpassing that of their U.S. counterparts. Furthermore, the Japanese contracting system relies much more on trust, a phenomenon illustrated by a lower ratio of lawyers per capita (SD-37, p. 2).

Japan is currently experiencing a contraction of its economy due to the strong yen. However, the domestic construction market remains buoyant due to three influences (SD-37, p. 9):

1. Stimulus of construction activity by the government
2. The relative low reliance on overseas contracts
3. Diversification into development by Japanese contractors

Japan is quickly entering overseas markets, such as the USA and Australia. In contrast, it is difficult for outside contractors to enter the Japanese domestic market (SD-37, p. 9).

Contrary to the generally high level of productivity in Japanese industry, the productivity of construction labor is low compared to other countries. The work force is aging due to a lack of interest by younger workers in entering the industry as well as Westernization of the young, who are not prepared to follow the traditional seniority system to gain advancement. The Japanese construction industry labor force follows the general cultural attitude towards the lifetime employment system of which the essence is recruitment of new graduates each year, training them, and assuring continuous employment until retirement, although this system in changing currently (SD-37, p. 16).

The Japanese style of management emphasizes group decision-making and consensus, with a bottom-up power structure. The American style is directed towards the individual achiever and has a clear top-down power structure. Decisions in Japan take longer; the U.S. style facilitates flexibility and quick response (SD-37, p. 26).

Due to its dependency on the Middle East market, which has dropped significantly the last few years, and on its shortage of skilled engineers, Korea is not likely to become a major power in construction in the near future, except for its low-bid capability in the competitive market (SD-37, p. 41).