Will those countries (BRIC) lose their edge in the years ahead, as Japan did ? Problem Unable to transform the cultures and processes that propelled their early export-led growth into those needed for global leadership.
Devotion to The Way Japan’s early success: Develop substantial asset basesDevelop substantial asset bases Achieve economics of scale and drive down costAchieve economics of scale and drive down cost Maintain the high qualityMaintain the high quality Powerful export value propositionPowerful export value proposition
Japan’s early success: Created strong corporate policies, practices, thinking and behaviors Created strong corporate policies, practices, thinking and behaviors Purpose, unity and rules governing relationships and expectations of behavior Purpose, unity and rules governing relationships and expectations of behavior Devotion to The Way
Devotion to The Way Japan’s decline: Replicating the way Replicating the way Narrow hiring criteria Narrow hiring criteria eg: mobile telephony Sony Ericsson
Devotion to The Way Is It Risk? Developing ways will hinder their international expansion Developing ways will hinder their international expansion eg: China (Guanxi) eg: China (Guanxi) Russia (Government) Russia (Government)
An isolated domestic market Japan: little competition little competition FDI FDI foreign firms foreign firms
Disadvantage: less competitiveDisadvantage: less competitive e.g. Nomura e.g. Nomura Is it a risk? BRICIs it a risk? BRIC An isolated domestic market
A docile labour force Japan: Japan: homogeneous labour homogeneous labour few subethnic groups few subethnic groups no local dialects no local dialects few immigrants few immigrants
Disadvantage: workplace norms diverse, combative labour diverse, combative labour e.g. sexual harassment, litigation e.g. sexual harassment, litigation Is it a risk? BRIC Is it a risk? BRIC A docile labour force
A Homogeneous Team at the Top Japanese companies ——cohesive and homogeneous leadership Matsushita Electric (now Panasonic)——all Japanese during the 1980s and 1990s In the 68 Japanese firms on the 2009 Global 500, nearly 98% of the listed corporate officers were Japanese. Only exceptions: Nissan and Sony
On the contrary… ● European and U.S. ——diversifying their leadership Example: Carrefour’s success
“…if your company’s international revenues approach 50% of the total, but fewer than 25% of your top leaders come from foreign markets, it’s time to get nervous about your firm’s ability to make the leap from plucky challenger to global leader…” Stewart Black, J. & Morrison, A.J. (2010)
Is it a risk? Many BRIC companies lack leadership diversity.