The Panic Spreads - article

Chris Beggy news at kippona.com
Mon Feb 11 08:47:21 PST 2002


Doug Henwood <dhenwood at panix.com> writes:


> Chris Beggy wrote:
>
>>"dlawbailey" <dlawbailey at netzero.net> writes:
>>
>>> Sorry, the article was "Fixing What Really Ails Japan" by
>>> Michael Porter
>>> and Hirotaka Takeuchi in the May/June '99 issue of Foreign Affairs.
>>
>>They also have a book, _Can Japan Compete?_:
>
> So what's their answer?

It's the canonical business school answer, "If you do what we say, you will succeed!"

I haven't read it, but here's a blurb from an HBS review:

"The task before the Japanese government, the authors conclude, is to stop trying to manage the competitive process and start providing a dynamic context for it. Their recommendations include reinvigorating antitrust policy, opening up trade, lifting restraints on foreign investments, creating greater corporate accountability, and improving the research capabilities of the country's universities. In addition, the Japanese government must promote the modernization of inefficient domestic sectors such as retailing and wholesaling, while encouraging economic development beyond the overcrowded confines of Tokyo and Osaka.

"Meanwhile, Japanese companies need to rethink their fundamental approach to competition. In short, they must begin using strategy to carve out true competitive advantages. "Some newer companies that are outside the interrelated networks of the keiretsu system are already doing this by competing with truly distinctive strategies," says Porter. "They illustrate the advantage that firms can create by combining a clear strategy and profit orientation-rather than a philosophy of dominant-market-share-at-any-cost-with traditional Japanese strengths such as setting long time horizons and treating employees as assets."

FWIW, this is a pretty stale prescription. I've heard this since at least 1986, when trade friction was the problem, then in 1993, when the high yen was the problem, and recently in 2000, when stagnation is the problem. I hope the book explains why it hasn't been tried.

As Porter mentions, some firms have changed their approach. He's a detail-oriented guy (/Competitive Strategy/), with a great perspective on firms in the context of industry groups, and how to distinguish them from governments and countries.

Chris



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