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[ 190 ] asia policy Choose and Focus: Japanese Business Strategies for the 21st Century Ulrike Schaede Ithaca: Cornell University Press, 2008 • 304 pp. author’s executive summary This book explains how 1998–2006 marked a strategic inflection point during which the old ways of Japanese business were undermined, leading to the emergence of new, focused, and lean competitors in Japan. main argument Political change and legal reform, combined with crisis and the arrival of global competition in Japan, have caused Japanese businesses to realize that their old competitive advantages from quality mass-production no longer guarantee success. Japan’s largest firms have refocused by shedding non‑core businesses and by repositioning for leadership in targeted technologies. This development is spearheaded in high-margin upstream and midstream components and materials. policy implications These changes have undermined what we knew about Japan from the 1980s, regarding banks, business groups, employment, and subcontracting: • Japanese companies will be able to recover more quickly from the current global economic shock because Japan’s new economy features M&As, hostile takeovers, ownership by institutional investors and foreigners, and global parts sourcing, and is driven toward innovation, price competition, and efficiency. The buyout of Lehman Brothers and Morgan Stanley by Japanese banks is a visible sign of an otherwise less obvious reversal. • U.S. firms have much greater access to Japanese markets because Japan’s new, nimble firms rely more heavily on the outsourcing of products and services. • New leadership in materials and components has made Japanese inputs critical for U.S. firms. Many of the suppliers of these inputs are not household names. • To understand the new competitive threat to U.S. firms from Japan, one must look beyond end products and reorient one’s thinking regarding global competition toward new industries. For example, Japan’s new leadership in materials extends to green technologies, ranging from efficient power generation to recycling filter membranes and chemicals. U.S. firms in these industries are facing new competition. [ 191 ] book reviews Japanese Business Strategies: Evolution or Revolution? Michael Smitka A review of Schaede’s Choose and Focus It is easy to envision a new Japan as I write this while listening to returns of the DPJ’s landslide in the August 2009 general election. Of course, as academics we are quick to point out that this is not a revolution but part of a longer evolution; see, for example, T.J. Pempel’s 1998 book Regime Change. The prime minister’s office is much stronger, “national” universities and the post office have been privatized, public works expenditures cut, and agricultural subsidies pared; shifting rural votes highlight those latter two changes. In any case, it will be some time before we know whether the new government will implement new policy—and it will be even longer before we know whether any possible policy shift made a difference. Evolution, not revolution. We see the same if we look at the rhythm of daily life. Compared to the Japan I first saw in the 1970s, images of which still resonate in the textbook depiction of Japanese society, consumers really do live in a very different country. Their world is suburban and car-oriented, with shopping in discount stores that bring increased variety and lower prices for a wide array of food, clothing, and other everyday goods. Yamada Denki, a suburban chain, is by far the largest consumer electronics retailer in Japan, not the smaller Bic Camera or Yodobashi Camera chains based in metro stations. Service-sector jobs are dominant; part-time work is common, “permanent” employment less so. Young people eat differently, too—for example, bread and then noodles rather than rice. This readable book by Ulrike Schaede focuses on behavior in the business world and the financial institutions and providers of business services that support them. Her book, too, makes a strong case that we are already seeing a new Japan. Choose and Focus argues that Japanese management has passed through an “inflection point” that demarcates a shift that is both qualitative and quantitative in nature. Now we know that on the surface much has changed in terms of the legal and administrative framework, from bankruptcy law to corporate governance to a reorganization of...

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Additional Information

ISSN
1559-2960
Print ISSN
1559-0968
Pages
p. 190
Launched on MUSE
2011-03-30
Open Access
No
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