Controls can be broken down into two broad categories: impersonal controls based on written documents in which predefined objectives, stated in terms of numerical norms or standards, are compared to numerical results; and personal controls based on direct contacts with people, whereby one will monitor and assess what results have been attained and how they've been attained. In Japan, strong bureaucratic traditions (knowing that bureaucrats, there as in any country, have a preference for documentary work) conflict with managerial practices emphasizing the informal, the unsaid and the unwritten (the "zero paper"). This paper describes how the two approaches are blended into a mix somewhat different from what can usually be observed in Western countries. First, it is noteworthy to remark that Controllers in charge of budgetary controls, when they exist, have limited powers in Japan. The controlling function itself is not as widespread as in the West. Accounting practices tend to favor external information on the one hand and pro-active management on the other, rather than ex post controls. Cost accounting systems are geared towards cutting down expenditure. From the very beginning, when a product is conceived and plans are made for its development, the Marketing staff determines long-term profit objectives and a selling price that can be allowed by the market; then target costs are set, resulting from a dialogue with the R & D staff. Similarly, for existing products, accountants work out estimated costs rather than real costs that can be known only once the products have been manufactured and sold, in other words, when, in the eyes of Japanese managers, such a work has become useless. Again with the same managerial philosophy, indirect costs are allocated not necessarily according to "objective" criteria (as far as such criteria exist) but according to managerial goals and marketing necessities. Standard costs are considered too rigid, and most companies prefer by far more flexible "market driven costs." As Professor Hiromoto from Hitotsubashi University puts it lapidarily, "Good-bye to standard costs." However, in Japan as elsewhere, controls are an essential tool of management. But to "figure-driven controls," managers tend to prefer "people driven controls"--direct (and often oral) controls on activities. Formal yearly hierarchical appraisal of performance is in use in most large companies, as in the West. But informal daily controls are considered more motivating and more efficient. The subjectivity of such controls is accepted; more than that, a criterion that would be in the West considered as highly subjective (for instance, the bad taste of an employee's ties) might be considered as "objective" in Japan. These informal controls are carried out in various ways by supervisors, of course, but quite frequently also by equals; group pressure is one of the most efficient way of keeping in line would-be deviants. Regarding controls in companies, one should also take into account a major (though informal) principle of the Japanese society, which is "internalization of controls": since infancy, people are brought up to exert self-censure and to control themselves according to rigid social norms. Another edge not often mentioned about Management in Japan (or by the way, about many Far-Eastern managers playing the managerial game with the same rules) could possibly be that of stressing human controls because they are more motivating than impersonal controls. People are the one main force of a company, and their motivation is crucial to its success. As a final remark, however, one could candidly observe that numerical controls such as those most regarded in Western companies are in no way incompatible with such human controls and that, probably, the most efficient companies either in the West or in the East do put both into practice
