Leadership and Management Success in Japan
Chapter 2: Mental Schemes of Successful Transformational CEOs: PIF and PA Approaches
1. INTRODUCTION In Chapter 1 we formulated a question, and in an attempt to answer it advanced several findings from our in-depth case studies. The question being that since the Japanese economy and its enterprises which seemed invincible in the 1970s and 1980s appeared to have faltered, why were some Japanese firms doing well, and what were their common factors? We wanted to know what outstanding business leaders were doing either in turning around their firms or maintaining their excellence. Chapter 1’s findings derived from the point that in a drastically changing business environment the firms needed to appoint CEOs whose mind-frame is not hidebound by accepted wisdom or routines and who could bring about a new business approach. We showed that the main factor underpinning these companies’ success over the past decade was the presence of an outstanding CEO with a clear mental model guiding their decision making. When these managers confronted a new situation, they recalled their mental model to resolve the problem successfully. In this chapter we present the two mental models identified in our study, namely Proto-Image of the Firm – PIF – and Profit-Arithmetic – PA – approaches. In the next section we settle the logical grounds and theory behind our arguments. Basically, our reasoning is based on the cognitive perspective of strategic management literature. Therefore, in the next section we briefly introduce that stream of research and its fundamentals. Then, we present the two managerial approaches identified and compare them with well-known frameworks in strategic management literature. Finally,...
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