The Internationalization Of Japanese Business

European And Japanese Perspectives

Malcolm Trevor

• Publisher: Routledge
• Year: 2019
• Topic: Politics & International Relations
• eBook ISBN:
  9781000302615
• Subtopic: Asian Politics
• Index: Politics & International Relations

This book examines the progress of internationalisation of European and Japanese business in four different fields: the commodities and service trade, capital transfers, enterprise management, and information and culture.

What Is Internationalisation?

Malcolm Trevor
Policy Studies Institute

Overview

One of Japan's best known international managers, Mr Akio Morita of Sony, recently concluded that, 'The best way for Japan to meet its responsibilities as a leader in the Free World is to ensure better management of external relations through internationalisation of Japanese society. Clearly this is the way to promote the national interest'(1).

At an official level, the report on 'Japan in the year 2000'(2) by the Long-Term Outlook Committee of the Economic Planning Agency (EPA), 'Assumed that in a long-term perspective the trend towards internationalisation will further accelerate in force', and that, 'It will become necessary for us to look at all problems from an international point of view. Future progress in internationalisation will not simply expand in quantity but will be different in quality from the advance made thus far'.

The report asserted that the process of internationalisation to date had been 'rather easy to cope with', because it had been mainly in the economic field. But it warned that this state of affairs would not last and that, as internationalisation progressed, 'areas related to Japan's economic society' would be affected: 'Therefore, we must be prepared to see the emergence of a situation in which we will be forced to cope with various difficulties'.

The report then went on to examine the progress of internationalisation in four different fields:

1. The commodities and service trade.
2. Capital transfers.
3. Enterprise management.
4. Information and culture.

The internationalisation of Japanese financial companies is dealt with below by Dr Prindl, who is both a practitioner and an author in this field(3), and will not therefore be discussed at this juncture. From the point of view of the theme of the conference, the focus here is on the third field identified in the report: enterprise management.

The report was frank in stating that, 'The accommodation of Japanese enterprises to past internationalisation has systematically been divided into two parts - domestic and overseas - centreing on the system of controlling local overseas corporate firms by despatching management personnel abroad. However, in establishing genuine overseas business activities, it will be necessary for Japanese enterprises to combine the domestic and overseas sectors into one organic sector and work out an equal management strategy. On that occasion, it will be necessary for them to make good use of non-Japanese staff personnel for the multi-nationalisation of personnel'(4).

The paragraph sums up precisely the heart of the matter, expressed in the contrast with the progress of internationalisation 'mainly in the economic field': what is the relation between the internationalisation of business, in the sense of increasing involvement in overseas markets, and the internationalisation of management and personnel at the level of the Japanese enterprise in Europe or elsewhere? Does the former inevitably lead to the latter and what are the implications for 'Japan's economic society', in other words the structure and style of business, in Japan itself? The intention of the papers that follow is to describe the present situation in a way that will help suggest answers to these questions, bearing in mind that the process of internationalisation is something dynamic and changing.

It is significant that the EPA report sees what it terms 'The Need for the Positive Accommodation of Internationalisation' under three main headings:

1. The confused state of the world economy, which requires the cooperative efforts of Japan and other countries if there is to be an improvement.
2. The dependence of the Japanese economy on overseas sources of raw materials, energy and foodstuffs (and on overseas markets for Japanese exports, although this is not mentioned).
3. The increasing strength of the Japanese economy, which inevitably has a greater impact overseas: demanding in turn 'a more positive role than before' aimed at solving problems in a 'multipolarised worid'.

Some of the questions are taken up in Professor Kudo's paper below. Having set out the basic reasons for the need for continued progress with internationalisation, based on Japanese integration into the international economy and the desirability of regenerating it, the report pointed out the implications for people and institutions in Japan, including schools, universities etc. and how they would need to adapt themselves. That is not, of course, the main focus here, although education and attitude, how managers see their jobs and how they see and are seen by local colleagues are obviously major factors in the management of Japanese overseas operations; as the paper below on the mutual perceptions of British and Japanese managers shows.

More recently, Mr Yamashita, president of Matsushita Electric Industrial Co. has stated that, 'Japanese corporations can no longer just conduct business in Japan among themselves. Given their huge export volumes and their heavy dependence on foreign markets, companies that fail to follow international norms are bound to run into problems. Matsushita knows full well that local production in the United States is not going to be easy. Production of VTRs by a local work force and in compliance with local practices is going to mean high wage costs and low productivity. In terms of the numbers, our company would be better off producing VTRs in Japan or South Korea. But the issue at stake here is something bigger. Unless Japanese corporations like ours can succeed in the United States under the same conditions as American companies, we will never graduate from the level of Japanese businesses playing by special Japanese rules. Until we can pull this off, our companies will never truly be international'(5).

The issue is particularly significant because of the 'new period of growth over the next decade', which is officially foreseen for the Japanese economy(6). In other words, it is to be expected that Japanese direct investment in Europe will continue to expand, putting the management of local operations increasingly in the spotlight.

The Internationalisation Debate

It is common knowledge that in Japan itself the topic of internationalisation is frequently discussed. A recent issue, for instance, of an English language magazine published by one of Japan's leading manufacturing companies, with extensive overseas interests, focussed on what it termed the 'international person'(7). The contents included articles on 'Business Personnel on the International Scene', and an expatriate in Japan, as well as on discussion of the 'Trends towards Internationalisation in Japan'. The editors clearly felt that it would not be easy for overseas readers to understand what the topic meant in Japan and so they provided an extra explanation in their introduction:

The closely related subjects of 'internationalists' and 'internationalisation' are a constant topic of conversation in Japan, and to most Japanese those two terms have very specific meanings. To many of our overseas readers, however, the very effort to discuss 'the international person' may seem somewhat odd ... In the past, a tendency existed in Japan to discuss internationalists in a wholly Japanese context - i.e. by, for, and of the Japanese people. Today, however, it is time to reconsider the past and to stand together with the peoples of the world and consider 'international people' from a global perspective.

In the very next issue(8) the same magazine again devoted almost its entire space to the issues of internationalisation and again the editors began by saying what they thought the requirements were:

The greening of Japanese companies in the international arena has advanced to the stage of all-out production operations overseas. And the companies that are producing overseas find themselves naturally drawn into much closer relationships with the host countries in which they operate, economically, socially and otherwise. In the process of transferring technology and production systems, and even management methods (emphasis added), it will be necessary for Japanese corporations to become more international and to break away from rigid Japanese ways of the past.

The magazine went on to discuss 'The Fusion of International Business', the internationalisation of the Yen, how overseas companies can succeed in the Japanese market, and 'The Birth and Significance of NUMMI', the Toyota-GM joint venture in California using the old GM Fremont plant.

In both issues of this magazine the editors' introduction and the choice of titles and subjects gave an idea of how 'internationalisation' looks from Japan. The analysis, in the last quotation above, for instance, also raises some interesting questions. How far is the internationalisation of management alluded to taking place? How far is it possible - or, to some people, desirable - In a non-Japanese environment? Is there a danger, as voiced by Professor Yoshino and others(9), that if Japanese managers do adapt themselves to what they perceive to be local styles of management they will lose those advantages of organisation and quality etc., that have decisively contributed to their companies' competitive edge in Japan? These are crucial questions for success or failure in the management of overseas operations.

Opinions are naturally divided. A senior economist at the Nomura Resesarch Institute believes that, 'Most important for Japan is that we do away with the special mind...

Table of contents

• Cover
• Half Title
• Title
• Copyright
• Contents
• Introduction
• 1. What is Internationalisation?
• 2. Japanese Companies in the UK
• 3. The Investment Strategy of Korean Transnational Companies. Is Korea following the Japanese Strategy?
• 4. The Internationalisation of the Japanese Economy: the Example of the Federal Republic of Germany
• 5. Japanese Strategies for Serving Overseas Markets: the Case of Electronics
• 6. From Commercial Controversy to Industrial and Technical Cooperation: the New Role of Japanese Direct Investment in the EC
• 7. Nissan's International Strategy
• 8. The Comparative Values of British and Japanese Managers
• 9. The Communication Structure between Management and Shop Floor. A Comparison of a Japanese and a German Plant
• 10. The Internationalisation of Japanese Financial Institutions
• 11. How to Eliminate Risk in Recruitment. The Personnel Policies of Japanese Subsidiaries in Germany
• 12. Innovations in Collective Bargaining through the Multinationalisation of Japanese Automobile Companies: the cases of NUMMI (USA) and Nissan (UK)
• 13. Japanese Market Entry Strategy. The Case of Yamanouchi Pharmaceuticals in Western Europe
• 14. The Theoretical Problems of the Transferability of Management Style
• 15. The Recruitment, Selection and Job Satisfaction of Expatriate Managers in Japanese and German Multinational Corporations
• 16. Japanese Direct Foreign Investment in the Netherlands: an Overview
• 17. Conclusion