ABSTRACT
The 20th century has been marked by a sustained expansion of the work force. The growth was largely a product of demographic changes, a tripling of the population of working age and declining birth rates that led to a rising participation by women in the labour market. The "community of fate" has lost its meaning for the younger generation although young employees may still yield to social pressures and adhere formally to the rules in their organizations. Labour productivity in Japan had been increasing by about 3 percent a year until the latest business slowdown. The incentive system developed by Japanese companies may appear to be based on ability and competency but it is in fact closely related to seniority. As economic growth gradually slowed, successful business practices that had evolved in a high growth environment diverged further and further from the path of profitability.
