AbstractTraditional “Japanese personnel management” that has long been considered as the key for Japan's competitive success now needs fundamental restructuring in order to meet the challenges of a stagnant economy, matured domestic market, and the rise of NICs (Newly Industrialized Countries) in international markets. The self‐renewal of Japanese firms can be achieved by a paradigm shift at the corporate strategy level: from a production orientation to a product orientation. In accordance with this paradigm shift, leading Japanese firms have started reforming their Human Resource Management (HRM) function from a productivity‐centered to a creativity‐centered one— creative HRM. Creative HRM has three pillars: (1) the creation of the strategic vision through commitment of the employees, (2) an entrepreneurial middle management as a key strategic node, and (3) multi‐dimensional personnel management. Creation and realization of the strategic vision through the active commitment of an entrepreneurial middle management is necessary for the self‐renewal of the firm. “Japanese Personnel Management” that might have been overadapted to the traditional strategic paradigm is now transforming itself from a “group‐centered” personnel administration to an “individual‐centered” one. While Western companies have been adopting Japanese “groupism” to reconstruct their production systems, Japanese companies have started introducing Western “individualism” to encourage creative self‐transformation. But no system or technique is truly effective without human commitment, and this requires a fund