ACTIVE LEARNING CASE Doing business in Japan ‘apa isthe second args atin the wor ar he forage msttoral ms age sal 30 very tent tom ae cumrespetcayearomeaty on ‘atta es eee an pee ach Tees format nats There rumba eas or te bare a outward Uae ad foe ed ester a Iipen tra ough compete mr, carted th ‘rary by ninco tr une ros {sa igs pla anos cue Stneye nd eo sce org i an rn ‘thes many fem led aro ye spd a suced They sean hw nse Sarg ey. art tetany 19 pan wa eae ot opr detain but rece The mae rb roan tee war eg ba conse fn apn incu fice es, a igh bare, sat fel pest ard eptaed)mtena, ter put sas repre mao ete eens {eles epg goes owes sal pu Sense the bk lt elmer aes rt paso Staus ment Bat ay apr ere ut wok oe {eee tims Cover enpoment easton ey fae hana sure manganer pac a aed 6 {heeft eure eben neces ‘rae of maa eine ao ce en mary sienmng tom he rene ere nebo Sa “param tune er a pi) and de (oeeen pods, tos nd tale Japanese frshad lenge rézbondhps wt) byes and sips acres ecporal Us tht fanshr thes tsb dng bones wth ve cod ec ocean platens eran 1 frepes nd forgn canpane ska ete ons cna naa cau te bre lag enka et re of sce proton, by elungss thr 502 by the apa gone ale ne 19805 an 905 ota nb yg oer lees eee oa ea, precy yt US anne ar at ht 101988, fr eames goverment bod To th Unease and apo tated te aoe "RUrwnt nfo apan Gt or op 195 ba Lge hel Sore stra aati ‘snd ety upper en stato res lage ert esi sstonal tres eh fas vas pain chleged in 557 spa of anther hihi cse by Kaa apt Fy. Ths ie he se {are 4 Met cy ey ft lr oe leptin Conca allt kan Be Untied Sites (2 he Wart aes Sey cae ae th cha tet and Cao o anc ae ape along ‘atonal peter siucues nd atenpng fo ete Cony oa wee hore aston or lougn sin Sn sp steed trem doers apres bss acres le te chan, maragenen: rac, nd cara, fave apr they a see Fregn mare ave 3 cle compevon wt nares compas 6uy deer nd erate rece a yc ses aan ad ey san hy nea ems thensees eo innoatie Sic) Seep ‘snes mab ar ene of ms compe ‘Moe feat the anne owt nears do fe pan, Gonna! dregs, lua of fie tes and cng cose reece rave elbedforepn ston Forgn commune a als Inland pris fe reat, apd uy cosa spac Inezmuton con anéimpommants he misly of ua pearl a0 ee snp. “he pase gover ta spo poe 3 centro fs path oar rr choce {hd soul spec a pat ee ll me 0 ‘ie canpstion Pi at tion are foal np andra ema ho end ners oh Commarea Cole par. songsae rovrentsn Sb ret xb hepny ee “Terese, Ponew, moe undone cane king piece ate pad rae oot ran es Se tang eon nate of Be 1555 2 ex 200 pay he igh oof mantaang an de Pres comune ee a eed a ow el otc ad neers eso by fo esd Conger tere eons hve board cnr, peng up sures sunbed rain rps {aa lm, ocalnd ciel oat as man at oe ear rans ain and asd fon {ims expanding tee presence oe a esimor ose ‘hag condos arte contrac pose the Japanese mate The enh frm AXA Nae tence ascent et pa second pears ae Mle, te German howebid appanees company hr wed port va Mis he ate 1960, esalded a stay 1992 and ree expanded neo (oral pets doped «new showaon nao, Byam te Bren eum cast martes ab led Open pan 68a au a 39 prc cores meer 2001 Reno xed ach 0 680 eas va mass metas and depart ‘ent the ape rata bar he gtr Speman re ty our oy, no err Co th aa epard sy ons 7 re ae tl ny 1958p) Oy Ing Io Newari 2003 Th ot conch. ated byte ais etd Copacton of n30 (3 gormert ie stp nm2003 sucha he rnpeomnng loaf vd bt ets connie secs ram mongers whe have merece hs change ‘Soenphuize be conve emarane of win! Jagaete aries Fr newcomers thy ug he ‘owns ‘eter nee lars * nese hat pan moe han aye! mat “aus ng” ety praise ‘ood ete copy gute + be pane wate estore) and sow ng Commoner: pasar and export reptton 5 + Stow many arcs cpg ‘oat and ak an hey ve obo + esto aie oes series mata, and anager she + Conny norte, Say ahead of theca. + aon lea, ct ote An hast ee ese ees SS ecceeeeenenomment Soe eeWatkin of anges re foreign manages kay to meet when tying te setup 2 sui n Japan ane ert lee empoyed ow have Aires twos itd Foreign fms ertering he Japanese maken the past and how ‘mir nowehnging? ‘As part ofthe grea growth of gn det invest int Japan, wy ae frig ems incesngy ‘bla wll to engage in meses and aqusions (MAA) wth cl fs? Despite depend changin npn ar the erring of lpanac corgernton vty ll near ‘unt for foeign managers fo untan omthing of Ue ht and he contest whch apes Duane ave eave? INTRODUCTION ‘eewen 95¢and 179 pune GDF gre tn uaparad serge anil eae of er en ovr the time the row sf the United Kingdom and the United Stats hs pevid an sar current growth rats in Chis. The OECD il oe this byob evingby the conrentional mesures of economic performance (sncame gow, as tio. unempbyiet pen has ot-perormedall other OCD economies sheet into the orunlznton in 164" How dd this app? Sing 1975 uni ents average ute of growth as emalned at percent per yar “Then that al ofthe 1990 he apse canary grow thal the OECD ancrage (ch wae38 pe con) and by the and of the 1990s eer unprecedented mgene growth, shrcking by ore than 2 per et More eel thas shown ss of recor, Baris sl underging» paid of esac asi emesis wth theend fa ‘of comined goth POLITICAL, SOCIAL, AND CULTURAL CHARACTERISTICS “The 127 millon peop of pan are hear concentatdin the const aeaand rb lone beens othe mouniainos naar the county Ove al he pation Ines inand sound the thee main mettopola ares of Tokyo, Osa, and Nos Up unl eed ofthe 19805 np could be characterized polity. scl 0d col tala igh bl, conserve and homogenous county. Eeonome change nce ‘cn has bes bh cen by aida ding lte tor change ars ol te eens, "To undestrd the carent dears eing the pane markt ee ane ma ‘ager we mt undentand something of spoil and cal sage ‘A traditicnally strong government role in the economy “The beaches of he pane goverment ar mn slr 0 on te Uied Ste Lege ceca anja Legiatve power veted in the Dist ich consis of 8 populrydecied Hous of Representatives and House of Counc. The conservative [Lira Demperacprty a been in power fo mot of th post pve withthe sp or ofthe powerful business and aprile abi,Executive pote rts withthe Cabinet. which i onpanned and eid y the pine rinse wh scx bythe Di In ado othe feof the remit hare se 17 minster dion inthe exctve branch, adi ower veste inthe Sopreme ‘Court and hee re eh igh outs and numerous dat courts Vought the coun ‘ey Ove spans vided it 7 prefectures ae eal pic abd, eading «ies. town and vile esis on xen power and operates win the scope a the ‘aia "Te ky ministries wee atthe eat of nan post-war resontustion the boom year of pid wowth an, args, some cements of ts more recent reson. The i cum rae an iy PE, rated in 250, areal ne incest ofthe Jong-ending Mini of nero rade a adusty (MTD, which wae {195 es spon fr ending the cine libration af the ceonomy ond ade oul inthe 190s and 97s uses song conta tar promote and caoed- feat speciie chloe sn industry groups to spearheal the national economic de ‘elopment program, Thetinstry of Fase BO wade igh ifn i sting the ‘luting Dae Kangyo Ban, Sumitomo Bank Pull Bunk, and Sakura Bank Comme sn nee oh ts aah have avast vet more toward secport cet n tun a heprab ‘comers compared wit Weer banks. Unlike ari-legth areolers in the Wes ‘ih short term repayment orion pee banks andar shaeollers sy Sted companies siplen dtrbutrs or seid compris) wl ave bal ong. term commiunent to upping hcebu member compres an hi employees. As 58esl capil mares in apn hae nt tionally empaized rern on insert (ot) and ividends. Corporations have Been much Gee orm the contalts ad de- ‘mands of shares and alowed to manage or lng goth and conte eres ouneton and ly to enplyes This orn of ep an sigan be ns entinualy growing economy But aso has weakness an can bean nefits {oereoure lotion at ae become much more apparent in pa’ reewionry pid Stbsequeny dee have Ben fundamental changes to the sete of epital matt Japan in cet yar aw wl se blow.Atom ine Misa wa do be the mos ih wove bite in Toye ‘busine dit, Maranodch hin rst was ead Mii Vig he 1990s it ad ver 216400 employe n busines ranging though the nancial mana facturing, eves ad trang sects om heat ening and oo aeosce ad beer The 29 compris athe heat f the group held an aveep of 38 per cet of ech ter’ shares high proportion even for pune corporate woups These companies ‘change dete crossnanced one another a ge ult veel a2 operate esetch poet forte beefitof the whole group Information exchange Sd intertem crordination inated tthe mot eno lel and he rset ancien ‘of the2 cor fre stl net for nahin Marunouchi on the tond Fay of ach month forthe tech nolan Pay Cli, Within the 29 coreconpanerarean even caver bh yok ni group which stare the Misbishirame. The proportion ofstalesharcholéersamong, Tes Can this graup ood st ovr 7 per ent in 996 an oe ice lest about 33 par cent Tae Mann Se whe bo Interatonal Busines Strategy in Aton Kirin beer ee ineratonal decree "ar ee? ‘ne ofthe companies in the Misia group etnaaes eee The newer, etal hes ate headed by large manufacters (Hach, Massie et hm 48 etic Indust Touts nd NEC oan) sb ent og oa prtiaar mana °° ‘acrig sector Here he eltinshipr are betwen supplies, aphip manufctrer and Aisribtors and ears in verte value ein lose Inbrmation exchange, cos cots ‘hareoldng.perionnd exchanges adjoin ventures upportexclence in suppl management ew product developmen, standard IT and bist, quai and serie ‘ssurnc,andthesharng af management bet practice “Aone ime Matshita or empha rend 300 prime cena oer 9p lier and over 00 sale supper tlowe eels hat hao at a= i or cooperative manufctuing tht Toot by comparion, nce had 168 Bt Neen Pen supplies, 400 seconde, and atund 3:00 thee, coring to on extinte Small Srp Th a oe ‘nd mediursdemteprcs (Es) the lover eve ay ron twe oF hee pass eae atm tome foe 30 pr ent te even making them Dg cooperate, a ETI Velling wo change component price oe pein: to the burs requirments short ‘ote sneer dependent he fortne of manatees ther ptheerchy meses ‘Rekive Wearing cheek Fevew your nero Ave Leg Csequesin? sd make any hangs you Ike Then carey © dno te now changing? The epee which ees newest aig is ces ears rad ty ced on heh nay obscene ae 9 De, Sree reas ave ey or lrg ion fr dsr bese racy cl rsh be tn monger tren gh te Far non “Tadic esse up ver tat ro es wl te Sts age en cet gael ms. pues oh ae ree bereft pod sce Corse cpr haing cepa ae eet stow ase bas nad al Wana paces ‘Scr he en $n, hepa usar mom rp arose tran 2 tre chose bo, “ig mom emertnte fannie goed oie seen iw reg ee ton Sper ahr ave Bescon et ae sn) We cuts he Yao ree ace apa spa la ang ua tape 55INTERNATIONAL BUSINESS STRATEGY IN ACTION Kirin beer goes international Aten, smyth eatm om ands aba 0 fo ‘soe a Ke eco an ky ba (eg Berard gully Pests logel oe ‘hewn lagan donor cma payee eine gis Ach Spr oe into ‘in has ren ron be oe 130 as wi) ps) Kn apes bn Soe re "ip letghagost tonert ow Oe Cena eco arth cary haben ing share of ctr te lsusb tweens ‘sare A Be uch cate cused Sper rear dont Pen Ast har contrat ete ews rk ote th) bee pods deeper 2) sucess marta ae wath cme ned young eo mans ba) aco ben mee rade unedou Wb yo ene Tr revapet on li pet le a a ‘yarn sominncirg compen sat tk ‘oo ecko gare Fr ample cite Aa 2c ny on dt a pa ‘gg hom xl thao ae, made ‘Stns pao th at es yy art ‘3: rp iat ot cb com abi erty ‘She angi Reape Anat th may ih 25 pe carl he ire be al opted ite Tr 38 per cn arin 934 Ah reo Kn 9 12417 pe ce te frat at ed op ‘eta $109 en 208 ea ee 1318 fan, ateug since age of te psa base saga one oli mania ins ang ce fared “eae geod ware of Dl bas ES SA esetan 2 for w marian i gosten We Japan rae: kan Fas ben work 9 ot ae- ‘rl nage ain ae per tn bans eer nee 2 on en Sct ome he rage wh ice evs el Ren he eg esing Sraberang tact Unorinsy tea ato 8 rumba ales The bps nea wtb a ‘ror arse er Sree st tht Das tthe an repns ak! ropes nis ares matt Kein fanned arora odo a atin 1 ate ag te Unt ‘ahs bur Fr elem 958 come raved ng a praesent a one Ke tert need as gue rh peo thet of sun. 00 nr et oe yg (Sse led ti se ne je in faa bee cy eganang Aa Chia Size) gore fins mon moran foegh mae. Tee feral separa bw grt aes Ch ‘ans op nso eran Sat conga 123 goer sar conpehios, howe 50 Sis earn etry noes tel rp {erates and eed band mateng Sokeema he is atin py a ‘sputol Missal a ret ae ye sibs roupha aml sds neces 110 ion, ‘ed thee ae spr 29 cae abe ho Tr ge by o-vceip id be farl e Draup teremses a is nea apes nape tet ty an el pon oe st er hp. Fr ear. ‘hn in cr hs Er rts Bak resist is Mss Hey et isang ‘enero ra, a le ner at a (pop cmp ese panotral w waei o Se oushokey sweets a cane handy when air falas For ecg when Tac ont ety Osprey 0 perc ne of ee ae aaa See ae ea The Ma pou 9! eet ot he Raves ‘er Getys so. Th gop ha abo rae portant Distritution, retailing, and customer orientation Asoc with the ie ndutry pouring bore re mltlyered disribton and {a neki Japan At is hog twas estimated that there one etal le or ‘very 7 peopl in fpan (verte th: US rat} and oer 474000 whale stor. These re sil ergonized bath by ron andby sector and prod actos Japan and tend t9 Be tare othe lage numberof al ears hat verve thecal matte hits tem of dtrbuton, bound by song fcetoce es betwen sles and byes each level ad substan ess tothe nal reduc Again tit peak the American Chamber of Canmerce in fpen (ACI) fund tht owes 48 percent of ome seco roduets In apn are sol through excel afiatd stots and about 9 percent of eat ate Abstr ough ese desis Margy elements of hs compe, highest stebution ein in fpan today. ors in pated sre notorious protected apd reat dower nd moe expense than oer ‘OECD counties The mltlereddibuton Neruchy has become move snplied, onan driven by the gosh cunt stores and cost edition messes ‘Utd nce the song pti lence ofthe average panes consumer and, pegs, the average apanere mile manager responsible for company purchasing ply, roid afm buss for the covery indus and dsb nfasructure Ose She lnayo¢ Gale comer goods mths the Joanie hee log had on pe ‘rence for panes rodents JAPANESE CORPORATIONS lapan home io round 2 per ent ofthe op 100 ulstional Sms ts ot jst se -xenomy snd are mthl, bl major ours of global compton Venn erie inde pops Rte about apne meta ae a rt nacre nl sometimes ‘holy midediog ‘Ar one extreme during he 1970 ad 180, Japanese fm were se oekempif the bes of ll management races. High pole stiles and books on the fpancse threat ‘ed peer ar abot the compete thet thy ose And romped researches to S07erate 518 ‘deni whet wae diferent about apa and item and how ch diferent ight con ‘re sstained compet advantages” Ar the there ofthe extemete enim ‘export lures ofthe petod broadly om 19902003 have prompted wholesale et tam ofthe apace mode “The rah es omen in Between. The apaes economy cur an buses 5 tem underpin bot elie tenga and wetness i apne capi The former ‘rt ey evident ding the prod soil nd poll sb ar economic pom "upto the end ofthe 98D Theater have bone more sparen nee then ‘ry broadly spsking Kind f panes corporations hae exited for oe ine ‘nthe one hand tos fms that have escaped the effects of he extended eso, ach 25 Toyo, Hon, Soy, Canon, Sharp and Toshi ne Been lest dependent on the Tapas mart (mor international or om ine They increasing sold products In markets oui lapan, engaged a FD abroad, ad eed ls Jane of ‘management wel ble the eesionry period Tey aio reptset the inti ‘ihc pon shied it ghee of export competent inthe owt a hich [avy we know aor about them inthe West! ‘One other hand sarge numer of ms the majority ope: ompaie in ft ‘ncudng fms ite Nippon Sec, Sumiome Cherie, isubt Kolms and Dea, ate less geographical vested, They hate lng remainel tore dependent om the Japanese ret, panes supplies ond fpanese was of ing things “Coniration of th divin come rom the McKinsey Global Tit td which shows that although bor procivityin apap firms cho those shore) 20 pot. ent higher on average than i US fits they ony represent 10 percent ofthe Japanese cony- Te other 9 per ent of apanse ems have an average be productivity Ut 1560 por et af USlevee “ile 174 shows the top 40 Japanese fms (tom st of the top $00 mulation Sum) Ht ao cafes the ms cording to thir labs istribton of le showing ther rave dependence on thie domes (lapse) mart All ut very fo are highly dependent om tet domestic mare, and nly Sony and Canon ae global in hat they have over 20 percent of thei es in ech ofthe tad replans Dept the above ‘mentioned variations i the Htucures,sategis, and mangement ss of opnese fs, thee ate some commen, distinc character af the stot apanese em, atv ta furopean snd American counter In oe ofthe mot extensive ties ofthe lapaese enters ser Fra highs high producti faneonal peciazation, and manuicturing adopt he diin- tuishing links of Japanese rms. He ntfs thse attributes at thee connected Tee th cary. ir and th iti network ™ "The aris occlu nd conomie charters above combine cee cera regi and weakness apne ns, roms wie range of sues we con del oe of te main characteris othe geri apace management ye, pin adn = Eee communications nenally and with outside ems (decentalae, horizon information lowe) andthe ue of belts or eos niptinry. ce bsines and crow fintonl workshops. © Les separation of HD, dain, manufcturing and marketing oncom © Lilsinempoyment aw labor mobil. and bsnl aetnentin ining There Isao sven empha onem-thejob ining ad jo eatin within the rm © Manges as problem defines. ot efightrs and as ductors and mentors not dlp- loan. Ths uderpined bythe weak inks beeen performance and pay 20d he lowe wap ferent between werkes and manages in the apt hierhy“able 124 The Top 40 Japanese Hens ota Gare a Se 3s "7 eb = Sa ms 3 m8 ne “is? i" mob "exo ue one ne So a en Stace be te ~ on ux} Con Do 78 ar 203 e task tbo francl coup 312395 ae 103 ° tae sy races ny it “. FA 5 Salita ase ° ° 3 5 eos ne <0 " a ° etane tse gst aa us 3 Despite the importance of hierarchy ad job tls, serge CEO incomes in Japan ae ‘arly meta time the alae of ert Inthe US (ond ines the UK) thee isa much bigger remuneation ap chan i, 1 Suong groupltsam eis loys, and motion combined with conpetivenes beoween eas 1 Sri formal rary (sed on senior. ankand tao underpin ci sts) com ‘ied wih song underlying normal networks and a tendency toad conesuebsed 519)INTERNATIONAL BUSINESS STRATEGY IN ACTION Wal-Mart takes Seiyu ‘hepa ation sae th ema fo 9) fst med al ete Na 2002, Sal Mar pra prcet ne So hh tigessipermret han pon leben open Sony se one pot ne copay pean 207 2 ars mah ay uy 1 emporuntes ie arse mae wk ap at areton by seni tard 20min nee ‘Shute 5st a ne tng Walon corner ae “ois sre onan Ma beng new ma agen Sl, stole sup etd oo ‘ets mot fom omaton a a oe 2a power uit es leg 200 ses aster nes ant pon eee tet ‘ated San mates sh Choate ope sor) and sou ra whe thas 1 Te 20 acon’ lass ge Sele Rt Se La ch ‘eared ae eal esos wie me gen ‘ts Large Sit SLs hos eed Waar ny Sc lpan tad met now ere te utes The Ais on ha tg on ih (eran bed Nah Aven Ses ub tte ‘opera te neue mp on ines wt on sara gaye ar 0 rot ed ofleng moet counties We ne ay TS he pores ooo nt Wait tants nests ey wwe Rey Sued bee thers tae a pe ae er cet he sats en pau oe a tbe tn Hoe bie dren he pct ore cr catg Wire stg se enc of _spevscomlc py ptm Caton nih ens ‘pn 2082, 3 god eral Te Fe fem has en ‘el Bort ol apna posta pane er eset be Cara secrpachaeg pt Te torres bot ack farferty on eae aise ‘ips wo sh 2pm wa tha on. ‘espe eae y ge pata eas Haas ‘ening sutton rane ep rg fos squnsc-and hn se en ls ace a3 parr cms, ‘isl xcs ne Used Soe ob teed onl an ic and br eae Th peo ‘Pe ovinsoNots Anata cs rd tas owed Gi ‘he carpi bale vase se ata oe wi ge ring t pare ower gy ‘ore rere Dee csson and rain te Spann eon Saree abr xs a arg eH ttn be wat Tat ren chad peril seve ave hie mom tl wt na pes te hab ‘te Ue Stes esos ined by carefou Sow Pat a att sesh leet al am compet Crete Destoned ln the lanes mare py 35306 ‘Sonata Yh ef sinus spd fom se es a, en oes uepomes feng a sachin state 1 erga Fendes* tales ented ange of en prot ar isa sul, te company tow a eh sae 9 The ofa on eth pote nape case eins ‘tate hih demand a erable oar the une eed ost ean hele ‘nt tered supposes le US ware eae oe, sce edn 183. tat orc ana ean ft wo ee ‘hem money The eon os ater Wie be Iiprese ean anor ewes wea cokes ha GO par ae of US 532,00 ty haw on age (ny 33 suse meso ing pc pe apt or et es an Araneae ot as an he "ed, Waar haben fo aos sta gyi pines mete Tw aly of ris at ronated erupt be aca Invented Say Sor eotoran oe th ns one pepe nt 1 tam opposed rep aged vary od n ‘ther coves lowe eds, Marts or oe om to foo tnd fh aon one foe abe (isha bw ced eating 5 pr ct of wr {ace ch lg err say Sinan = rl wages taka jng on canst ples 6 Socks pce hes (ter fcors adarg the conpays pens, cay fom pan onan cri oe and ‘nigh anputine entrant Une he Seep Us consume pce in pe vee lg a se $e 1988 Goh fared sung Ye Pata st 525sight mace tae rahi noent ne ne By hn rene srs cad ne eons thoi (les Ined a Seuss 1 Compute Eo fam and earned wah about pane sue: (Doetic l egr Speo, hee es ed ing up. toed pcan sdeson sent Iman Wala adie hen Gov pang thew 75 Wola sept eee napa ye ed ot ‘ope lt pec rung oon fe (gps oe eile tnd rpg eh 2 Use mega sts Is toe fal ero ee ‘usb ge he bert oa rope In Rae rages i adage aw er Sens ull op Ses rom sth On oho he fem as hang trot, See oe tery bers em 2008 ia rt ay sen gear oo expec tetutdanoter nt oes hau. epee ert erntead npn the effowey of Sn Sipemares Cafu ts ewe e tue oe sy evens ‘Vator sbeatody ten eared he aman mean sd on a eo aes ‘panne gr ssc Sneha Cert puns 1.728 mergers and acquisins in 2003, jus under the overall tl foe 2002, which was» record year Of thee, frge-based Sms ised 3 ol of 156 a dase xamples in Table 17.6], up 25 percent from he previous yor ‘Whe 17 Male “oubln® MEA i Japan in 2002 ‘ean oe empary ty Speen 62 cig mate ‘atte fan remo 2087 Se reine Jimny 002 Sey fonts Map laa es men Sous pine Siocon: Beas onoiry feign Inyo festa fons ge ae (Chg re) (che re) (aon) 6Reve yor ans Ac ure Case qt and mak any hagas yu ike The caesar ‘As part ofthe grea! growth of org drt invrtran int spa, why are fein fin ‘ronan sie ana ange eagege Inmerger na seqafons 6a th em? (ne ne hand dreuson ty Be poets gorrrmert hs heged io make ear areca yas or fern fms to acqure panes fs. Changes n capil mares, ome are y teaser, ave. retell of onan cpt to reduce da burden apne bake me 3 Mh more {edn MBA «meant recor and oe espns fang loa compas Mae sant fac ae, frst, te rong opimam among fre fms regadng the are prospeol De paese mare ad ther conn MGA a3 ress ofa Second, ee MBA cn bepaly able fen econamie rte BBG an edison of the tei range cere by nae manoae, RESTRUCTURING CORPORATIONS “Te nl corporate reaction othe ecesion waste filling profs apa of eh sl tend hat companies could weather sing ler momentum from the previous desde, Japanese managers ha ie experience on how o handle the adel eerctring and owning that becrre neces pray the problem of lor creat qi ‘began to ctode domeste manufacturing campeinens Labor cas pe headin mans {Gearing were 25 per ent higher in 192 than in 96, a art beau therein whiter flsr employment wich expanded bya kh een I and 9 Managers een ‘arcalary how in erguiing o overcome the owe eft and admins int ‘Seniesa ths, combined with her ice in eating employes eae inthe rp olipse of corporat cunings tthe ut ofthe downturn "Te impel af the corporate resrsturng wat ces fom the seis of companies a ‘ouncingjb loses in 200: Tesh eat 1900s Fats 2,00, Msi 950, nd [ison 2,00; even Sony sted 5,00 employer to take el tetreent. Moe rm at thei unvesity recrutmest programs pushing the unemployment te or wider 24 year ols to over 10 per ent Someo the are buleupes i he caso athe sa of {he new deadening Chioda Metal ifeinsrer with det 250 bon yen and ‘he ete Sogo in Jl 2001 with des of 2000 lion ye, Despite atonaizatnncomaliation at gin growth of MSs inky sector Japanese companies are sil having o estutre hei operations seta tbe ce oflonger erm pressures ncang 1 more expensive apt, _oning competition rom low cont Asin producer, 1 Gelning ples of ey manuicture, pata eeeoic anda, & adloing domatic economy. and _posnginrsds into the domesic economy by frig ompeees. 2728 ‘Thos developments knock fort a aan Fa nal hy strong ‘eternal and chaning the err ang reatansbips The main changes ate smite blow The decline of manufacturing and distribution keiretsu Because 2 lnge proportion of Jaane SMES ae subcontractors to lege companies ‘win the malted heroes, ecesion and voranzaton among the ins hs had 2 rect ect on sarge umber of SMEs Reacting fle couple withthe spre ‘om ofthe ye ave posed om down thirty rom pemay et) subcontractors ‘trough second hand fourth-evel indie suppl Mad, fer example before ‘bengal by Ford, ated tcf ine sonra fom 6 companies {0 16 thereby pacing onthe expense pushing de input prs o companies, fare down the chan Tsao happened othe Renat-Nisan kerr se Reel ase Renault ands inn ain st he a of ths chap). The item of esrstarhlding hss become increasingly diated trough reductions sn tl eq stain their oct con arge menting Grin pan 07 ‘veld ging tel ual mop preted ole of busines ove the loots But tre eenarging them tacorpete with exch ther with 3 new epi on price sthede- fing itor More inputs af now bought om aoa os mote pecedsven dome ‘ska and fer Dor of import bas ed “There fas sl ben en in he we of excuse agrsmens wih sng tribute ora organaaton nthe ps thee wee the noe en in most sets is ips ‘ohare mail sgeements play aitribtor and rene apsint each oie path up ‘se Incesngy no, mpc grcments ae esped and he adele sale lnk eed at be ed bt competitive ith many pes cornpeing at chee i Te impetc are The growth of outward FDI and off-shore manufacturing Nesty half ofl carsand machines made by Jopanese-owned companies are made ouside Jap ths bee overtaken bythe United Snes the args producer chiles and by ‘China athe large producer of color tlevisnslpan now at iar ling ‘rampl ofthe fest presues wat Nisan sre fis 30yex-ald Zama car pant er Toko in March 195, hes apanes car plant wo be dosed since World War I nial, part ofthe plant hat made 1-2 aiion vis in it fine ws turned na 1 precdelnery inspection center for Fort veies Zama, with loa! popu of 115000, lst £00) though moat ate been moved cewhere wi Nn o ound jobs in oe servic nd. The dectine of lifetime employment and changing HR management practices Many ofthe changes bing forced on lapse manage ae clu boo But enor. ical neve. One ofthe mos significant i the erosion ofthe ime employment syste, hich very ny ever oe os tradna form. Unemployment ad ony vey lo dering huge soi sin lilly row to over 3 per ea (cnofil entimates pa the pe eater 8 per em Ey reverent horizontal moverent of empoyes, ring we of perormance ested psy and significantly reduced wage increases and bone the annul wap epoviations| in Jpan sk siglo the new prewues on companies The large compan edad‘he wal intake of univer graduates oes than 20 percent of normal evel ring ‘hecay 99a nace mere-asl remuneration schemes. Then change da ad Sigaicnt knckeon elles, nat east the rie nthe sendy high rte of mies, which ‘wen op by 38 per ein 988 nthe long em fap wl have an ceasing ele Inboe marke ith implication fr l ampere ofthe traditional emplyeesmpone rele tionship chose traning and company loyal. Diversification strategies Diserifcation satel ve been he cornerstone of sn corporate esrctring plan some scent hers aot ® NKK, pss econ get seins, ea goed erp. ‘A the eginning of 1995 previo ne-making marine engineering divin turned sn operating prof of snot 13 percent onsale of sox $100 millon (although NK ‘eral expects to maka ve of ens the amount). The trou in hs partic lor disor was duc textes and isk) investments into areas ouside siping “These inde the nue innry,anictarng an indoor dope and an atl sr {ng bosch (Wid Ble), sing core ecnolgi from tha own tet disor, nnn to dversicaton witha mansacuring the capping cot state for indo pode ‘on ha in pail sclera the shi ovand sevice Relieleerningleheek oe you arto ve Leumeg Cae gun and mate ay rege yu ke Tes comer ou © epitewidepreedcangein pan andthe rescuing of lpenee crpoatons wy Important for foegn managers to unerstand something tthe Neo and te contet a whieh \tederconptng va gas bane clang th non of wring orhem tee tet prs ‘es a he sae eng aa weak a he ef Be oe Cepant se crab so cnet fin. Ter pio he cin athe ere entinn. hy ee $2 andy nee qa and soe pros Nargesin fst ere apse Pate eed ‘ow abut th ener cont nan Seca rose nage th el gore see ‘tenusnes maseci, ness nies bes enue, tsa eres peers os {eres on the my ob ters ae ans tne acta apne is ea rod ‘trnign enc dt on te ben any fe ha depen pr done, {mot roan smart of veo apnea managrant prices Fos mana wt ble de Sond sete opto and agente caerges ey ae airs, wen and MBA wth lipo congones ty Ino somthing a hore eran. Examining the above changes, Micha Bute and colleagues anya th challenges fi «ing Japanese manners and came up with the elowing guidlines fr snsorming the Inpanes company?” 1 Creatine, long-term srateit—rahe than iitating wreak ut of the consensoe and do something diferent, 1 Expand the oc of operational efetveness ie, improve ofc level productivity a wells plantleeefcongy. 529530 © Learn the roe of industry sate in sructure—amonga number oar hangs, Sem hol oi geting lacked it price Be ly. 1 Shi she goa! from growth profiting on mare shar was ly pone Wit "patent cape to Keer and adona expt mat) sarholder rere wil pus for pvormanse rested evans 1 Reverse wnratldvericaton—pate down 0 you cre competi nd tote firms do thers, Uptate the lope eronizetionalonadel—chang iterl prac, xy fom itachy and conse toward merry and enepeneurhip. 1 Moveanyfomineremental change betme motel and Fortran his coauthor select number offs tha they sugges epitomize what eden tera he sore changes Nc, or, Mart ed Fut Desh ee Se lt re with very good abl make shares in che aed. etme 1989 snd 1998 ‘hy achieved an average 63 pr cet return om se, ie tres go den (erly ai ‘ered ete) fame cheed jut 09 percent tum ve these pred "Te bok discuss the sate ard organeationl practices of Nie, Rohm, yo, nd Shimano (he bce gene maker) showing how the hae moved oy fom te cn Sans af the todinal Japanese corporate form. Sony, bower raed 2 gabal Japanese frm hat bat ated sce tothe new resis with maverick CEO, Nobupu He, delved sesegy and accountbty in four marke facing dione sek options or exci (since 197) and with 45 percent of ts sarholers beng son spans. ‘fl ilasttion ofthe changing views of apnese managers ae fom spl ken of 16 company pean asked ta ote forthe mat outstanding orperte manage for ‘he 2st century ny harvan and CEO Nobuyk eloped thei second was ek Wl, former Gena Elect chairman and CEO; then etme Hos Oka, Toyo Motors churman: Cros Ghosn Nissin Motor preside and Fuio Cho, Toyota Motors Presiden. Several deemed busine sh Soko Hom, Maar Tha, sd onosuke Matsushia vere pred on the round that thy "manages who woul sie= een any ea and in shy county” "Cestve destin” was voted the hy concep fr managers inthe 21 ceatury. CONCLUSIONS Japan contousin ape fundamental pola eonnmi and soc ansormaton, Corporation bare been fred bya drawn-out enomic reason tale rly te wy they orn deve. ori steading dept the depend tte he [apineat market the are unprecedented oppotenie fr aliace and leone inl ing lpanese rms and for introducing new products and verviest paneecusomes “Thc tne period of internaionalation ae Japanese Brn hit investments ot Of Japan apd tempt fede thee dependence on loa math, whe oepnipers ‘Ma this haps ha lose ste dona! way of ing bs i fap he unigue pital mares Ae demanding cstomer eine employment ed the ad ional strengths an wees of apne Firms The pinto hiss tht hese ate enue ing fics of loans busines and they undre the hy isnetvencs at eolborrs