THE RISE OF JAPANESE-

ORIENTED MANAGEMENT
STYLE
• During 70’s Japanese surpassed the American and
European companies.
• Steel
• Watches
• Cameras
• Automobiles
• Electronics
 PRACTICES FOR THE SUCCESS
• High employee morale, dedication, loyalty
• Lower costs (includes labor)
• Government policies favor businesses
• Highly productive and capital intensive organization after WW II
• Exports prevailed
• Superior quality control (TQM)

These strategies were further honed by the theory of W. Edwards

Deming.
• 1981 – Richard Pascale and Anthony Athos ( The Art
of Management )
Something missing - The cost structure was actually
higher.
Reason for success – Superior management
techniques.
 7S THEORY
• Strategy
• Structure
• Systems
• Skills
• Staff
• Style
• Subordinate goals or shared values

- Richard Pascale and Anthony Athos

• Kenichi Ohmae –head of McKinsey and Co. Tokyo
office ( “The Mind of the Strategies” - 1975)
• the strategy should not be too analytical but should
be more of a creative art. ( Intuition + Flexibility )
• Tom Peter and Robert Waterman ( “In Search of
Excellence” – 1982)
• Studied 62 companies and rated them in six-
performance criteria for 20 years
• Must be above 50% in four out of the six criteria.
• 43 companies passed
 8 KEYS TO SUCCEED
• Customer focus – The company should know and understand the customers
• Action oriented – Implement strategies not just mere paperwork or plans
without action.
• Entrepreneurship – Exude the entrepreneurial spirit; innovate and create
• Simplicity – Simple not too complex
• Stick to what the company knows best – continue in the field where it excels.
• Value-oriented management – Advocates corporate values throughout the
organization.
• People oriented – Respect and Motivate its people.
• Centralized and decentralized – centralize its control but also allows
autonomy in each business unit.
• J. Rehfeld (1994)
• Discussed the importance of transformation of knowledge
from various cultures to a management style to compete
globally. The Japanese style kaizen had not been successful
in the United states unless it was modified to suit American
culture

• Kaizen – improvement
THE COMPETITIVE EDGE
 CORE COMPETENCY

It is a detail of what the company has or

can do better than its competitors.

- Strategic architecture concept

By: Gary Hamel and C.K. Prahalad
 MANAGEMENT BY WALKING AROUND
(MBWA)
Building strategic relationship base with key
people who can be a source of viable
strategies.

Conceptualized by: Dave Packard And Bill Hewlett

Popularized by Tom Peters and Nancy Austin 1985
•
 GENBA, GEBUTSU, AND GENJITSU
(3G’S)
• Similar to MBWA

• Originated in Honda

• Translated to : Actual Place, Actual Thing, and

Actual Situation.

• By Japanese managers
 FIVE FORCE ANALYSIS
• Threat of new entity
• Supplier power
• Threat of substitution
• Buyer power
• Competitive Rivalry

• Michael Porter – management Guru

 VALUE CHAIN CONCEPT
- Set of activities that a firm operating in a specific
industry performs in order to deliver a valuable product
or service.

• Innovation
• Reputation
• Organizational structure

Improved by John Kay, develop by Michael Porter

 POSITIONING THEORY

- Crafting a strategy that would make the

brand/product in the minds of the consumers.

-AL Ries and Jack Trout (Positioning: The Battle for Your
Mind 1979)
Strategy is a product of resources such as
human, technology, and suppliers and then
combined in unique ways.
- Jay Barney 1992

Michael Hammer and James Champy, On the other

hand, championed reengineering which involves the
organization of a firm’s asset around whole processes
rather than tasks.
•Seven Best Practices That a
Company Needs to Adapt
-By Richard Lester (1989)
Continuous improvements in cost, quality, service and products
innovation done on a simultaneous basis;
Breaking down organizational barriers between departments;
Eliminating layers of management to make it leaner and simpler;
Closer relationship with customers and suppliers;
Intelligent use of new technology;
Global focus; and
Improving human resource skills.
W. Edwards Deming, Joseph Juran, A.
Kearney, Philip Crosby, And Armand
Feighbaum develop quality improvement
techniques like Total Quality Management,
Continuous Improvement, Lean
Manufacturing, Six Sigma, and Return on
Quality.
Fishbone diagramming, Service encounter
Service charting, Total Strategic service vision
Customer Service (TCS) Service mapping
Service profit chain Service teams
Service gap analysis

• James Heskett (1988) • Len Berry

• Earl Sasser (1995) • Jane Kingman-Brundage
• William Davidow • Christopher Hart
• Len Schlesinger • Christopher Lovelock (1994)
• A. Paraugman (1988) (Theorist)
 LOYALTY EFFECT
Loyalty among customers

Employee loyalty
Supplier loyalty
Distributor loyalty
Shareholder loyalty

( Carl Sewell, Frederick Reicheld, C. Gronros, and Earl

Sasser)
 CUSTOMER LIFETIME VALUE

• Long-term relationship with customer

• Known “ Relationship marketing and customer

relationship management” as of now.
 MASS CUSTOMIZATION CONCEPT

Allows company to individualize product for

each customer without losing economies of
scale.
( James Gilmore and Joseph Pine “ The Experience Economy”)

Bernd Schmit expanded it further to a Customer Experience

Management.
 CORE VALUES

• Core values were seen in the employees

who will build a great company and
make it last.
(James Collins and Jerry Porras)
 FOUR KEY TRAITS
Four key traits of companies that have survived
for the last 50 years.

By Arie De Geus (1997)

• Sensitivity to the business environment – ability to be attuned
with the forces in the environment.

• Cohesion and identity – ability to build a company with shared

vision and purpose.

• Tolerance and decentralization – ability to build relationship

among the employees and strategic business units.

• Conservative financing – ability to handle financial matters well.

•Thank You, Next…