The prolonged, 10-year, economic downturn in Japan has had far-reaching implications for structure and human resource management (HRM) practices in Japanese organizations. In particular, the demise of hierarchical and group structures has been predicted, together with the end of distinctive HRM features such as lifetime employment and seniority-based pay. Using interview-based empirical data with a variety of Japanese organizations, this paper argues that such organizations are indeed moving towards flatter, less hierarchical structures. Moreover, there are marked shifts in HRM practices. In particular, the seniority-based pay system has been subject to reform. However, other practices have proved considerably more robust than the popular literature would suggest. For example, the lifetime employment system, although under significant pressure, remains largely intact. Indeed, we will argue that certain other key practices are being sacrificed to maintain job security.
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