Educating Japanese business

Wednesday, 17 February 2010 08:56

The recent travails of Toyota make you wonder how well educated Japan businessmen really are. 

Let’s take a look at some of the evidence and arguments.

The Financial Times recently published its Global MBA Rankings 2010.  Not one Japanese MBA program is listed in the top 100.

So who won the MBA race?  London Business School came first, University of Pennsylvania second, Harvard Business School third, Stanford University GSB fourth, INSEAD fifth (France and Singapore), Columbia Business School sixth, IE Business School seventh (Spain), MIT Sloan School of Management eigth, University of Chicago: Booth ninth and Hong Kong UST Business School tenth.

Predictably, most of the top 100 MBA programs are to be found in the US (56 in the top 100) and the UK (15 in the top 100), those villains of the global financial crisis.  For these two countries, business education is a very important exporter earner, as they both receive many international students. 

But it is interesting to note the presence of some other countries.  Canada, which is an important part of the North American market, has 6 MBA programs in the top 100.  China, which has just become the world’s biggest exporter, has 3 (US and UK programs are also setting up many campuses in China and India).  Fellow BRICs, India and Brazil, have one a piece.  While Australia, France and Spain have 3 each.

One of the reasons why Japan does not feature well is that it has always had its own particular type of business education.  Large companies have always had major programs of internal training, where they molded young Japanese graduates into salary-men who were given lifetime employment for their company.  This system had many positive features.  Investing in staff, and holding onto this human capital, was sensible when Japan was in its post-war high growth phase.  Staff were rotated around the company, which improved their corporate knowledge, but made them less employable in other companies.  This system fostered intense loyalty.  This meant that a company’s intellectual property was guarded jealously inside the company.  This system also meant that when economic times were good, staff did unpaid overtime, while in bad times overtime was cut back.  Japan had labour market flexibility inside the company.

This system has been less well adapted to the recent decades of globalization.  Innovative firms now require deep specialization, but this is difficult for a corporate salary-man to achieve.  Today’s innovation is increasingly conducted through open systems, now closed circuits.  And as Silicon Valley has demonstrated, a cocktail of cultural and occupational diversity can generate great innovations, as can partnerships between universities and business.  The new competitive forces from China and Korea require great agility, as does the rise of social networking on the Internet.   

No Japanese enterprise has transformed from being a multinational company into being what IBM's Sam Palisano call as "globally integrated enterprise".  "Simply put, the emerging globally integrated enterprise is a company that fashions its strategy, its management, and its operations in pursuit of a new goal: the integration of production and value delivery worldwide.  State borders define less and less the boundaries of corporate thinking or practice."  This is fundamentally different from the hub and spokes systems of the typical Japanese company, which is still piloted from Tokyo or Nagoya or elsewhere in Japan.

One of the many lessons of the Toyota fiasco is that this will have to change.

Kenichi Ohmae, often known as "Mr Strategy", is one Japanese who gets it, with his Graduate School of Business which offers an MBA in Globalization and a Globalization Certificate.  But most Japanese would still prefer to sing Helen Reddy's old song "You and Me Against the World", instead of trying to be part of the world.

More fundamentally, from the day they are born, Japanese are taught to be followers, not leaders.  And in today's competitive business landscape, effective leadership is perhaps the most critical factor for success.


Financial Times Business Education, January 25, 2010 –

Kenichi Ohmae Graduate School of Business

The Globally Integrated Enterprise, Samuel J. Palmisano, Chair of the Board, President, and Chief Executive Officer of IBM.  Foreign Affairs, May/June 2006 --