This paper discusses human resources development (HRD) in Japanese industry. Chapter I addresses changing industrial and occupational structures as a foundation for planning and constructing management strategy, especially for business restructuring. The actual situation regarding business diversification is considered, and an attempt is made to portray the status of staff development activities. The chapter examines the presence of personnel management structures that hamper employees in working as they were trained, as well as countermeasures adopted by some advanced Japanese companies. Attempts to overcome the problem of in-company job conversion are described. Finally, the chapter reviews the actual situation of diversified employment patterns and prospects for the future. Chapter II discusses the fundamentals of personnel management based on the capability principle. A new concept of this principle is proposed that is based on the idea of capabilities development. A method of personnel management is discussed with which decision making by employees can be applied to a wider range of ideas. Chapter III examines the methodological problems of how to bring about personnel management selected by employees from three points of view: personnel management by voluntary choice and career planning, the extent of application and operation of career development planning, and the most desirable course for the future. (YLB)