Magazine article Management Review

Can Restructuring Succeed in Japan?

Magazine article Management Review

Can Restructuring Succeed in Japan?

Article excerpt

The news isn't good: More than 1,000 companies to date have declared bankruptcy in the wake of the bursting of the Japanese economic bubble.

Retrenchment has forced many Japanese executives to assess just how competitive they are in today's global marketplace. "By relying on inexpensive financing and highly advanced manufacturing techniques, Japanese corporations have been successful around the world," Wolfgang Lux, general manager of American Management Association's International Management Center in Japan, points out. "A closer analysis, however, shows that this competitiveness is limited to a small number of industries and a handful of global companies."

There's worse news: "Now that Western companies have improved their manufacturing techniques, a highly unproductive white-collar workforce in even the most successful Japanese companies has turned into a major threat for future growth and competitiveness," Lux believes.

"The top management of many organizations that tries to reinvent itself following the Western model has found they are unable to succeed," says Yoshimichi Yamashita, founder of Arthur D. Little Japan, who has been tracking the progress of Japanese companies to cope with the changes in the global business environment.

One reason for this failure, report Page Schorer and Tomoe Nio of Marketing Research Development, a market research company in Japan, is that although "the organizational structure of a Japanese company may look very similar to its Western counterpart, there are many differences in the Japanese management system that stem from the unique nature of Japanese culture."

For example, the Japanese commitment to consensus means that many managers adjust their behavior to group mores rather than to their individual wishes. In return, the group protects each of its members, but the creativity that sparks change may never bubble to the surface. …

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