Transformational CEOs
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Transformational CEOs

Leadership and Management Success in Japan

Kimio Kase, Francisco J. Sáez-Martínez and Hernán Riquelme

Transformational CEOs questions why some Japanese firms succeeded in the 1990s despite an economy that failed – regardless of the burst of the ‘bubble’ economy, a number of Japanese companies have maintained or extended their international leadership in particular sectors. The authors argue that whilst some of the reasons for successes are plain common sense – operational effectiveness and superior CEO leadership – some are Japan-specific and point to a break with traditional leadership rationale.
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Chapter 1: Management Success in Japan

Kimio Kase, Francisco J. Sáez-Martínez and Hernán Riquelme


1. INTRODUCTION Japan, during the 1970s and 1980s looked to be invincible. A symbol of American capitalism, the Rockefeller Center, had been acquired by a Mitsubishi Group real estate company. The NUMMI1 project in California, Toyota’s and General Motors’ (GM) joint venture, helped GM learn their partner’s just-in-time production system. Japanese firms were reducing their costs substantially and building quality advantages through pioneering management practices such as Total Quality Management and Continuous Improvement. Bookshops were crowded with texts eulogizing Japanese management strategies (Abegglan and Stalker, 1985; Dunphy, 1987; Hatvany and Pucik, 1981; Marsland and Beer, 1983; Monden, 1985; Ouchi, 1981; Ouchi and Jaeger, 1978; Pascale and Athos, 1981; Trevor, Shendel, and Wilpert, 1986; Tsurumi, 1981). Of course, the Japanese economic bubble burst. Since then, Japan seems to have lost its edge. In fact, Japan watchers have called the 1990s the lost decade (Porter, Takeuchi and Sakakibara, 2000). Establishment names in the Japanese economy such as Nissan and the Long Term Credit Bank of Japan almost collapsed. The turnaround often had as a focus newly appointed foreign managers or even overseas trained Japanese managers. The contrast between the invincible Japan of the 1970s and 1980s and the past-the-best-period Japan of the 1990s is stark. Many macroeconomic factors certainly exist. While the source of the Japanese bubble economy was the credit expansion and excessive liquidity based on speculative land prices, it ended with the instability of Japan’s financial industry and bankruptcy for Sanyo Securities, Hokkaido Takushoku Bank and Yamaichi Securities, among others....

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