is the Japanese management model applicable in Kazakhstan?

Purpose – The purpose of the study was determined primarily by the needs of studying modern management practices in Kazakhstan. The aim of this paper is to conduct a study towards analysing the development of theory and practice of modern management and the possibilities of using world experience in our country.

Methodology – The methodology consists of two parts: 1) application of the theoretical foundations: philosophical dialectical principles of logical and historical unity; universal, special and individual; dialectics of the subject and object; systems approaches. 2) comparative analysis of the basic principles of models. A significant contribution of this paper is the application of the E.Deming management model.

Originality/value – The objectives of the research are to reveal the features of development and the basic concepts of modern management approaches and the possibilities of using them in our practice. Paper describes the history of management, the main stages of the development of management and major schools, which has had an impact on the formation of management. Also, it discusses the relationship between management science and economic development, the problems of implementing effective management models in Kazakhstan

Findings – Authors concluded that the general direction of evolution is the transition from the management model under the conditions of the development of scientific and technological progress and the relatively low level of competition to the management model of a largely individualized production and increased competition, which has led to the emergence of new schools and new models of competitiveness management. We found the relationship between the development evolution of American, Japanese and Kazakh management models with the development history of these countries, the main features and principles that characterize these models are revealed. We concluded that there are many advanced management models, however, but no single ideal management model, as each company is unique.

Introduction

The study of the history of the development of management is now particularly relevant since any scientific development is based on the use of historical data.

One can come to an understanding of the essence of management and an awareness of how to make it the most effective, avoiding contradictions and mistakes in improving the management system, studying historical experience and development paths, tracking evolution.

In this study, the general evolution of management development as a science is analysed, followed by an example of the development of advanced management models of Japan and America. The differences in the development of Kazakhstan's management models are also examined, and the main characteristic errors in the application of the Japanese management model and quality management system in our country are revealed. 

History development of management. Scientific methods and management school.

For the purposes of our study, let us consider the notion of "management" proposed by the modern Russian scientist I. Semenova [2], “Management is the ability to achieve the set of goals labour, intellect, motives of the behaviour of other people. The management system is a set of different components: management principles, functions, methods, technologies of information system support, financial, technical, and legal. The management process has four interrelated functions: planning, organization, motivation and control”. However, the consideration of the definition does not give a complete understanding of the essence of this concept. It is necessary to investigate the stages formulated by the theoreticians and the general ways of developing management as a science. Also, I. Semenova identifies three periods of management development, which depends on the development level of the production forces: "Traditional management, management of the industrial stage, management of the post-industrial stage." [2]. The table 1 below is made on the analysis of her works, in which the interrelation between the periods of development and the level of development of the productive forces is traced. We can see the beginning of management as a science.

Thus, we can see changes – social, economic and production relations, the rapid growth of scientific, technical and social progress, structural and organizational changes in enterprises – that generate the need for scientific approaches to management. R. Fatkhutdinov [3] proposed to structure scientific approaches in the following classification: «Exclusive • Integration • Structural • Complex • Behavioural • Functional • Innovative • Systemic • Situational (variant) • Process • Marketing • Global». The author described the essence in the following way:

A systematic approach is to consider objects as multicomponent systems that represent a set of interrelated and interacting elements.

The essence of the innovative approach to management lies in the orientation of production process development to the activation of innovation activities. 

Table 1 – History of management development.

Technical, environmental, economic, organizational, social, psychological aspects of management and their interrelations must be taken into account when applying an integrated (interdisciplinary) approach.

The global approach is realized through the development of new information technologies. For example, it is applied when solving issues of international standardization, metrology and certification.

The marketing approach provides for the consumer's orientation of the control subsystem in solving any problems. 

The essence of the exclusive is based on the exclusivity of the rights to use a certain competitive advantage.

The process approach considers all management functions as interrelated.Structural focuses on the most important and specific elements.

The situational approach concentrates on the fact that different management methods are determined by a specific situation.

Behavioural approach improves the effectiveness of the organization by increasing the effectiveness of human resources. [3]

Today Ovcharova R.W. offers to break all the teachings into two large groups one-dimensional and synthetic. "One-dimensional research studies the processes of labour, human and administration separately. Synthetic studies explore management as a multifaceted, complex and changing phenomenon related to the internal and external environment of the organization" [5]. This classification allows us to determine the period of the beginning of the application of scientific approaches, i.e. from the period of industrialization and development of production relations (table 2, 3).

Table 2 – Characteristics of one-dimensional types of management studies, and the applied school of competitiveness management [5]

Table 3 – Characteristics of synthetic types of management studies, depending on the scientific approach used to manage competitiveness

Thus, literature review gave us the following premises: the direction of evolution – the transition from a management model in the conditions of the development of scientific and technological progress and a relatively low level of competition to the management model, largely due to individualized production and aggravated competition, which entailed the emergence of new schools and models of competitiveness management. 

Models of competitiveness management.

The evolution of the theory and practice of management is reflected in the diversity of the created management models. Enterprises are in the process of constantly searching for their management model. This is an ongoing process because the company itself and its environment are changing. The implementation of the new approach has become a strategic management, which involves additional planning of the strategy and the potential of the company. Change causes a change in strategy. The type of strategic development of a company directly depends on the selected scientific approaches, methods and tools for managing its processes.

"Set a goal and be consistently firm and constant in achieving the goal of continuous improvement of products and services, allocating resources in such a way as to ensure long-term goals and needs, not just momentary profitability, to achieve competitiveness, preserve the enterprise and provide people with work. "E. Deming [6]. From the point of view of theeconomic development of countries in which they are used, the most effective are the American and Japanese models. The peculiarities of development and characteristic differences will help us to answer the question: "Why attempts to introduce advanced models in Kazakhstan basically fail?"

Japanese model is relatively young. It is cognizant that her birth is connected with the name of the American scientist, statistician and management consultant Deming William Edwards, also known as Edward Deming. After the Second World War, Japan's economy was destroyed. The government was looking for ways out of the crisis and studied the best practices of the winner countries. During the war, there was an excellent quality of English industry products that introduced statistical methods of quality management (Shewhart control charts) of the worldwide famous American scientist and consultant on quality management theory, a follower of the quality training of JJ Juran, Walter Andrew Shewhart. Then, in 1946, U. Schuhart's disciple E.Deming was invited to Japan. His lectures on the methods of statistical quality control were perceived by senior officials of Japanese companies. In Japan, the process of mass education managers was introduced, following the acceptance of the need to study and to implement statistical control methods. In recognition of the merits of E. Deming in 1951 in Japan, the award was established in his name, awarded annually since then to companies for outstanding success in improving quality and individuals for a significant contribution to the theory and practice of quality management. The award is issued in the form of a diploma and a silver medal with the profile of Dr E. Deming. Emperor Hirohito awarded Deming with the highest award the Japanese order. The decree on awarding said that the Japanese people are indebted to Deming for the rebirth of industry and its worldwide success.

This suggests that the philosophy of continuous improvement and statistical thinking in management introduced by E. Deming has acquired a national character in Japan. And in its turn, the developed model was constantly improving, which led this country to the leaders in the field of quality and development of the economy. let's considerer the main points of Deming's teaching, the central one of which is the view of any object or phenomenon as a system.

The central point of the teachings of Deming-look at any object or phenomenon as a system. William Edwards Deming's philosophy is summarized as follows: "Deming taught that by adopting appropriate management principles, organizations can improve quality and reduce costs at the same time the key is to practice continuous improvement and provide production system, rather than as pieces and parts. "Henry Niv [11]. E. Deming proposed a simple but quite versatile tool, process improvement as an iterative cycle: "planning-execution-verification-corrective effect". The System of Profound Knowledge took the greatest place in his philosophy. "The prevailing style of management must undergo a transformation. A system cannot understand itself. The transformation requires a view from outside. It is needed to provide an outside view, which is called a system of profound knowledge. It provides a map of theory by which to understand the organizations that we work in." Deming believed that “all managers must possess what he called The System of Profound Knowledge”. Henry Niv [11] defines this concept as consisting of three parts:

Understanding system: understanding the entire process involving suppliers, producers and consumers;

Knowledge of the theory of variability: the separation of variations at the output of any process into general-systemic-causes and special or special causes random and fleeting interventions in the system;

Elements of the theory of knowledge: the concepts explaining knowledge and the limits of what can be known.

Knowledge in Psychology: understanding people".

He defines the basic paradigms of Deming management: "14 points of management of Edward Deming [11]:

1. Make sure that the desire to improve the product or service becomes permanent. Your main goal is to become competitive, stay in business and provide jobs
2. Learn a new philosophy. Managers need to realize their responsibility and take the lead in order to achieve change
3. Exclude dependence on control when quality is achieved. Eliminate the need for mass control, first of all, making quality an integral characteristic of the goods
4. Discontinue the practice of issuing orders based on price indicators
5. Constantly and consistently improve the system of production and service, to improve quality and productivity, and thus constantly decrease costs
6. Create a system of training in the workplace
7. Create an effective leadership system. The purpose of inspection should be to help people, machines and devices to work better
8. Destroy fear to enable you to work effectively for a company
9. Destroy barriers between departments
10. Give up slogans, sermons and tasks for workers, calling for zero errors and achieving new levels of productivity. Such sermons cause only opposition, because in most cases low quality and low productivity are caused by the system, and therefore outside the power of the workers
11. Give up management that focuses on quantitative indicators 
12. Eliminate obstacles that prevent a career worker, administration and engineering staff from being proud of their skills.
13. Implement an extensive program of continuing education and self-improvement
14. Have everyone in the company participate in the transformation program. Transformations are everyone's business. "

In the 1970’s of Deming's philosophy was summarized by Osono E. [6], one of his Japanese supporters, as follows: When people and organizations focus primarily on quality, defined by the following relation:

Where the costs are reduced over time, and quality tends to increase, However, when people and organizations focus primarily on "costs, expenses tend to rise and quality declines over time [6].

Subsequently, management model improved in accordance with the same principles. Masaaki Imai is the author of the appeared new philosophy of "Kaizen". The management concept of Kaizen includes the greater part of the famous Japanese techniques and management methods, including "supply-just-in-time, kanban, universal quality control quality across the company, the system of zero defects, the system of submitting proposals and a lot more. Key elements of Kaizen taken classified:

• PDCA cycles/SDCA;
• quality;
• a conversation with the help of data;
• consumer, as any subsequent process;

Perhaps the most famous branch of Kaizen became the “supply -just-in-time " system, developed in the mid-20th century in the bowels of the Toyota company.

The American model was formed historically in accordance with the evolution of the theories and schools of management already considered in our study. The essence of this model lies in the rational organization of production, reducing costs by identifying in-house reserves, increasing labour productivity and efficiency in the use of all resources. while the company is regarded as a closed system. goals and tasks are considered set and stable for a long time with this approach; The basis of the strategy is the continuous growth and deepening of the specialization of production; The organizational structure is built on the functional principle (with a clear division of the management apparatus by services); the control of all types of activities, the precise execution of instructions from above by personnel is crucial. A long period of time in America was dominated by a one-man management style. strict discipline and unquestioning obedience were observed at firms with purely external democracy. American management was characterized by a rigid management organization. the desire to formalize managerial relations and the personal responsibility of the employee. It is the most characteristic for him. The effectiveness of the work of a particular leader is determined on the basis of whether he was able to personally achieve the goals that were set to him.

In the early 1980s, Japanese cars and machinery appeared on the American market, which led American managers to pay attention to the Japanese management model. The heads of the leading automotive corporations of the country that manufactures Nashua, Ford Motors and General Motors technology have invited E.Deming as a consultant. In mid-1980, the NBC television company showed a documentary program entitled "If Japan can, why cannot we?" Little known Dr E. Deming, along with other prominent public and state figures, took part in this program. For many viewers, it became a great revelation that Japan's successes are not due to cultural peculiarities, but to the quality management methods that American statisticians have taught the Japanese. The program showed the experience of the Nashua Corporation to dispel the myth that American workers are guilty of poor quality and low productivity.

Then E. Deming formulated common features in the activities of many American companies that did not allow them to succeed "Deadly Diseases". In E. Deming's opinion, the cure for these "diseases" called for transforming the management style in the US economy. The brief meaning of «Deadly Diseases» [8]:

• Absence of persistence of goals and orientation towards the consumer;
• A focus on obtaining short-term profits;
• Evaluation of the work of employees on formal indicators, attestation, rationing
• Fluency of management personnel;
• management based on only available figures and data, without due regard to missing or impossible to record indicators;
• Superhigh social costs;
• Ultra-high costs due to thereturn of products. For the US and European Community (EU) markets, the excessively high cost of monetary obligations, inflated by lawyers, that calculate the size of compensation payments. However, E.Deming's teachings were not widely spread in America, but some of the principles were adopted in separate companies. However, this significantly changed the overall "American governance model". Comparative characteristics (Table 4), will allow us to disclose the main differences characteristic of Japanese and American

Table 4 – Comparison of basic 2 model characteristics

Thus, Is the Japanese model of governance applicable in Kazakhstan?

In the European and post-Soviet countries, including Kazakhstan, there are many different models that do not have such clearly expressed national characteristics. However, different parts of the management system of these countries organizations unite them and can be integrated together with the quality management system (QMS) into a unified management system. It is believed that this increase in the effectiveness of planning and efficient use of resources, creates a synergistic effect in achieving the overall business objectives of the organization.

The application of this system was a requirement of time. In the 1990s, after the collapse of the Soviet Union, our country has just embarked on the path of developing a market economy. The destruction of existing socio-economic relations led to a crisis. Kazakhstan's economy, which is experiencing significant changes in its structure and production volumes, has faced problems that faced the Japanese economy in the 1940s and 1950s: the need to increase production efficiency, enter global markets with competitive products. At that time, many foreign specialists and companies that trained QMS and its certifications were invited. To date, all sufficiently large and front-line organizations and enterprises have this certificate. What is QMS, and why did the Government of Kazakhstan pay much attention to this system?

Wikipedia defines the QMS as: "Quality Management System (QMS) is a set of organizational structure, methods, processes and resources necessary for overall quality management." It is intended for continuous improvement of activities, for increasing the competitiveness of an organization on the national and world markets, determines competitiveness any organization and is part of the organization's management system. QMS certification is based on conducting independent audits by a third party (an authority on certification). In 1987, the International Organization for Standardization (ISO International Standard Organization), based in Geneva, Switzerland, published a series of models of quality management systems to enable the world community to standardize a common package of requirements and thereby facilitate the equalization of trade barriers based on a shortage acceptability or understanding of various national Quality Management System (QMS) documents. They became known as the ISO 9000 series. ISO 9001.

One of the objectives of this system is to continuously improve product quality and reduce the cost of quality assurance through the use of the PDCA cycle (Deming Cycle), as well as SDCA, consisting of planning, action, analysis, adjustment. Where the adjustment eliminated the causes of non-compliance, the development and application of methods to measure the effectiveness, effectiveness of each process based on key quality indicators, rather than simply correcting the results.Spitsnadel VN [7] so defines the basic principles of quality management:

1. Focus on the consumer – organizations depend on their customers and therefore must understand their current and future needs,
2. Leadership – managers ensure the unity of the purpose and direction of the
3. Involvement of personnel – employees of all levels form the basis of the organization, therefore, their full involvement in solving problems enables the organization to profitably use their
4. Process approach – the desired result is achieved more effectively when the activity and the corresponding resources are managed as a process.
5. System approach to management – the identification, understanding and management of interrelated processes as systems contribute to improving the effectiveness and effectiveness of the organization when its goals are achieved.
6. Continual improvement – continuous improvement of the organization as a whole should be considered as its unchanging goal.
7. Decision-making based on facts – effective solutions should be based on the analysis of data and information.
8. Mutually beneficial relations with suppliers – the organization and its suppliers are interdependent, therefore the mutual benefit relationship enhances the ability of both parties to create

In the 50's-60's of the last century, Armand V. Feigenbaum introduced the expression "Total Quality Control". "Universal quality control is an effective system of integrating all efforts aimed at developing, maintaining and improving the quality of work of all parts of the organization, which creates the conditions for marketing, design and development, production and service in the most economical way to fully meet customer needs." Spitsnadel VN [7]

Thus, we can conclude that the basic principles of the Japanese model and the QMS are similar, and basically, they have basically the same principles of JJ Juran [12] and the "paradigm" of E. Deming, however, the methodology of their use is different. QMS considers quality control as part of the management system.

Quality is handled by individual units, for example, quality systems audit, responsible for quality, which requires additional costs. In Japanese management models, quality management is built into the systems themselves, so control occurs directly in the process of operation.

Then why do not the enterprises of Kazakhstan reach the Japanese level? Why are our "quality processes and people's work", does not create perfect products.In addition to the "seven deadly diseases", Deming’s 14 Points for Management are inherent in our managers.

The majority of the obstacles indicated by E.Deming exist today, for example, on the site of a large investment fund of Samruk-Kazyna JSC, which owns a number of the largest assets in the state: KEGOC JSC, NC KazMunayGas JSC, NAC Kazatomprom JSC, Kazpost JSC, etc., there is a program transformation of the fund. "To ensure the necessary increase in the efficiency of investment and operational activities, the Fund has developed a program for large-scale transformations of its activities and activities of controlled portfolio companies (the" Program of transformation of JSC "National Welfare Fund" Samruk-Kazyna ", hereinafter referred to as the" Program ").", "Transformation includes themselves the main elements of changes and improvements: People, Processes, Technologies. " The program was launched in September 2014 and its execution, as indicated on the site, is scheduled for 2020."In the Transformation Team these directions are assigned to the following blocks:

• CMG Change Management (People)
• INT Integration (Processes)
• TIM Information Technology Unit (Technology)
• PMO The Office of Project Management unites the work of these three areas, the main task of which is to monitor and achieve the set goals on schedule and within the allocated budget".

Having considered only one of the positions of the program, which is the evaluation of activities (KPI) and the development of automation of subsidiaries, it can be noted that implementation of this program is inherent in "deadly diseases" for Deming: (2,4,7,8,9,13). None external invited experts will be able to tell the participants of the process how to do this system better. The improvement is an ongoing process, carried out from within the processes themselves. You can not evaluate employees on formal indicators. Automation cannot lead to better product quality, etc.

One of the modern economists of Kazakhstan Zhangir Rakhzhanov, in his article "Transformation of the National Welfare Fund Samruk-Kazyna: a Path to Nowhere" [16], notes: "Now the Fund is throwing very large human and financial resources to re-engineering business processes, (KPI), and automation of subsidiaries, but with very high cash costs and time losses, this makes very little sense.As a whole, today the situation in the UK looks so that the management of the Fund cannot solve its own tests in the head office, while "teaches how to live" their subsidiaries. " Zh. Rakhmanov assumes that this program suffers a fiasco for today. However, he does not take into account the first item of "Deadly Diseases" the calculation for "Instant Pudding". Transformation is a process of constant improvement and improvement, one can not count on a quick result. Continuous improvement and correction of errors are necessary.

There has been an experience of successful implementation of transformations. So, for example, one of the successful companies in Kazakhstan-Bekker LLP is known to everyone in Kazakhstan, not formally, but realizing and implementing the "quality management system". , Kravchenko V.M., one of the founders and one of the most famous leaders in Kazakhstan, supervised and directed this process. If we consider the quality of the goods as an aggregate of its properties, then buyers are willing to pay for their products, a higher price, where the price of the goods is the criterion for assessing this compliance and one of the indicators of the company's performance.

In addition, today there is an experience of thesuccessful application of the "Japanese model" in Kazakhstan. An example is Karaganda poultry farm "Aknar PF", a member of the group of companies "Aknar", the founder and chairman of the coordinating council of which is Matveev VN. After he has implemented the QMS in the companies, his next phase of improvement was the study of the philosophy of the Japanese management and its adoption. He managed to collect and bring up the basic principles of the Japanese model at the enterprise. Adler U.P, Shper V.L, and Fidelman G.N., as consultants, searched for the solutions to introduce changes and who taught the managers to use statistical way of thinking.

At the same time, this was not a technical transfer, i.e. copying international experience, but rather its creative comprehension and application, considering the specifics of enterprise development. The success of the continuous improvement of the activity of this enterprise lies in its efficiency. Later, based on the practice of introducing changes, Fidelman GN [19] called the "Toyota approach" as "System Management" in his book "System Management or How to Start the Way of Toyota", where he showed practical examples of improving the management system.Thus, the given examples are the answer to our question:"So, is the Japanese model of governance applicable in Kazakhstan?" Despite the fact that not all principles of the Japanese model are applicable to all companies, this, however, is the beginning of implementation and continuous improvement albeit a long, but already successful way to improvement.

Conclusion

In the main directions of socio-economic development of Kazakhstan, it is noted that everything will be focused on resolving the main economic problem of the forthcoming period, but in the future created mechanisms of economic policy will be a problem of competitiveness" [1]. According to M. Porter, "no country, no company can afford to ignore the objective need for competition. They should try to understand and master the art of competition" [2]. One of the priority areas of the science of increasing competitiveness in modern conditions of development of Kazakhstan to achieve these goalsis the development of the main theoretical and methodological positions on the use of management in the practical activities of enterprises and organizations. The main feature of management thought will be the search for new concrete and real ways of improving one's own management system.

On the basis of the analysis of the evolution of theoretical approaches in the description of management activity, it was established in our study:

• the formation of management goes through many stages, the development of which is marked by different ideas. However, we can confidently say that each of these ideas can be sufficiently effective only in certain conditions of historical development of society;
• the general direction of the evolution of management development the transition from a management model in the conditions of the development of scientific and technological progress and relatively low level of competition to the management model of a largely individualized production and increased competition, which led to the emergence of new schools and new models of competitiveness management;
• At present Kazakhstan is at the stage of active development of the economy of competitive It is possible to apply the Japanese management model for greater efficiency of this development, which is what the most progressive companies are striving for.

The examples of the use of such a model in successfully operating enterprises in practice, shown in the study, confirm that the introduction of it is actively developing. At the same time, we are not talking about a technical transfer, copying of international experience, and his creative comprehension and application, taking into account our features of the development of society. Unthinkingly following the advanced management models does not lead to the fulfilment of the tasks assigned to the management.

The main reason for the ineffective implementation of the Japanese model and QMS model is:

• formalized approach to standardization of processes and quality control;
• the philosophy itself was not understood and not accepted by the Russian model; volatility of goals;
• the desire for a "momentary" benefit. The main "paradigms" of the way out of the crisis, long existing in science, have not been taken into account.

Kazakhstan companies, like American companies, are inherent in the "Seven Deadly Diseases", defined back then by E. Deming.

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