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Chapter 8. Management Strategy and Organization

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The Japanese Industrial System
This chapter is in the book The Japanese Industrial System
Chapter 8 Management Strategy and Organization "I gave the Japanese no secrets. What I told them was what I had been telling audiences in the United States for years. The difference was not what I said but whose ears heard it." - Joseph M. Juran. 8.1 Introduction A facile way to view globalization trends is to assume companies have products and services which meet common demands of consumers worldwide. A McDon-ald's hamburger, a cola soft drink or an expensive brand name Italian shoe, tie or underwear fit this category. It is true that expansion of international markets, and especially national economies within the triad markets, reinforce this image. But globalization is much more complicated: a strategic necessity for multinational firms aspiring to be at the commanding heights of technology and consumer ac-ceptance. The issue at hand is capital and the soaring costs of technology and new product development. In the 1960s era of national economies and the pre-knowledge production era, unit production costs of capital goods and technology were high, but not pro-hibitive. The reasons were simple. The shelf life of equipment or technology was incredibly long, perhaps 15-20 years or more. Even General Motors, the world's largest manufacturing company, entered the 1980s with two-thirds of its North American automobile capacity more than 50 years old. But age does not tell the real story. The problem is not age, but aging. In tomor-row's economy, the shelf life of new plant and equipment and production technol-ogy is three or four years. Consider the office. In about a decade, today's modern secretary has gone from dictaphones and typewriters to portable tape recorders, computer terminals, mobile telephones, fax and microcomputers. The average secretary's tools - nothing fancy, nothing novel - have declined in real cost while increasing in service capability to unheard of productivity - the ideal of instant global communications. But the real cost to the producers of this equipment is another story. The key is not the producer but the consumer. Again, take real life examples. In the knowledge economy, where technologi-cal and engineering factors dominate product configurations and performance, it costs an automobile manufacturer a billion dollars to design a new engine or a transmission system. Even where parts and subsystems are common between one model to another, the real cost of developing a new automobile model is astronom-

Chapter 8 Management Strategy and Organization "I gave the Japanese no secrets. What I told them was what I had been telling audiences in the United States for years. The difference was not what I said but whose ears heard it." - Joseph M. Juran. 8.1 Introduction A facile way to view globalization trends is to assume companies have products and services which meet common demands of consumers worldwide. A McDon-ald's hamburger, a cola soft drink or an expensive brand name Italian shoe, tie or underwear fit this category. It is true that expansion of international markets, and especially national economies within the triad markets, reinforce this image. But globalization is much more complicated: a strategic necessity for multinational firms aspiring to be at the commanding heights of technology and consumer ac-ceptance. The issue at hand is capital and the soaring costs of technology and new product development. In the 1960s era of national economies and the pre-knowledge production era, unit production costs of capital goods and technology were high, but not pro-hibitive. The reasons were simple. The shelf life of equipment or technology was incredibly long, perhaps 15-20 years or more. Even General Motors, the world's largest manufacturing company, entered the 1980s with two-thirds of its North American automobile capacity more than 50 years old. But age does not tell the real story. The problem is not age, but aging. In tomor-row's economy, the shelf life of new plant and equipment and production technol-ogy is three or four years. Consider the office. In about a decade, today's modern secretary has gone from dictaphones and typewriters to portable tape recorders, computer terminals, mobile telephones, fax and microcomputers. The average secretary's tools - nothing fancy, nothing novel - have declined in real cost while increasing in service capability to unheard of productivity - the ideal of instant global communications. But the real cost to the producers of this equipment is another story. The key is not the producer but the consumer. Again, take real life examples. In the knowledge economy, where technologi-cal and engineering factors dominate product configurations and performance, it costs an automobile manufacturer a billion dollars to design a new engine or a transmission system. Even where parts and subsystems are common between one model to another, the real cost of developing a new automobile model is astronom-

Chapters in this book

  1. Frontmatter i
  2. Table of Contents v
  3. Preface to the Third Edition ix
  4. I The Japanese Industrial System
  5. Chapter 1. Japan and the New Global Economy 3
  6. Chapter 2. Samurai Management: A Framework for Analysis 25
  7. II Japan’s Societal Policies
  8. Chapter 3. Japan Inc.: Business-Government Relations 53
  9. Chapter 4. The Visible Hand: Industrial Planning 81
  10. Chapter 5. Technology and the Knowledge Economy 116
  11. Chapter 6. Asian Wall Street: Japanese Banking and Finance 153
  12. III The Corporate System
  13. Chapter 7. Samurai Education and Management Recruitment 183
  14. Chapter 8. Management Strategy and Organization 211
  15. Chapter 9. Human Resource Strategies and Work 242
  16. Chapter 10. Production and Operations Management 268
  17. IV Japan and the World Economy
  18. Chapter 11. Japanese Marketing: From Sogo Shosha to the Big Mac 303
  19. Chapter 12. The Acid Test: Japanese Management Abroad 332
  20. Chapter 13. The Globalization of Japan 361
  21. Chapter 14. Samurai Duel: Learning from Japan 385
  22. References 404
  23. Name Index 425
  24. Subject Index 431
Readers are also interested in:
https://doi.org/10.1515/9783110812879.211

Chapters in this book

  1. Frontmatter i
  2. Table of Contents v
  3. Preface to the Third Edition ix
  4. I The Japanese Industrial System
  5. Chapter 1. Japan and the New Global Economy 3
  6. Chapter 2. Samurai Management: A Framework for Analysis 25
  7. II Japan’s Societal Policies
  8. Chapter 3. Japan Inc.: Business-Government Relations 53
  9. Chapter 4. The Visible Hand: Industrial Planning 81
  10. Chapter 5. Technology and the Knowledge Economy 116
  11. Chapter 6. Asian Wall Street: Japanese Banking and Finance 153
  12. III The Corporate System
  13. Chapter 7. Samurai Education and Management Recruitment 183
  14. Chapter 8. Management Strategy and Organization 211
  15. Chapter 9. Human Resource Strategies and Work 242
  16. Chapter 10. Production and Operations Management 268
  17. IV Japan and the World Economy
  18. Chapter 11. Japanese Marketing: From Sogo Shosha to the Big Mac 303
  19. Chapter 12. The Acid Test: Japanese Management Abroad 332
  20. Chapter 13. The Globalization of Japan 361
  21. Chapter 14. Samurai Duel: Learning from Japan 385
  22. References 404
  23. Name Index 425
  24. Subject Index 431
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