Courage to Change Japanese-style Business in Crisis (1992)
"Price Rules of Competition in Compliance with the West"
In addition to the fact that Western businesses were reaching the limits of their patience with Japanese business practices, the universal problems of limited resources and energy, as well as environmental pollution have surfaced. Unless the world comes together now to tackle these problems in a serious manner, we could wreak irrevocable damage.
From this perspective too, it could be said that to continue competing in the world market under the management principles that Western businesses had already found objectionable, would have been even more difficult.
Founded on manufacturing, with engineers at the center developing products through hard work and research, the Japanese business model has undoubtedly, many points worthy of praise. However, now is also a good time to think seriously about our business philosophy and consider if there are any areas to which we have not given sufficient thought.
As a first step, the business community could consider the following points:
Looking at the world today, besides the resource problems just stated, there are numerous difficulties that we face. Big questions surround how the political, economic and social confusion in Eastern Europe and the former Soviet Union will converge, and the problem of how to shorten the every increasing wealth gap between north and south is as yet unresolved. Moreover, a great problem surrounds how to improve the increasingly severe economic environment among developed nations.
Japan has become a part of the movement towards a borderless global economy, and this global-sized issue will have a huge impact on Japan’s future. Accordingly, when considering under what structure these problems will be resolved, it becomes clear that Japan must become a third axis, next to America and Europe, and must take a leadership role-committing its people and resources to the task.
In such a globally critical time, with Japan forming one of the important axes, we must change the perception where Japan is looked on with a lack of trust from the West. As a first important step towards this, it is necessary to establish rules of compliance that will allow for fair competition.
Until now Japanese industry, in order to win over competitors, thought only of the pursuit of efficiency, and as expressed earlier, may not have sufficiently considered other factors. In the future we must set a price that considers these factors that were sacrificed in the name of efficiency, while adding an adequate profit margin and being conscious of the need to sustain profitability.
By achieving compliance with America and Europe through the establishment of rules of competition, the West will cast aside their distrust of Japan, and build a close alliance between the three nations to solve global problems. Accordingly, Japan needs to recognize that this issue is tied to the creation of a prosperous nation.
However, it seems that businesses get cold feet about carrying out even small changes. It is extremely difficult to truly change the consciousness of the Japanese businessman who feels that he must work continuously to stay competitive in a tough business climate.
(Continued in Volume 8)
( Extract from"Nijuisseki e" (Towards the 21st Century), published by WAC)