Managing in a Time of Great Change by Peter Drucker

Author:Peter Drucker [Drucker, Peter]
Language: eng
Format: epub
ISBN: 9781136007859
Publisher: Taylor and Francis
Published: 2012-10-02T00:00:00+00:00

18

The end of Japan, Inc?

Japan, Inc., is in disarray. Individual Japanese companies compete just as aggressively as before on the world market. But no distinctive Japanese policy exists any more, least of all in economics. Instead, short-term fixes and panicky reactions to the unexpected are the norm. As in the West, these are no substitutes for policy, and they are having little, if any, success. Part of the problem is that none of Japan’s available choices looks attractive: none would produce consensus. They would instead cause division among the nation’s major groups – bureaucrats, politicians, business leaders, academia, and labour. Japanese newspapers are full of plaints about ‘weak leadership’. But that is only a symptom. The root problem is that the four pillars on which Japanese policy has been based for over thirty years have collapsed or are tottering.

The first pillar of Japanese policy was the belief that Japan was so important as a bulwark against Soviet Communism that the United States would subordinate economic interests to the maintenance of Tokyo’s political stability and to the US–Japanese strategic alliance. During the 1970s and 1980s US ambassador Mike Mansfield repeatedly asserted the priority of the US-Japanese political relationship over all.other considerations. The same priorities clearly existed in the Bush administration. The Japanese assumed, correctly, that no matter how loud the American bark, the bite would be only a nip and draw no blood.

Japan must now question this assumption. Will the Clinton administration subordinate US economic interests, real or perceived, to alliance politics? To be sure, America declares itself committed to the defence of Japan, were the country to be attacked by armed force. However, the Japanese are beginning to realize that the United States will increasingly exact a substantial economic price for this political support – and just at a time when China, Japan’s big neighbour, has become the world’s one major power that is increasing its military strength. The Europeans, who never subscribed to the Mansfield thesis, are less encumbered. In the next few years, Europe will be deciding not only how many Japanese-made goods to let in, but also whether goods made within Europe by Japanese companies can be sold freely and in large quantities on European markets.

The second pillar of Japan’s economic policy was the belief that its businesses could dominate world markets by projecting Western trends and then doing better and faster what the West was doing slowly and halfheartedly. Such a strategy, first used in the early 1960s by Sony for transistor radios, followed a few years later by camera and copier-makers, has hit one bull’s-eye after another. It can still be a winning strategy – witness the way the Japanese outflanked European luxury cars on the American market in the last few years, or speedily took over the faxmachine business from the Americans who invented it.

But these successes are no longer a sure thing. The strategy has failed in computers. Projecting where IBM was going and then attempting to outmanouevre it made the Japanese miss the growth industries of workstations and networking.

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