Opinions about industrial relations (IR) in Japan are extremely diversified. The main concern regarding IR appears to be whether Japan can maintain the vitality and flexibility to cope with the changes in the industrial structure and technology in a stagnant world economy. The lack of opposition and dispute between labor and management may be the most important feature for summarizing labor-management relations in modern Japan when making international comparisons. Hypotheses for understanding Japanese IR have been postulated in regard to the following: unintended consequences, homogeneous structure, business community of management and labor, global competition and the needs for flexibility, adaptability in competitive markets, and transformation of the paradigm of IR. The historical development of labor relations in Japan shows a spirit of cooperation. By any measurement of cooperation, labor-management cooperation is strongest in Japan. A special feature of the corporate structure is management's role as referee between the employees and the stockholders. Other features include a continuous path of promotion, firm-specific training, built-in wage-profit system, and transit members of unions. A typical system for mutual communication is the "labor-management consultation system." In the future, unions must minimize adverse effects of competition among rival companies, individualization, and fragmentation of IR. (Appendixes include 25 references and a chronological table of IR in Japan.) (YLB)