Trends in Japanese Management: Continuing Strengths, Current Problems, and Changing Priorities

Trends in Japanese Management: Continuing Strengths, Current Problems, and Changing Priorities

Trends in Japanese Management: Continuing Strengths, Current Problems, and Changing Priorities

Trends in Japanese Management: Continuing Strengths, Current Problems, and Changing Priorities

Synopsis

This book analyzes the strategy and structure of successful Japanese manufacturing corporations. In spite of the depression during the 1990s, Japanese firms in high technology products have kept strong competitive power in the world market, revealing the strength of Japanese management systems. The authors analyze 10 years worth of data for 200 manufacturing companies.

Excerpt

Japanese management is no longer the ‘flavour of the month’. Its heyday in the West coincided with that moment in the early 1980s when US confidence – both political and economic – seemed to be at its lowest ebb; after the debacles of Vietnam, the Iranian hostage saga and the lacklustre Carter administration. Smokestack industries were dying, the agricultural heartlands appeared to be in great distress, and everywhere US industry seemed to be under threat. And the number one threat was clearly Japan. In VCRs, cars, cameras, entertainment systems and televisions – to name but a few – US manufacturers were rapidly losing ground to Japanese manufacturers, in some cases, such as VCRs and colour televisions, vacating the field entirely. Not surprisingly, students and professors in the business schools wanted to know how it was possible, how Japan had managed to become predominant. That was the 1980s.

Now, fast-forward the overview to the turn of the century. What a difference a decade has made. In the brave new world of e-commerce, the US economy is absolutely and unchangeably number one. The new industries of the digital decade are dominated by US software, with Microsoft as a metaphor for the new economy. And what now of Japan? It struggled through the 1990s suffering the overhang of the late 1980s bubble economy, financial collapses, political incapacity, real estate crises and loss of national industry to foreign firms such as Renault. Who is interested in Japanese management now?

We argue that it would be a great mistake to write off Japanese management. Just because the Japanese economy has experienced slow growth and the average share and real estate prices have fallen, caused mostly by speculative investment by financial institutions, the practices that made companies such as Sony, Toyota and Nintendo household names have not suddenly disappeared. It was not Japanese manufacturing firms that committed these mistakes for they have continued to hold competitive power in the world market, even though their financial performance has been affected by depression in the home market. Most of these firms remain strong and globally competitive. As evidence of their competitive power, the exchange rate of the yen remains strong: it was 300 yen per US dollar in 1976, 250 yen in 1985 and about 100 yen in 1999. The yearly trade balance in

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