Asia Logistics Wrap

ADB on Asia Growth Rates

Earlier this month, the Asia Development Bank released some revised forecasts for growth in Asia. In the first article, the ADB discusses growth for the PRC, the primary factors involved, and also the risks that still exist when looking ahead at China's economic momentum.

"The economy posted very rapid growth in the first half with fixed-asset investments, exports, and imports all rising significantly from a year earlier," said Mr. Ifzal Ali, ADB Chief Economist, at the launch of Asian Development Outlook 2006 Update.

"Even with an interest rate increase in mid-August that followed earlier monetary and administrative tightening measures, we expect second-half cooling to be modest. Our concern is that if the current investment boom continues, it could result in chronic overcapacity," he said.

In the second article, the ADB looks at all of developing Asia:

"Developing Asia’s rapid growth is underpinned by strong performances by the People’s Republic of China (PRC) and India, which together account for more than 50% of regional GDP," said Mr. Ifzal Ali, ADB Chief Economist, in launching Asian Development Outlook 2006 Update.

"The region should take advantage of this strength to act in three areas that could undermine growth if not addressed - the need to complete the adjustment to high oil prices, the need to pick up the pace of fiscal consolidation, and the need to stimulate investment," he said.

Of course, from this news we can infer that supply chain activity will also be expected to grow across links to and from the developing Asia region as well as within the individual countries that make up this region. Along with simply trying to match capacity with demand, there will be continuing efforts to simultaneously create more efficient and effective supply chain performance.

To ensure successful supply chain performance even further, there will be growing efforts to secure supply chains in those developing regions that are the least sophisticated. Leading logistics providers and supply chain management firms will be at the forefront of this effort and paints a very positive picture of business opportunities for the supply chain professional operating in Asia, or with significant experience in Asia but operating outside the region.

Assuming such growth rates will not last forever, or that a significant negative event like the Asia Financial Crisis or 2004 tsunami will eventually occur again, now is a great time for logistics and supply chain firms to build additional resiliency to better survive slower growth or crises, or a combination of both. Although activities dedicated to instilling resiliency obviously need continuous attention, much can be overlooked when times are good and thus addressed too late when "crap hits the fan." Especially small- and medium-sized businesses with fewer resources to dedicate towards long-term strategic activities need to be extra vigilant.

Korea Air Partners with Sinotrans

In a September 20 article from the Financial Times, author Andrew Yeh out of Beijing covers news of a new partnership between Korean Air and Sinotrans to form a new air cargo line:

Under the deal finalised in Beijing on Tuesday, Korean Air, the world’s largest commercial air cargo company, and a subsidiary of Sinotrans would invest $65m to launch a new cargo airline. The new venture will give Korean Air an important presence in the rapidly growing market following the collapse of its talks to take a large stake in Chinese start-up Okay Airways.

Despite a number of other deals occuring in the attractive Chinese market, Mr. Yeh notes that there are still risks in the still unsettled market environment:

It is not all plain sailing for overseas operators. A joint venture carrier set up by Singapore Airlines and local partner China Great Wall Industry halted flights in August after two months when Great Wall was hit with US sanctions for allegedly supplying missile parts to Iran.

For my previous posts on the air cargo market in China, take a look at this post titled "China Places Priority on Air Cargo."

Singapore and Resilience

After getting some distractions out of the way, it is time to hit the blogging trail again.

A while back, Steve DeAngelis at the Enterprise Resilience Management Blog posted on the resilience of Singapore. His first post, from August 25 titled "Singapore's Resilient Strategy" posited the following:

"No one can doubt that Singapore's economic miracle has become permanent. Its resilient strategy is positioning Singapore for an emerging future rather than trying to get the country to cling only to those sectors that made it successful in the past, like electronics and finance. It jump started its strategy by importing world-class scientists, building world-class facilities, and ensuring that its standards are as high as any around the globe. It's a great lesson in resiliency."

This conclusion was arrived at via a look at an article by Wayne Arnold in the New York Times. For more on Steve's train of thought, visit the full post as titled above.

In response to some feedback by Singaporeans and others, Steve did a second post on August 29 titled "Singapore Revisited" to further look at his initial post and highlight the feedback towards further enhancing the discussion:

My blog concerning Singapore's Resilient Strategy has received more comments than most posts. One pundit, Nimble Books Publisher W. Frederick Zimmerman, decided Singapore's is a fragile not a resilient strategy. He wrote:

Unfortunately for Singapore, it is a classic example of a single point of failure. I respect Steve D. & Enterra, but in the proliferated 21st Century, resilient assets must be distributed assets. Singapore, by definition, isn’t.

Zimmerman's point apparently refers to Singapore's small size and location -- a geostrategic fact of life learned last year by New Orleans. As noted below, however, geographical location has good points as well as bad. My entire point was that Singapore is trying to expand into more economic sectors (beyond electronics and finance) in order to avoid setting itself up for an economic "single point" failure.

See the rest of the post for the Singaporean perspective. Later, however, in a more recent post from September 13, Steve goes a bit further on the distributed assets concept and this is where I want to focus. Coincidentally, on September 13 I was attending the 2006 Asia Pacific Logistics Federation gathering where I heard a Mr. Roger Lee speak. Mr. Lee is the Director of the Singapore Institute of Materials Management in addition to being an active entrepreneur and book writer, but focused his presentation on "The Evolution and Application of Knowledge Management in Logistics."

Having at the point already read Mr. DeAngelis's first two posts, I began to realize that most people were focusing on Singapore's reslience in terms of its physical presence--Singapore the island, Singapore the people. However, as I have covered thoroughly in an explanation of my FAR Matrix (Flows-Architectures-Resiliency), we can frame the four flows Thomas Barnett covers in describing facets of globalization--economic, political, security, and people--in terms of the five architectures of high performance supply chains--physical, financial, informational, relational, and innovational.

Amongst the above five architectures, most of those responding to Steve focused on the physical architectures, which are admittedly hard to distribute outside of Singapore as an island unless it is buying large swaths of similar land in strategic locations within proximate reach. But looking at the other four architectures, these can be much more easily distributed and Steve touches on distributing informational architecture in the example of data back-up centers. But Singapore can just as easily distribute its financial architecture, as well as relational and innovational architecture.

These architectures can easily house the distributed "DNA" of the physical architecture models Singapore has put in place so that, in the case Singapore the island is significantly impacted by natural disaster, these architectures can refeed the post-disaster area with the distributed financial, informational, relational and innovational resources required to rebuild. In this case, we are not focused on Singapore's resilience as an island but as a replicative concept around the world--Singapore as a resilient concept or idea--that transcends the physical fixation on the island's fragility.

As in the FAR Matrix, an Enterprise Resilience Framework as Enterra intends to deploy is the glue that brings these architectures in sync, and which houses the triggers that would signal which distributed resources to redeploy to a post-disaster Singaporean island. At the same time, those utilizing the island with regularity as a supply chain node/hub would be assisted in knowing where, when and how to reroute supply chain flows via linkage to this ERM.

Whether Singapore will be able to eventually transcend the physical constraints of being an island state is to be seen with time. But after the presentation by Mr. Lee, I believe Singapore does have the minds and talent that could eventually push it in that direction as a coordinated strategy.

Settling in after Seoul

I have been quite busy since my trip to Seoul, so I am just getting settled in now. As for announcements, 3PLWire is back up and running full steam at their primary location. Please go visit for a variety of logistics commentary on the news of the day.

Off to Korea

I am headed to Seoul today for a weekend getaway in the Land of Morning Calm. I am busy today before heading out and so won't be posting until after I get back. I am already backlogged with topics I wanted to touch on, but it will have to wait until I get back.

Have a great weekend!

Quick Notes

My laptop has been out of commission since the end of the week before last, but will be back tomorrow. As a result, blogging has been light. However, I will be back in full force tomorrow until the weekend when I am off to South Korea for a couple days and then back Monday the 18th.

In the meantime, I received an email from 3PL Wire that their site has been taken down suddenly without their knowledge and they are trying to recover it. Until then, they are operating at a back-up site. Hopefully they are back up and running soon...

IHT Article on Japanese Business Practices

It hardly seems coincidence that following my series of posts on Japanese business practices, published at Asia Business Intelligence, there was an article published in the International Herald Tribune eerily similar in content and theme. Titled "Made in corporate Japan: New approach to business," the article is written by Patrick L. Smith and contains some nice quotes from a variety of people that complements my own writing. On the other hand, I believe the article leads to conclusions that rely too heavily on evidence from Japan's 1st tier companies.

Interestingly, Mr. Smith quotes Mr. Abegglen, the author of Kaisha, the book I mentioned in Part I of my article:

"A lost decade? Nonsense. A painful transition? Yes," said James Abegglen, chairman of the Asia Advisory Service and an expert on Japanese corporate organization. "Companies have done what had to be done to redesign themselves. They've retained basic values while changing what had to be changed."

Being one of the authors of Kaisha, I doubt Mr. Abegglen could be expected to use the "lost decade" label. But, not all Japanese companies have "retained basic values while changing what had to be changed." In reality, I believe the majority of Japanese companies are "trying to retain basic values while also attempting to change what has to be changed" and thus the foundation of corporate Japan and society--what I argue is found in its 2nd and 3rd tier businesses--is still enduring this painful transition.

Next, Mr. Smith goes on to discuss the "hybrid management system" that I illustrated via my personal experience on the ground:

With Japan now recovering, what is emerging here is a hybrid management strategy that is partly Japanese and partly Western, or a kind of "third way" in the corner office. Executives, management experts and consultants say this is producing a reinvigorated corporate sector that is more focused on primary businesses, better able to maximize human capital, more dedicated to advanced technologies such as robotics and second to none in cost-effectiveness.

The example used by Mr. Smith, Toyota, is of course the company from which Denso, the company I worked for and discuss in my article, was born:

The corporate ideal as this hybrid takes hold here is Toyota, Japan's leading auto maker. Company executives, notably the chairman, Hiroshi Okuda, have long been known for their cutting- edge management methods even as they espouse Japan's traditional corporate principles. Companies should not devote themselves solely to profit, Okuda said often during his just-ended tenure as head of Nihon Keidanren, the leading business association here - they are also social institutions with obligations to the communities in which they are embedded.

I think the oversimplification here of Western, particularly American, businesses being solely profit-driven without regard for communities is unhelpful. Toyota and Denso management ratios in the USA are heavily American, an environment which hasn't been a hinderance to the firms' success. This suggests that American management can be very flexible in balancing the profit motive with a more holistic focus on corporate health.

The below paragraph on Toyota helps explain Denso's parallel success as Toyota's #1 supplier throughout Japan's down period:

With aggressive overseas expansion and shrewd product development, Toyota weathered the years of sluggish growth at home as well as or better than any other Japanese company. In the last fiscal year, which ended on March 31, the company increased capital investment by 41 percent to ¥1.53 trillion, or $13.1 billion. In the three months to June 30, the first quarter of its current fiscal year, it reported a 39 percent rise in profit to ¥371.5 billion.

As I illustrated in my article, the actual execution of the expansion and product development mentioned above was key for Denso, as well as Toyota--establishing a human capital management system that could assimilate via leveraging the best aspects of American people and culture melded with Japanese business principles, particularly those in manufacturing.

The quote below stood out to me as referencing my point about the competition that comes with globalization and how Japan's 2nd and 3rd Tier companies are no longer as protected as before by market barriers erected by the Japanese government:

"We used to hear all about Japan as No.1 and the virtues of Japanese management," said Shin Kanada, Toyota's senior managing director. "Then in the 1990s the pendulum swung the other way. I'm a little jaded at this point. Of course culture and tradition are factors, but what determines management strategy is what has always determined it, and that's competition."

Thus, as I concluded, domestic Japanese companies have to adopt almost global strategies even while confining themselves to operating only within Japan. As a result, this phenomenon complicates statements such as the one made below:

Fujio Mitarai, the president and chief executive at Canon, who recently succeeded Okuda as the head of Keidanren, is noted for drawing a distinction between the global and local aspects of corporate management. The new-look Japanese company, according to Mitarai and other executives, accepts world standards in terms of balance sheet and cash flow management, transparency and cost controls while preserving Japanese practices in areas such as employment and close ties to suppliers.

While I have long agreed on the enhanced supplier relationships developed and cultivated by Japanese firms, my experience is in fundamental disagreement with preserving practices in employment. I am not talking about pure numbers and length of employment, or even severance practices--my focus is on how employees are recruited, trained, developed and retained.

The hybrid management model now emerging carries with it a fundamental truth, executives and consultants say. No company can incorporate import ideas without reference to the society in which it operates. The machinery company Fujitsu, for example, briefly adopted an across-the-board compensation system a few years ago based on performance instead of seniority. When the only tangible results turned out to be frustration and conflict among employees, Fujitsu soon dropped the new system.

I am also not arguing that Japanese-Western management practices are zero-sum--I believe also in the hybrid model.

"An Anglo-American method such as this it assumes employees can manage themselves independently and place the highest value on financial reward," said Shintaro Hori, the chairman in Japan of Bain, the global consultancy. "It doesn't succeed if people are trained differently and have different values. Pursuing financial interests alone is not a virtue here - it's a negative."

Again, I believe the "pursuing financial interests alone" meme is a misunderstanding of Western business practices today. But if you live and work in Japan today in the 2nd and 3rd Tier foundation of the Japanese economy, you will see that the way people are trained is not in tune with the Japanese society and culture of today. So while a complete introduction of Western management tools may be a mistake, retaining human resource management practices already exist in their complete form also does not address and adapt to the changes in Japanese society that I described in my article and that I see and hear about every day.

Many analysts say they expect Japan's emerging management model to have a significant impact on its presence in world markets. "Coming out of this are highly sophisticated companies that will keep Japan a manufacturing nation far longer than, say, the United States or Britain," said Abegglen, the chairman of the Asia Advisory Service.

I touched on this phenomenon in my post on Toyota in China utilizing American management methods.

In the end, the hybrid management systems that came from larger Japanese companies adapting overseas will lag in implementation at Japan's 2nd and 3rd tier businesses. Companies in industries that have strong international linkages--such as manufacturing and logistics--will face the most immediate threats in terms of competition even if they don't operate overseas. Managers in these firms must not only understand the positioning of their business in the domestic market, but also how it relates to the global market and the markets its customers compete within. Simultaneously, this contextual knowledge must be passed onto employees towards better training and cultivation in facing such a dynamic environment versus what Japanese firms experienced in the isolated Japanese markets of the past. Lastly, in my opinion and iterated in my article, this training and development must occur more quickly with more accurate placement of people in the right roles and positions.

Reflections on Transitions in Japanese Business Practices from the Bubble Era to Today (Part I)

(This is a reposting of my article that appeared in three parts at Asia Business Intelligence (ABI), courtesy of Rich Kuslan, on August 8, August 22 and August 28. At ABI, you can see Rich's attached comments).

Part A: Overestimating Japan in its Rise, Western Business Underestimated Japan in its Descent

During Japan’s bubble years throughout the mid- to late-1980’s, there were many books and articles written for the Western business community that advocated the “Japanese way,” and warning the Western business community to either adopt Japanese practices or lose out in head-on competition. A widely read book that exemplifies this period is titled “Kaisha: The Japanese Corporation,” and is reviewed at Amazon as follows:

“Much of the literature on the legendary success of the Japanese corporation has rested on the premise that the Japanese possess certain cultural traits, not easily transferable to the West, that provide them with inherent advantages in executing corporate strategy (see, for example, William Ouchi's Theory Z). Abegglen and Stalk, however, maintain that the successful strategies of the best Japanese “kaisha” (corporations) are more imitable than not. They discuss such learnable, competitive fundamentals as debt financing, high retained earnings, a short-run concern for building market share, and a partnership with labor. While the preoccupation with the Japanese managerial style can become tiresome, Kaisha offers a different interpretation and is recommended.”

I was assigned to read this book during my first visit to Japan as an exchange student at Waseda University in 1996, already about five years into the post-bubble era. By that time, the vulnerabilities of Japanese firms were regularly appearing in domestic newspapers in the form of high profile scandal, bankruptcy and financial mismanagement that extended to large contracts private firms held with the Japanese government. The aura of the Japanese firm’s prowess seemed to be crumbling and looked to give way to the West regaining its sense of superiority as the leader in global business practices. This background context while reading and dissecting Kaisha provided insight into both the origins of Japanese firms’ perceived unrivaled ascension and the sources of their increasingly publicized failures in managing business realities.

One more trip to Japan from January to March of 1998 to complete my senior thesis helped solidify the feeling that Japan was entrenched, at least domestically, in a downward trajectory in terms of its business climate. During those three months I stayed with a good Japanese friend from a wealthy family, and even their household had become quite conscious of their spending, pessimistic about the Japanese economy’s future. Interestingly, my friend’s father, who was president of a large film developing chain, directed most of his criticisms towards the knowledge and education of his sons, and by extension the younger population of Japan. His concerns then about the learning and progress of Japanese youth seem very prescient today, but as I will illustrate in my second post, any wholesale dismissal during this period by Western firms regarding the state of Japanese competitiveness would have been mistaken.

Reflections on Transitions in Japanese Business Practices from the Bubble Era to Today (Part II)

Part B: Overestimating Japan in its Rise, Western Business Underestimated Japan in its Descent

After graduating from college and entering the workforce in the summer of 1998, I discovered that Japan’s leading companies were learning to adapt in markets outside of Japan quicker than many might have realized, or wanted to believe, in the Western business community. What opened my eyes was a four-year stint working for Denso Corporation as a production engineering liaison. Denso is arguably the world’s current leader in the auto parts industry and Toyota’s lead supplier. I worked in Denso’s Battle Creek, Michigan plant, Denso Manufacturing, MI (DMMI), where approximately 2600 American employees are currently led by a mix of American and Japanese management. The facility was the first established in the USA by Denso in response to Toyota’s own venture into Kentucky, and began production in 1986. A book titled “Small Town, Big Corporation” about the story of DMMI’s establishment is an excellent case study to read, but unfortunately is out of print and difficult to find. However, the point I want to make is that even while the Japanese corporate system was being advocated during the 1980’s and oppositely criticized throughout the post-bubble period, Denso was already establishing a hybrid of American and Japanese best practices at Battle Creek that would become the foundation of its strong business success and resiliency across North America throughout the 90’s and into the 21st Century.

As a liaison, I witnessed on a daily basis the tension of such a hybrid management system, but at the same time observed the characteristics that made the company quite adaptive and competitively stronger than American suppliers, such as Visteon and Delphi. This can be seen in the firm’s resilience and upward trajectory throughout the automotive industry’s struggles post-IT bubble and the 9/11 terrorist attacks?a period during which its customer base was almost 50% non-Toyota auto makers. Steeped in the principles advanced by Toyota via the Toyota Production System, Denso’s management succeeded in bringing about a culture where the predominantly American workforce adopted Japanese best practices and vocabulary in terms of team-driven, quality management and continuous process improvement. For example, words like kaizen, genba and heijunka do not need translation (continuous improvement, work floor, and leveling, respectively). Americans work alongside Japanese peers for every production line start-up and regularly participate in global innovation and quality circle tournaments sponsored by Denso Corporation headquarters.

At the same time, the predominantly Japanese management developed the ability to lead with the performance-based incentives and directness desired by American employees. Every Japanese president has been known to make regular visits to production lines to converse with employees; management feedback forums are held once per month so that employees can directly bring concerns from the genba to DMMI executives; and a famous process improvement incentive program supports individual kaizen suggestions that save DMMI money, but also over time provide employees with increasingly bigger rewards?the largest prize being a completely new, personally selected automobile via a DMMI customer. DMMI was able to do this through a unique co-management system where American managers pair up with Japanese transplant managers up to the vice president level (the president is always Japanese). Despite regular, ongoing tension regarding information sharing between Japanese and American managers, DMMI has been able to capture the strengths of both cultures in a management system that provides regular reviews, transparency, and a dedication to employee development and empowerment that has made the firm truly a model place to work.

Stepping back to the see the bigger picture, however, these advances by Japanese firms operating abroad often face barriers toward being modified and adopted, even partially, for Japan’s domestic business environment. My next post will look at some of the key challenges domestic Japanese operations face and provide some thoughts to remember for future discussion.

Reflections on Transitions in Japanese Business Practices from the Bubble Era to Today (Part III)

Highly Adaptive Abroad, Japanese Firms Struggle to Integrate Global Best Practices at Home

Fast forwarding from my departure from Denso in 2002 to today, and I currently have spent just over one year employed with a Japanese logistics provider based in Tokyo. Operating in the middle market and family-owned since 1924, this firm’s work environment illustrates the fact that the majority of Japanese companies?primarily the 2nd and 3rd tiers?have been heavily insulated domestically from learning the lessons that firms like Denso have by venturing abroad in the late 1980’s. Especially in the Japanese trucking industry, which is fragmented amongst approximately 60,000 firms, the traditional approaches to strategy management and human resource management remain entrenched.

This traditional style of strategy management possesses a decision-by-committee orientation that encourages highly iterative versus transformative initiatives. By iterative initiatives I refer to activities that seek to improve upon past practices without a significant change in management structure, systems and philosophy. Transformative initiatives on the other hand typically require a paradigm shift where the perceptions of and approaches to a firm’s current business realities experience foundational change. In the iterative environment, improvements can “get by” through reliance on the homogeneity of the Japanese workforce to bond together towards a common goal. This approach doesn’t employ communication tools that explicitly link a pronounced strategy or policy to individual objectives?it is assumed “the group” collectively understands their role in relation to policy announcements.

Obviously, such an iterative approach requires a longer time horizon to effect change; in this context, human resource managers can feel at ease with the traditional seniority-based system that defers to length of employment or age level. Training in such an environment also follows an iterative approach?absent any external effort, employees learn at the pace of the firm. In the past, when Japanese firms could rely on a lengthy if not lifetime period of loyalty from their employees, this system made sense or at least was sufficient. But the Japanese employment picture of today has changed dramatically, and Japan’s 2nd and 3rd tier firms along with the Japanese tertiary educational system are struggling to keep up. Data released earlier this year on the program “Up Close” via NHK, Japan’s public broadcaster, showed that more than 30% of all new employees freshly graduated from college quit their job within three years.

From my experience working in my current firm and discussing this trend with our own new employees just out of college, as well as with friends working in other companies, it seems that the following conditions generally exist:

1. Lack of fundamentals upon university graduation: The majority of university students in Japan graduate with very few of the skills necessary to be successful employees via their own resources. The university system is such that it is still generally based on the old system of deferring to companies to train and educate the workforce to be productive and successful.
2. Poor utilization of new human capital on-the-job: Since a significant number of graduating students no longer enter companies with the expectation of seeking lifetime employment or with the loyalty traditionally expected of new recruits, a mismatch between training and employee placement occurs. The result is many university graduates learn on the job at a pace below their abilities?I estimate anywhere from only 30-50%?and quit the firm before the company is able to maximize the contribution of that employee?this in a period of 3-5 years. As an example, one ex-coworker of mine spent three years in the finance department but, after leaving the firm, realized in later interviews that his knowledge of financial management and financial tools significantly lagged his peers of the same age.
3. Death spiral of low expectations hindering corporate performance: With a significant number of new employees lacking the discipline and resourcefulness to self-educate and the majority of Japanese firms lacking the training systems to maximize employee contribution, there is an increasing trend of looking outside the firm for managerial talent. Often, these management hires are older workers forced into retirement in their 50’s and 60’s by larger firms restructuring or descending from the hiring firm’s own customers. In this case, the often lack of knowledge of the firm and its services/products upon employment ensures at least a short-term drop in corporate performance. At the same time, lower-level employees become more and more discouraged with a system that fails to provide dynamic personnel development and promotional opportunities that match pace with the challenges of today’s rapid globalization. A death spiral ensues where the firm continues to rely on older employees with a lack of practical and current business knowledge for management positions while these managers are considerably negligent in developing younger employees to eventually replace them.

The top-tier firms manage to hold their own in terms of training and have done a great deal to adapt to globalization and the use of global best practices. As the first and only Westerner to be hired in my firm, I am attempting to change the approaches and perceptions described above one step at a time. But these types of firms can hire the best talent in the world and they will be relatively marginalized or fail because they work in a system that does not identify, maximize and reward talent. Rather, a system that does cultivate talent in the appropriate manner can turn ordinary employees into stellar performance contributors.

Even being constrained by the type of system described above, I feel my Western education has cultivated in me the resourcefulness and discipline necessary to educate myself as needed to reach my professional goals. I honestly believe that one reason Westerners excel in innovation and leadership more quickly upon entering the workforce than many Asian employees is due to the Western tertiary education system. Although the students of Asian countries excel at the high school level in the testing of math and science knowledge, the majority of these students fall far behind at the tertiary level?in essence, the critical thinking and intensive focus on individual excellence that drives Western education is very absent in Japan’s universities. The difference can be clearly seen when comparing Japanese who have studied overseas at the university level versus the majority of their peers back home. So as a Japanese university student, if the first firm I work for upon graduation is not going to provide the foundation for success, it is up to that student to make-up the gap in moving along the learning curve. Unfortunately, from my experience so far, this perspective and skill set is difficult to transfer to my co-workers without being in a position as their direct superior.

Gradually, as more and more Japanese domestic firms realize that having a domestic-only business doesn’t exclude them from responding to the demands of globalization, those firms are demanding more from their management systems?especially such tools as metric-based performance measurement. This change will be painful and those Japanese firms that don’t initiate such a transformative effort will find themselves acquired by companies that will force it upon them, or gradually fall into bankruptcy, ceasing to exist. The strength of Japanese companies overseas, especially in the automotive industry, illustrates that it is possible for Japanese firms to succeed when the environment demands it. For Japan’s numerous domestic companies, it is of great importance to benchmark these success stories towards transforming their employee management system.