1 Japanese way of management: Cheers and Slander

JWM was analyzed in various points and manners. My focus here is right on the human resources .It is the issue, first discussed in researches. And, it includes the basic principles of JWM. It is said there are so-called three kinds of sacred treasures: lifetime employment, company unit trade union and seniority system. They contain informal negotiation (NEMAWASHI), decision process by formalized paper (RINGI) and final decision on consensus (YAKUINKAI).
In 1945, the Japanese economy was destroyed by American power. However, An idea of Traditional spirit and mind were remained. Japanese type of welfare society in sight, she struggled on for revival from heavy damage. Around 1959, she caught prewar economic level.
From 1960 on, a new departure had begun. Then comes years of high growth economy. The world people recognized Japanese product as good. Seeing overseas market, Japanese businessmen started their production in the market. Their success was praised and admired by trade circle of the world. In 1980's, a lot of scholars studied and questioned their secrets. However, just on the way, Japanese economy was overheated and crashed. Leaders had mistaken for economic strategy and political decision. So the administration system of economy became stiff. Central Bank did not work at well. Then comes 1990 collapse, said crash of BUBBLE (asset-inflated economy). The economy made nosedive. Seeing the situation, reputation on JWM fell to the ground. Japanese businessperson themselves had questions on their activity and lost confidence doing business.
The Western manager criticized JWM and publicized weak points of JWM as nonscientific. Now, on 2002, the situation is in same manner basically. It is said lost ten years on Japanese economy. On the time, American economy is the first and final winner. However, the rips, in various fields, have opened in American economy. So, there rises a sign on revaluation of JWM. Admire on JWM is comes from their strength and competitive power on trade field. The export power is based on factory management system, including group activity, spirit on high quality and bottom-up process.
Toyota system is popular as symbol of JWM. In Europe-American society, it was studied as lean system. Under the BUBBLE crash, these systems have brushed up. So, Japanese exporting industries, such as Sony, Honda, and so on, are sending good product to the world people.
Then, what divides cheers and slander on JWM? Will it be on the method to transfer or are their any principal issue? In a word, on cheers, quality of product itself has applause of consumer. And, on slander, production process has denying and booing of workers. JWM depend on various elements and factors. But, focus was on the result of engineering and were recognized the success story of JWM could learn easily getting rule out in Western style of MBA method.
Many, principal elements factors of JWM were absorbed by overseas business in success, especially in production field. However, JWM has been based on overall economic system such as finance system (GINKOU), corporation society (KAISHA), and personnel scheme(JINJI). So-called global standard is leading rule in the world. And JWM has lost the reputation. JWM are in trial and error stage. Three kinds of sacred treasures, also, lost their bright and disappeared. An officers meeting (YAKUINKAI) is transfiguring, too. New fire burns. However, the basics of Japanese way of management has remained. The change is not recognized by the world, yet. There were various analyses again on JWM. JWM depends on family mind (UCHI), professional spirit (IKI), and consensus process (WA). Now, Japanese way of mind and culture are showing change to the new world. But, the culture has their main concept, on the basic field. Brief figure of Japanese overseas direct investment shows these situations.

2 Japanese direct overseas investments

In 2000, Arabian Oil Co.Ltd (AOC) lost oil mining right in Saudi Arabia. Though, the right in Kuwait was continued, on the time, main activity of 40 years long finished in fact.
It was the first and major oil development project by Japanese businessman, not only in the Middle East but also in the world. Japan does not have oil resources. With small mineral resources, farm and marine products, she could not support the people grew after MEIJIREVOLUTION.
An oil development project symbolizes the situation and difficulty of Japanese economic administration.
On1960, when Japan enjoying high growth (Iwato KEIKI), at Saudi-Kuwait neutral zone, the first oil well of submarine oil field of the company did got oil .The project showed the success. Arabian Oil Co.Ltd became the base of Japanese energy security.
This year, the Organization of Petroleum Exporting Countries (OPEC) was associated. Member nations are mainly from the Middle East, such as Saudi Arabia and others. Their purpose of grouping is to have bargaining power to the Western oil power, first. Then, they develops it to the organization for oil market control. And, in this year, Japanese memorial" income doubling plan" (SYOTOKUBAIZOUKEIKAKU) was decided. It has an aim and hopes to catch up Europe, American life level and style. The High growth began. Japan, as a nation of limited natural resources focused effort on resources processing type industry development concentrating her human resources. It was plenty and qualified at that time. She changed a weak point into an advantage through engineering power and people's spirit for work.
The economic growth was called a miracle. And Japanese economy jumps with oil crunch again, using technology power. So she surpassed Western economy. Then, on experience of the success basis, business people of Japanese company have turned their eye to overseas production.
At the time, Asia was on the way to economic development and establishing the state. They had shook hands with The Japanese company and their investment in the country. And, on the time, Europe and America has lost their energy for growth. They, also, welcomed the Japanese capital. In accordance with these processes, Japanese financial organization started to have role at international financial market.
The Asia achieved high growth. They were named rising dragons. Supported by these Asian power, Japanese economy was boosted her engine for economic activity. Japanese lost sincere thinking and behavior. In such situation, JWM was praised. But, the economy is backed by the world market, especially that of America. And also, international finance market is in hands of Western capital. Before long, America gets hold of secrets of Japanese economy and restores the productivity and revives with European countries. Then comes IT age. Information type thinking and management method covers the entire world. They say collapse of analog thinking and new departure to digital economy. It did hit Japan business society and economy as a whole completely. Japanese brightness, with Asian force becomes extinct. And, then, Asian finance crisis, Japanese BUBBLE crash has the Eastern people in dark and miserable years. Power of Japanese finance as engine for economic development was utterly beaten up buy Western capital. Main engine of Japanese economy has collapsed. Once, it was called the lighthouse of Japanese economy, and admired by leaders of developing countries. But, no-power now.
At the same time, JWM lost the reputation, too. Basic engineering strength remains, but controlling tower has lost their confidence and administration skill. And they are on the way to denying JWM themselves. Now, we are in ten years of stagnation.
However, Japanese net overseas assets are 133*10(12) yen, currently (the end of 2000) (26% of GDP). Net assets of Europe representative five countries (Switzerland, Germany, France, Belgium (the end of 1999), an Italian total) are 60*10(12) yen. So, Japanese assets are the 2 times of Europe. The America is in pure debt. He has 251*10(12) yen DEBT (22% of GDP). Britain is in a debt state, too, having 18*10(12) yen DEBT (9% of GDP). Tokyo market closing price was, of the end of 2000, 114.90 yen / dollar.
After the war, Japan started trade with overseas with the rate set by GHQ, 360 yen/dollar. By Nixon shock; Plaza Agreement, Yen started to be strong to American money. After black Monday of America, 1987, it jumped to 133.30 yen/dollar. And, in April 1985, it showed a sudden rise to 79.75 yen temporarily. Leaders and professionals could not control this situation at all. So, Japanese business people could not plan for future. They had thought and planned to avoid instability of trade and devaluation for management in those situation .The key for them were foreign direct investment (FDI). The world astonished on Japanese rash power. Western capital took action against.
Japanese foreign assets are the number ones in the world. But, Japanese FDI is not extending to America far until now.
Japanese FDI is 30*10(10) dollars. And, America is 241*10(10) dollars. Seeing Europe, UK, 90*10(10) dollars; France, 100(10) dollars; Germany, 40*10(10) dollars.
Difference situation of these are understood by the outside direct investment balance ratio (OIB). OIB of Japan is only 17%, compared to America, 111%; Britain, 53%; France, 70%; Germany, 99% respectively.
Japanese finance system was key factor for overseas development of a Japanese company.
One of them, and leading financier was The Export Import Bank of Japan (EXIM Japan). 1999,it merged with Overseas Economic Cooperation Fund (OECF) and named Japan Bank for International Corporation(JBIC). The Bank business asset are, on international cooperation fund, balance of 2161*10(10)yen, at the end of 2000 .Of these, international finance business (FB) balance is 1031*10(10) yen, and, of FB balance, overseas investment related finance is 41*10(10) yen. EXIMJapan has supplied long-term funds. They, also, supported using their research and examination profession. And, The bank helped overseas development of private projects by effort to have continued exchange of opinion and discussion on policy for development with the government and policy institution of those countries promoting projects for their economic development.
When, The bank started its business, the Japanese FDI was at the start line, too. In 1956, overseas investment insurance (OII) of government was founded. The bank has supported FDI with this insurance system. The bank has financed to many and various projects. Oil development in Arabic sea, Ironworks in Brazil, Korean Petrochemical industry and so on.

3 Japan and China friendship

The friendship hospital (Beijing) is typical operation of Japan International Cooperation Agency (JICA), in China. It has great role in Chinese medical circle.
JBIC has supported various projects in China too. These activities is called economic corporation. And, One of the symbolic activities of the bank is an oil development project in Bo-hai Sea. It is collaboration with a Chinese state-run oil company.
The project started in 1980. Business leaders of Japan and China had discussed the plan just after the termination of Great Proletarian Cultural Revolution by Mao Ze-dong, the People's Republic of China turned their eye to economic development in international market. In 1972, Japan and China did normalize their diplomatic relations. Thereafter Japan has groped for cooperative relation with China. When oil crunch gave shock throughout the world, Japan and China realized value of Chinese resources deeply. So, both countries had in mind to develop and promote the under sea oil field.
In Japan, Japan China Oil Development Co.Ltd (JCOD;NITTYUU SEKIYU KAIHATSU) was established, in 1980,as promoting company solely for this project. In this project, Japan became the operator, at first, planning, in mind, to utilize the development technology and engineering of Japan with management skill. Project was run on the system of Chinese style joint venture (GASSAKU).And the final target is not only the supply of oil for China and Japan but also the brush-up of Chinese knowledge on engineering and management of project. So, the leaders of the project did set the plan for transfer of the operation in a few years. Then, in 2001, JCOD have finished the duty in GASSAKU, and was dissolved.
JCOD oil field was, at first stage of development work, expected and is hoped as a large oil field, next to AOC. But, because of geological difficulty and so on, it did turned to be a small one, after close inspection. This offshore oil field is in outer sea of TIANJING port, near to the mouth of great HUAN HE(Yellow river). In addition, as an oil operation project, the investment was done in dollar and revenue from oil field; sale of oil is paid in dollar. So that, strong yen by success of Japanese economy has hit the project management directly and heavily. AS a business unit, the 20 years operation may not be in success from the stand point of financial activity. But, as a GASSAKU, it would be said the object and/or purpose was done well.
China side partner is, now, operating project oil field with other own fields. China Offshore Oil Co.Ltd (China National Offshore Company, privatized in 2001) is one of popular stocks in Shanghai and Hong Kong stock market. And, oil fields of Boh-hai Sea are expecting further developing. Some oil major is planning for investment.
1980 was the year, IMF decided Chinese participation. This year was a start point of Japanese Yen Loan to China, too.
JCOD-CNOC project did entered in commercial production in 1985. This year, the world economy had Plaza Agreement. Japanese economy was in great hope and another important project with China, Shanghai HONSHANG ironworks started to produce world competitive iron. In 1986, Asian Development Bank (ADB) identified China as participant. China had the basement to enter into international market and to the global community. On the year, Japan sponsored Tokyo summit and it continued to announcement of "Maekawa(ex vice governor of EXIMJapan) report." Western economy did push Japanese initiative for international trade.
JCOD-CNOOC decided to increase their production in 1990, and had started commercial production of a new oil field (BZ34-2/4E). In this year, Gulf War broke out. Oil crunch was discussed again, but the situation was different after the first and second oil crisis.
In 1992, JCOD established New Japan China Oil Development Co.Ltd (NJCOD), for developing of reserved area, hoping new oil field. But it ended with little oil and no commercial production. {This year, first china visits by the Emperor and empress}.
In 1994, GASSAKU decided to do artificial oil production, final effort to have oil ,and returned other reserved area to China. Project was in the last stage of the contract. JCOD managing staff had a plan and intension to run the company until the end of the contract time limit with China. However, main stockholder (JOC with MITI, MOF and IBJ) had another opinion and ordered stop of operation. So, in 1998, JCOD decided to end GASSAKU (in 2001, it was dissolved; Oil market was sluggish at 10 dollars level). When Japan was stagnant without leading intellect, 2001, China was welcomed in WTO. China may be economic power in near future as well as military one, second to America.
At1999, GDP of China is a forth of Japan and 1/9 of America. The number was the same at 1980. GDP per capita is only 780 dollar compared to around 30,000 dollar of Japan and America. But, growth rate is high over 6 % (1999) when Japan is slow at little bit over 0 % and America is in 3 % sustainable level. With 1.25 billion people (Japan 0.13.America 0.27), energy supply for China is and should be the international issue. At nowadays, China is consuming energy, as a whole ,a forth of Japan and 1/8 of America, when urbanized rate is only 32 % (Japan 79 %,America 77 %). Land area of China is almost same as America, * 25 of Japan .

4 on global culture society

On September 11 2001, World Trade Center of New York had collapsed in a short time before the people. A symbol of international finance and capital had disappeared and several thousand finance experts died. It was from humankind. The ruined area is now called " zero ground".
In Japan, Just before high growth age, several thousands people died by a large-sized typhoon in 1959 (ISEWAN TAIHOO). Ordinal people: man and woman, old and young lost their lives. It was from the sky. Again, in 1995, after asset-inflated economy collapse, several thousands citizens died by the Great Hanshin Earthquake. It was from under the earth.
New York case is world wide one and concerning to the international cooperation. It is from discrepancy of communication and respect between people of the world. Hanshin case is domestic one and concerning to the risk analysis and/or community action to the risk. It is from misunderstand on Nature and/or mislead by leaders and intellect.
Western style of rule by power has showed their weak points in relation to international society. Japanese style of rule by consensus has showed her weak points in relation to community governance. Global rule in charge of governing the world is in turning point. International economy must be "served" for the people. So, the rule should be governed by the people, and, be managed of the people. The richness of the world may be accounted on cooperation and/or friendship other than money and/or physical richness.
The 0911 case has brought an eye of the world people on global culture society. The 1995 case has remembered weakness of human society. So, The time has come to corporate hands in hands. In 1975, Leaders of developed nations had gathered in Paris. And had direct talking conference (Summit) and international adjustment of economic policy had discussed. In 1979,at Tokyo meeting, the main theme was oil issue and Arab problem. Now, oil market is running steady. Before 1997, in Summit, the nucleus issue and USSR problem was the underlined theme. Now, the cold war is over. Russia is called as member of Summit. The chance has come for "West meet East" once again.
However, in 2001, Genoa summit could not support Kyoto Protocol. But there remains hope for mutual understanding in the activity based on people and movement in corporation between people. NGO, NPO and so on.
An accounts deception of American company has happened and it becomes clear that American style of world ruling operation is not perfect, even though better one. Before ripsaw open wide and sound to underground, Step for ripcord must be prepared at the moment. New Partnership style over team play are reconsidered again in business circle. Human factor in nature must be under Nature's eye. Society is on " person", and Business is on "people". So, management shall be on "group of person" expecting for "people". JWM may be one of the systems for the new world. Not in the past manner, but in the global color. Management function, then, be transduced from WA = f (uchi, iki) to WILL = f (universe, initiative). Combination of family mind and profession spirit will be transfigured to universe mind and initiative spirit, then comes global will, being underwrited by consensus procedure.

Address of gratitude

This report is from my career in EXIMJapan, JCOD and IDC (The International Development Center) backed by my colleague; Shigeki Tejima (Nisyosya Univ.), Toshihiko Kinoshita (Waseda Univ.), HiroshiTanaka (TakusyokuUniv.), Yukinori Itoh (Teikyo Univ.), Tohru Madono (Reitaku Univ.), AkiraYamamoto (ShumeiUniv.), MasashiIshii (KyouaiGakuen), MasaakiHoriguchi (Toshiba CO.Ltd) and had suggestion from my friends; Tetsuo Hamauzu (Hiroshima Univ.), Toshihisa Tsutiya (JETRO, SekiyuRenmeiofJapan), IsaoKawahara(PlantKyohkai),GorohKo-Ie(CityenvironmetRes.Inst.), YasuoTakachi(JBIC), HiromuTanaka(NichimenCO,Ltd), YasuoFurutachi(JAPIC), YoshihumiMatsuzak(BankofAmerica), TatsuhikoYamadera(NIPI),YoshiakiKomai(SOI), GorohtaKume(MarubeniCo,Ltd), TakashiAoki(lower), ShinMinowa(KeiohCo,Ltd), KunioHirahara(Enjineer Consultant), GohNiizuma(GoJ), FumiIshikawa(Journalist). For some data and materials, I owe to ladies; Ms Miyazaki and Ms Chiba (Librarians, Hitotsubashi Library , JBIC).

JWM chronology

1950 MITI, SohHyoh, Shaup, Dodge
1951 Toyota;idea promotion system, Pease Treaty
1952 Jyuujyou;pay-by-Job system, Mayday
1953 Mitsui Mining;strike, NihonOil;JyoumuKai
1954 OhmiKenshi,MitsubishiMining;Adm.Center
1955 GATT,55TAISEI,Zensen;strike
1956 Shiseidou;office mechanization, UN
1957 Toyota;claim center, J-USSR trade Treaty
1958 Toyota,Nissan;exp.to USA, EEC,
1959 Miike strike, Shinetsu;Jigyoubusei,
1960 Miike;lockout, New ANPO, Esakidiode
1961 Toyota;TQC,KOMBINATt,Man isle
1962 Lion;Qualificationsystem,LTtrade,Edavision
1963 Conference of Qccircle, Business school,
1964 NKK;SHAIN, IMF8, ShinKanSen,
1965 NEC;ZDUndoh, YS11, ADB, Veheiren
1966 KohEiHei,Narita, Txtile machine cut,
1967 Hitachi;Committee on management ,
1968 Mitsubishi;management Information center,
1969 Pearson Report, Mitsubishi; S&D Chrysler,
1970 YODO-GOH, Isuzu-GM,
1971 J-MacDonald, China-UN, HubaiUndoh,
1972 J-GoodBoycott,FDIguideline, J-Chi. Comm
1973 SohGohShohsha rule, Yen-float/264,
1974 GeneSto, Sony;UKTV, Anti-Jdemo/asia,
1975 Matsushita;Base-upstop,Sony;layoff,
1976 JRstrike, U-LSI Res.Ass., TENANMON
1977 Anti-Dumping Tax, Tax-cut move.,
1978 Iron Works; Layoff, J-CH peace Treaty.
1979 Anti-J-VAT, USA-Ch, USSR-Afgan,
1980 Open Market call on J.USA call J-Auto.
1981 USA top mission to J.,
1982 New TOYOTA, NEC to USA,
1983 Labor Union: down to 30%. TOYOTA-GM,
1984 ShinNittetu; worker cut, Honda-Canada,
1985 New NTT, SankohLine; bankrupt,
1986 NISSAN-UK, DNINK-USA/SC,
1987 NewJR, NewJAL, TOYOTA-VW,
1988 J-VAT,
1989 PL/SyuohwaDenkoh/USA, IJPCend,
1990 TOYOTA; recycle committee, MESENA,
1991 Principle Rule for Business/KEIDANREN
1992 TOYOTA; EPcommittee, NISSAN; AUST.stop, DAIHATU; USAstop,
1993 NTT30th.worker cut plan, many corp. stop new worker,
1994 SONY; Company system, J-PL law,
1995 Mitsubishi; Rockfellar Bldg., out,
1996 FORDgetMATSUDA, TOYOTA; international advisory board,
1997 NISSAN; close JYOUMUKAI,
SONY; cut DIRECTOR,
1998 YAMAICHIsecurity close,
L-Credit bank nationalize
1999 Zero rate policy, NISSAN by RENAULT

JCOD chronology

1980	JCOD general meeting for corporation Offshore oil development contract between CNOC	Iran-Iraq war OPEC 32$Arabian light Ko Yohoh
1981	Trial drilling No1-4 House for engineer; Bo-Hai hotel	OPEC production 10% cut Government finance to China
1982	trial drilling No5-7 Explore investment600mi, dollars,expected	CNOOC in corporation New king of Saudi Arabia
1983	trial drilling No8-12 Platform for Teihoku oil field ,ordered	Drilling ship crash(ARCO)on HAINAN JOC contract on Shujyu oil development
1984	Trial drilling No13-14 Hakuryuu No9 for BZ28	Transfer of Hong Kong signed TEXACO/GETTYOIL contract
1985	Trial drilling No15 Work helicopter crash Teihoku oil on production /to ship for Japan	CNOOC Tokyo office IDEMITSU oil dev,co, contract on China SKK,contract on Shujyu
1986	Trial drilling No16-17 Investment plan on BZ28, reduction by oil price down	Oil price down OPEC 18$ Nuclear Power crash USSR
1987	Operation of Teihoku transfer to CNOOC Development of BZ34-2/4oil field,decided	140yen/$ to 125yen/$ ChohShiyoh
1988	trial drilling No18 FPSU for BZ28 launched	Teitoh oil field by China Iran-Iraq war stop
1989	Work helicopter crash FPSU for BZ34 launched BZ28on production	Tanker crash on Alaska Exxon IDEMITSU out HEISEI, TENANMON, Jiang Zemin
1990	trial drilling No19 Operation of BZ28 transferred to CNOOC	JHN start work Reunion of Germany
1991	Development plan on BZ34-4w,decided Operation of BZ34-2/4E transferred Taxi crash	CIS Oil well 700# crashed by Iraq
1992	Water push method on BZ34	UN RIOdeJANEIRO Conference
1993	contract renegotiation with CNOOC	Israel-PLO meeting
1994	BZ28 stops production	HOSOKAWA=HADA,Kim Il Sung
re: Teihoku oil 34 mill.bbl API 16.6 BZ34 oil 28 mill.bbl API 35.0		1998/11 6.97 120.55 11.69
		1996 av. 13.84 108/84 20.17

Directors	Harada (MITI)
	SAKURAI (JOC)
	WAKASUGI (MITI)
	KONAGA (MITI)