Japanese Economy Case Study

Question 1

a. The rapid rise of the Japanese economy has been intertwined with extreme nationalism, paternalism, and anti-individualism (Morishima, 1982). The Japanese economy’s classification according to Morishima (1982) as an economy with collective goals through the hard work of its labor force has led to its economic advancement over other economies. In general, variations in the degree to which commercially valuable breakthrough knowledge can be captured by persons, firms, industries, and nations provide differential technological opportunities to the respective economies and can translate into sustained competitive advantage in the presence of supporting factors (Zucker & Darby, 2001). This applies for Japan, where throughout the last

Several are the reasons why other nations were not able to implement the Japanese concept of success. First of all, according to Hagesawa & Noronha (2009), the Japanese do not focus on the maximization of their shareholders value but rather on serving their society in compliance with the Confucius rituals. The Western culture on the contrary tends to focus more on maximizing profits and individual benefits rather than collectivism. Secondly, Japanese investments have a greater affinity to trade, reflecting their long-standing interest in East Asia (Mody & Srinivasan, 1998). On the other hand western nations, specifically the U.S are more influenced by domestic market conditions and are moved contrary to changes in host country trade intensity (Mody & Srinivasan,

For example, the high levels of technical skills in manufacturing, the building of global significant brands, the complex organizational coordination at high levels of efficiency, and the Japanese ability to engage workers in product improvement and quality assurance have all raised the standards for other countries in terms of structuring their business systems (Hagesawa & Noronha, 2009). All of the mentioned traits that the Japanese business system holds cannot be adequately understood without “extending the focus of analysis beyond the individual firm to the vertical keiretsu (business group)” in reference to Westney (1996).

Having said that, one can understand that the complexity of the Japanese business system and its reliance on business groups rather than individual attributions. Also, the ‘good’ relationships between Japanese firms and their suppliers have helped the companies prosper notably more than other firms in different markets. Dyer & Ouchi (2002) ask why Japanese suppliers are more cooperative and willing to take risks than US suppliers. The authors notice that the answer for that can be associated to the Japanese-style business partnerships and their strong bond with each other (Dyer & Ouchi,