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Japanese Turn Losing British Business Around

January 1, 1990 -

The SP Tyres factory in Birmingham, England only a few years ago was headed for bankruptcy and closure. That is until it was sold by Dunlop to Japan's Sumitomo Rubber Industries in 1985. Under the old management, this company suffered from the common British industrial ailments: old buildings and equipment, low workers' morale, poor quality and poisoned labour-management relations. One of the current managers explained that the place was a shambles. "It was run by unions on the one hand and bureaucratic accountants from London on the other, who thought managing was ringing us up to tell us how many tires to produce." (Financial Post, January 9, 1990, p.13)

When the new Japanese owner took over it made a number of tough decisions and introduced an entirely different management style. Instead of treating employees and unions as enemies, it sought their cooperation. It also provided training to enable the employees to assume more responsibility and authority. Most importantly, the company opened up new lines of communications with its workers. The result was a new environment in which management gained credibility with the employees, and the employees began to develop a new sense of trust in management and in the continuous viability of the company. Impressive production and quality improvement have made this company well situated to meet the challenges of the future. This again demonstrates that the key to successful business is to treat employees as people who are able and willing to learn and to assume responsibility.