Global Business

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4. If yes, how are they relevant? If not, what should the Japanese do to stay relevant?

-> The Greek philosopher Heraclitus famously quoted that ‘change is the only constant in life’. It means change is inevitable, it can never be controlled. In the same way Japan should change their management practices with in-line with the modern world and changing dynamics. The management practices that were embedded deeply into Japanese culture helped it to become the centre of innovation and major exporters during 1980.But, those days are long gone and with the recent economic difficulties Japan needs to improve their famous ‘keiretsu’ style business by implementing more global players, being more open and collaborating with global brands.

Buying from different suppliers Instead of buying exclusively from companies with which it has long-term relationships, new ‘Keiretsu’ should source from the global market whose streamlined operations allow them to offer very low prices. This gives it flexible searching and keeps costs down [c].Buying whole-partsInstead of buying individual parts, companies can demand suppliers to provide them with integrated systems of components. This helps it develop high-quality products while reducing costs and development time.

Creating competitionGovernment grants in various forms are given to those companies who cannot compete in the market or who is on verge of bankruptcy. Due to this almost every company is supported by the government, these grants remove the ‘competitiveness’ and efficiency’, within the industry. By reducing these grants, a competitor filed can be created for domestic as well as international companies.

Compensation based on skill and talentJapan has a long standing tradition to compensate on based on ‘seniority’ instead of skills. Due to this many talented employees don’t get fair compensation. Japan might find itself losing their talented employees to other Multinational companies.

Ref -:

- http://www.economist.com/blogs/freeexchange/2014/11/japans-economy-0

- http://www.economist.com/node/14299720

- https://hbr.org/2013/09/the-new-improved-keiretsu