Uncle Sam's Competitiveness Blues

By Beaudoin, Tina | Management Review, September 1988 | Go to article overview
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Uncle Sam's Competitiveness Blues

Beaudoin, Tina, Management Review


American managers believe the country's competitiveness is declining--largely because of the performance of U.S. managers--and it is up to them to respond to the challenge, reports a recent Harvard Business Review survey of 4,000 managers in 50 states and 34 countries. Ninety-two percent of respondents believe U.S. competitiveness is deteriorating, while a distinct minority--only 5.4 percent of all respondents -- indicated that the U.S. is keeping pace with other superpowers, mainly Japan. And rather than blaming the government or the federal deficit, most managers--90 percent of respondents--blame themselves.

Forty-two percent of the managers surveyed hold top management positions, and their average household income is $102,000--demographics indicative of respondents' responsibility levels and their intimacy with the state of international business.

With the nation facing a $40-billion trade deficit with Japan, and considering that the yen's value has doubled against the dollar in less than a year, these managers' fears are warranted, says Alan Weber, managing editor of The Harvard Business Review. Also, in a 1987 report, the National Academy of Engineering reviewed the competitive situation in 34 critical areas, including artificial intelligence, opto-electronics, and systems engineering and control, and concluded that Japan was superior in 25 of the technologies.

At the same time, there is tangible evidence that American businesspeople are rising to the competitiveness challenge, he says. "Cast your mind back to September 1987, and you'll remember that the media were saying managers didn't think competition was a problem. The crash changed all that. But our results show that beneath the surface, managers have been uneasy for a long time," Weber says, referring to the 87 percent of respondents who believe that the competitiveness problem predates the overvalued dollar of the 1980s. "My sense is that now many believe America is falling apart at the seams."

There are some rays of hope, however. Corporate initiatives, like General Motors' multimillion-dollar investment in employee retraining; the increasing number of business schools requiring foreign languages such as Japanese; and the growing number of companies opening branches overseas, particularly in Japan, all indicate that American management is quickening its pace, Weber says.

A full 62 percent of respondents indicate they doubt any combination of market-based solutions will help American business keep up. But the survey identifies another group--38 percent of the 4,000 respondents--who thinks the competitiveness problem is transitory and will be resolved by a combination of such market forces as foreign investment, mergers, leveraged buyouts, the shift to a service-based economy, and the declining value of the dollar.

Among the more popular explanations for America's sluggish pace is that basic U.S. values--including the work ethic, pride in quality, and deferred gratification--have slipped.

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Uncle Sam's Competitiveness Blues


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