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Published: January 1, 1997

 
 

The Art and Practice of Japanese Management

There are signs that this is more than just talk. More blue-chip Japanese companies are bringing foreign managers to Japan. Toyota now has shareholder meetings outside Japan. Toshiba is reorganizing every bit of its work, from accounting to technology management, on a worldwide basis, partly to get rid of duplication but also because there is no longer any such thing as a purely Japanese business problem.

The Japanese are also establishing global networks, in which people from "third countries" act as missionaries for Japanese management. Toshiba sends workers from Thailand to its plant in Malaysia, which has been operating for 20 years, in order to introduce them to Japanese production techniques. The two-way flow of ideas is already producing results. Both Canon and Toshiba, for example, have produced breakthroughs in audio technology by setting up laboratories in Britain.

One of the leaders of the multicultural approach (and another ally of Mr. Kobayashi and Mr. Ohmae) has been Minoru Makihara. Mr. Makihara, who was born in London and educated at Harvard, spent 22 years serving abroad and speaks perfect English. He is so at home in the United States that his two children work for American companies and he is known by a nickname, Ben. In 1992, he was drafted from abroad (an unusual move in a Japanese company) to become president of the Mitsubishi Corporation, the biggest of Japan's dozen or so trading companies. (See "Thought Leader: Minoru Makihara," in Issue 2 of Strategy & Business.)

In the past, a trading house could survive as an importer-exporter, acting as an agent for foreigners in Japan and for Japanese firms abroad. However, as markets open up, this role is dying. Mitsubishi's future, if it has one, is as a more proactive global deal maker, using its contacts and its people to set up things like power stations and cable television networks around the world.

Ever since Mr. Makihara's surprise appointment, he has tried to force his colleagues -- not always successfully -- to think in the same way that he does. One of his first moves was to ask all his senior managers to submit letters of resignation (so that he could use them if necessary). Mr. Makihara has also tried to promote non-Japanese. And like Mr. Kobayashi, he is a keen supporter of letting Western thinkers into the company. But it is a hard slog. Western employees at Mitsubishi complain that they are on short-term contracts, while their Japanese colleagues have jobs for life.

For the moment, people like Messrs. Kobayashi, Makihara and Ohmae remain the exceptions rather than the rule. But they have three things going for them. First, Japan's economy is becoming ever more global. Second, their strongest supporters are among the younger, more flexible generation of Japanese managers, who were bred on Disney and Nintendo and are now coming to the fore. And, finally, they are offering something new. Japanese management can change without merely becoming Western. That in turn means that there is plenty for the outside world still to learn from Japan.

Turning Japanese

Indeed, in some ways the world is becoming more like Japan, not less so. Even the most successful Western companies can no longer dominate entire markets in the way that General Motors or I.B.M. once did; they are also finding that they have ever less time to make money out of a new product.

By contrast, the best Japanese firms are used to overcrowded markets and instant imitation. Japan has nine car companies compared with America's three. Nothing remains secret in Japan for long: word leaks out at school reunions and through meetings with suppliers. Japanese firms have always lived in a world of "hyper-competition," as some management thinkers have called it.

 
 
 
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