Where can I read more about this? How wide-spread is this practice?
The more oldschool the company culture and the farther away from major cities (esp. Tokyo/Osaka) you get, the more common it will be. It is very common throughout the Toyota Group where I used to work (which is coincidentally the same geographic area as where patio11 worked).
It's actually a fairly effective social arrangement, though it is understandably very odd from a Western perspective (I was initially appalled, having grown up in SV).
I can attest to this, having this very situation in action first hand.