Lessons from the Japanese Decision-Making Process

Japanese firms traditionally use the ringi seido (“request for approval system”) to make critical decisions. A proposal is circulated to appropriate people, advancing from lower to higher ranks. As the proposal works through the management layers before landing at the top, each participant puts their stamp (the hanko) on the document.

This collective consensus process allows for a greater number of reasonable alternatives to be considered and for the risk to be spread. Although it may be slow, the implementation is faster once the decision is made. (Since the early ’90s, Toyota has followed a “three-stamp movement,” restricting the number of people needing to approve a proposal to three.)

Unlike consensus management in the west, the ringi system is often used to appease factions in an institution. Given the Japanese norms (nemawashi) of social structure and intercultural communication, everybody tends to be very diplomatic when giving an opinion. A decision isn’t made if unanimity isn’t reached.