Yawata Steel Works, which now belongs to Nippon Steel Corporation, was the first large scale integrated steel making enterprise in Japan. As an enterprise owned by the Japanese Government, it started iron and steel making in 1901. The enterprise grew in size so rapidly that in the 1920s it employed about 30,000 workers. The Yawata Steel Works consisted of a huge complex of numerous mills. The total number of blast furnace mills, steel making mills, roll mills, repair shops, railway shops and other mills were counted as more than one hundred in the late 1920.
Although individual mills had to follow a primitive production control and accounting requirements imposed by the top management, the execution of the business was largely left to mill managers. It is important to note that each mill was more or less independent of the control by the top management in its implementation of labor management. Until early 1910s, most of the labor management in Yawata had been carried out by the mill managers who were responsible for recruitment, discharge, promotion, and pay raise of their workers.
For the whole period, there existed a central labor office which was in charge of labor management in general. But the resources of the office were so limited that tasks it could perform were mainly confined to enactment of by-laws which stipulated codes of labor conditions for operators and day laborers.
In order to compensate for the weak position of the central labor office and to strengthen the control over individual mills, the top management with the assistance of the central labor office made use of a stratified personnel system. While the status of top and middle management which included executive officers, engineers and assistant engineers in its fold was defined by the statutes and governmental decrees, the top management could decide the number and the status of the lower rank of supervisors. As there had always been a need with the rise of production in each mill to increase the number of lower ranks of supervisors, the top management and the central labor office could gain control over the activities of each mill through its policy as to supervisors. Thus, until the outbreak of the war in Europe, the role of the central labor office remained quite limited. But the economic boom which took place during and after the war changed the situation. The hectic economic activities all over Japan produced an acute labor shortage almost everywhere in Japan. The Yawata Steel Works was forced to raise the workers' pay, and the following inflationary pressures invigorated the workers' demand for better working conditions. After the short-lived unsuccessful strikes in February 1920, the top management implemented a series of reforms in labor management which were to change the role of the central labor offices. One of the reforms was an establishment of the works councils, the labor offices being responsible for its working. New supervisory classes mostly recruited from operators were created. The labor office began issuing a bi-monthly newspaper. As it was evident that each mill could do almost nothing in reacting to the workers' demand, the labor management by the central labor offices began to take the place of the management by individual mills.
The economic depression following the post-war boom also contributed to the strengthening of the function of the central labor office. The need to raise productivity by way of restraining the increase of man-power necessarily limited the power of each mill in its recruitment activity. In case a mill manager wanted to increase the number of his workers, he was required to get a permission from the central labor office. The manning was no more regarded as a matter which only mill managers could handle. The central labor office could decide the number of workers which a mill could employ, move workers from one mill to another more easily, start productivity and safety campaigns which mobilized all the workers.
The evidence as to the labor management shows that there was a clear-cut trend toward centralization within the Steel Works. But it will exaggerate the situation to say that there was no strong trend other than centralization. We cannot forget the countervailing trend of decentralization at this period. Accounting system was the case in point. In earlier period the top management controlled the activities of each mill through a centralized accounting system, but in the 1920s and 1930s there developed an accounting system which put more responsibility for cost control on each mill. Even in the labor management, centralization and decentralization took place at the same time. While the central labor office was responsible in checking the working of the wage systems, each mill could invent and implement a local wage system as long as it was based on the general wage policy. In the productivity drive promoted by the central labor office, each mill set up a committee including staffs and workers in order to discuss the productivity measures.
The centralization in the labor management of Yawata Steel Works is important in that it became an integral part of the policy of the top management to achieve a highly integrated state of production. Before the application of Taylorism and other production techniques on a large scale which began in 1950s, there were few methods available to the top management in coordinating the activities of each mill. The labor management by the central labor office was one of those methods which could offer an effective means of coordination.
The emergence of the new way of running a giant enterprise through the centralized labor management will be also of note in its connection with the fact that from the late 1930s to 1950s the Steel Works made use of the centralized labor management in mobilizing workers participation in war production effort and in post war reconstruction. After the Second World War the newly established labor union organizing operators of the Yawata Steel Works held joint consultation with the management. The issues discussed was status of operators, manning policy and pay rise, all of which the central labor office had dealt with before the war. It will not miss the point to say that the centralized labor management became an institutional basis on which post war industrial relations was constructed.