Leadership and Management Success in Japan
Chapter 3: Proto-Image of the Firm Approach to Business
1. INTRODUCTION In the preceding chapter we discussed two different approaches to business observed among successful firms in Japan, namely, the Proto-Image of the firm (PIF) and Profit-Arithmetic approaches (PA). In this chapter we will focus on the proto-image approach by examining how it is created, how it influences launching new products and diversification decisions and even how it affects the succession process. We will explain how a PIF guides managerial decisions to cope with change in its environment. In this chapter we aim at illustrating how (1) Sony renewed itself by launching new products and entering new activities. We claim the PIF approach was an important driver of Sony’s strategy since it enabled the firm to concentrate on products and activities it could cope with; (2) Sony’s leaders directed the renewal process through a review of their theory of the business. That is, how new products and new activities gave a chance to Sony’s management and staff to re-examine assumptions on which their theory of the business was founded. Before we do that, we will explain how a PIF, as a cognitive structure, is created in the mind of a leader. In doing so, we will analyse Masao Ogura’s professional life to see the facts which helped him to build his proto-image of Yamato. Moreover, we will describe Sony’s founders’ vision of his firm and how this vision influenced Ohga’s PIF. We believe that a PIF-type CEO has a clear image of what their firm is and where they...
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