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Japan is at crossroads

Only fundamental changes will help

Summary:  This is the ninth part of the Japanese corporate organization study.  I started off with a perspective on the Japanese corporate restructuring and potential scenarios for the future of Japan.  Then I provided a brief outline of the history of modernization of Japan.  I also alluded to the transition underway in Japanese business and society.  Then I discussed how the Japanese employers are reconsidering traditional compensation systems and replacing them for young workers with more performance oriented models.  After that I pointed out all the new trends in employment and labor and how this is upsetting the traditional corporation.  That has led to redefining of the employer employee relationship in Japan.  On this page, I discuss why so many changes are happening that Japanese government and corporations have to pick the right path forward.
There is also evidence that women are becoming more dissatisfied with their lot as their numbers in the work-force increase. A government white paper reports that although most women were still content with their responsibilities as keepers of the home, only 13 percent felt that they were given equal status at work, and only 10 percent believed they were treated equally in terms of social perceptions and customs.

The current transition may be the most critical so far, demanding as it does, not only a revolution in attitudes but also a thorough review of postwar systems. The Japanese are likely to continue their self-examination for some time. If this process results in basic reforms that open the nation still further, Japan can avoid being isolated from the international community as it was before World War II. The pressure from USA and Europe is too strong for changing the legal hurdles for foreign companies to operate in the Japanese market. The environment for foreign workers in Japan has not been really hospitable in several ways; the result being that foreign firms are replacing the expatriates with local employees or moving their staff to other areas like south-east Asia, China and Hong Kong. The task will not be easy, but it can be accomplished if it is guided by both a strong national identity and a sense of responsibility toward the rest of the world.



It is time to revise the view of Japan as an infallible economic colossus. Ever since the 1979 book “Japan as Number One” bye Ezra Vogel, Japan had been perceived as a relentless economic machine that would ultimately overwhelm the whole world. But it is now being shattered by what is becoming Japan’s worst recession since World War II and what makes this slump significant is that it coincides with Japan’s loss of competitive advantages that supported its miraculous economic success. Japan is completing the progression from an “economic miracle” (poor, but rapidly growing) to a “mature economy” (prosperous, but problem ridden). Between 1950 and 1973, the economy grew about 10 percent a year. Between 1974 and 1990, annual growth averaged only 3.9 percent. Assuming the recession ends soon, potential growth may now be 0.5 percent for decades. The drab numbers refute the view that Japan has discovered a new model for economic growth, vastly superior to others.

 

Continued:  Pioneer Electric case study

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