Who is responsible?

But surely every company must be having the job responsibilities well spelled out for every employee. So if the manager is at fault why shud the President have to step down ?!

It is some sort of an old cuture and tradition. These Japs are pretty steeped in it.

The senior person is not blamed for the mistake that the junior committed. The consequences of the mistake will have to be borne by the junior himself.

The senior is blamed:
i. If the senior is a supervisor - for failing to notice the mistake and rectifying it.
ii. If the senior is a senior management guy - for choosing the wrong person for the wrong job.

However, as you correctly said, it's also not done to blame each and every error on the senior. One should also take into account the nature of the mistake and the circumstances under which it was committed.

Well, since he is in charge of the pack, he should be ready to face the consequences and therefore, train his subordinates better. That is the key to a successful and organized group: a leader who can hold his group together. The consequences should be milder for the head, but they still should apply.

Wudnt it be better for the boss to kick out the less than perfect subordinates B4 he gets the boot himself  😉

No, the senior representative of any organization cannot always be held responsible for mistakes committed by subordinate members of the organization. If the clerk has misplaced an important document, then it is really the clerk who is at fault and not his supervisor. However, with great power comes great responsibility. The senior representative, or the head of the organization, is really the head for a reason. He represents his company in good times and in bad. If something goes wrong, it is his job to make things right and take any necessary corrective action. Because, after all, it is his duty to ascertain that all that is going on in his organization is procedurally correct and follows the organization's mission.

Corrective action can be a number of things, including apologizing for the loss of the document, firing the clerk for losing the document, giving more training and supervision to make sure the same mistakes are not repeated, and several other things. Although some options may be more plausible than others, in the end, it is the senior representative who needs to save the day. I'm guessing the senior staff needs to be more careful and selective when hiring junior members to the organization. ;)