‘Top-Down’ Bosses Emerge in Japan
Students of Japanese business management may soon have to revise their textbooks. According to two leading Japanese businessmen, consensus is no longer the prime mover in the making of corporate decisions, as it was in the old days of boom growth.
Kenichi Yamamoto, the new president of Mazda, the Hiroshima-based auto firm, says his company plans to add an American-style “top-down” decision-making style to the old Japanese-style “bottom-up” structure of management.
“In the days of high growth, when all you had to do to run a successful company was to lower production costs and improve quality, the bottom-up management structure was all right,” Yamamoto told foreign correspondents at a recent reception. “But in times like the present, with slower growth and when you don’t know what the future will bring, the bottom-up structure is not enough. You have to have a top-down structure to get decisions made.
“The rank and file know how to improve production techniques and cut costs. They know tactics well. But they don’t know anything about strategy. That has to be decided at the top.”
Japanese companies will have to take more risks to remain competitive, he said, and that means less waiting for decisions to rise from below through consensus.
Akira Totoki, chairman of the Japan Management Assn., agrees. Writing in the association’s monthly newsletter, he said:
“The recent emergence of strong personal leadership among executives in Japan shows that this style is becoming more necessary to get ahead. Unlike the period of high growth, Japanese industries must now develop one new business after another. . . . To meet the new challenges, executives must themselves change their patterns of behavior and adopt a more aggressive style. This may mean not always taking into consideration the consensus of staff members . . . although the value of consensus has not changed essentially.”
Firms Gearing Up for 256K Chips
Japan’s giant electronics companies, which already dominate production of the semiconductor chip that is on the verge of becoming the industry standard, are poised to produce “any amount” of the chip, the 256K dynamic random access memory (D-RAM) chip.
Also, they are already looking forward to the age of the million-bit semiconductor.
Shoichi Saba, president of Toshiba, the world’s fifth-largest chip maker, told foreign correspondents recently that the company plans to supply commercial samples of its newly developed million-bit D-RAM chip “by the end of this year or early next year” and begin commercial production of it in small quantities in 1986 or 1987, when production of the 256K D-RAM is expected to reach its peak.
Demand for large quantities of the megabit chip will probably not develop for another five years, Saba said.
(In the United States, American Telephone & Telegraph Co. has announced that its 1-megabit chip is expected to be ready for “manufacture in quantity” within a year and in full production in 1986.)
With random access memory chips, data can be retrieved at any time, regardless of the order in which it is stored. A dynamic RAM circuit requires constant “refreshing” by an electrical current that is automatically passed through. The “K” in the designation “256K” actually stands for 1,024 bits of data. In computer technology, it takes eight of those bits to form a character, such as a letter. Hence, a 256K chip actually stores 262,144 bits. Although the 256K chip can store four times as much data as a 64K-bit chip, the current industry standard, it occupies only about twice the space.
The Japanese shift from production of 64K D-RAMS started in earnest last summer. Now, all four top Japanese chip makers--NEC, which ranks third in the world, fourth-ranked Hitachi, fifth-ranked Toshiba and 10th-ranked Fujitsu--have achieved monthly production capacities of 1 million or more of the 256K D-RAMs.
Toshiba alone built six new semiconductor factories last year, Saba said.
The companies said they are watching market developments, particularly an expected shift from use of 64K to 256K chips by U.S. computer makers, and are prepared to step up 256K production “by virtually any amount” when the demand arises.
In 1984, Japanese companies produced 91% of the total world market of 40.5 million 256K chips, according to Dataquest, a San Jose marketing research company. Next year, the Japanese are expected to produce 234.6 million of the 256K chips, for 92% of the world market, the company said.
Japan’s Interest Rates Still Falling
Despite the widespread acknowledgment in Japan that the yen is undervalued in relation to the dollar--a major factor in Japan’s burgeoning trade surplus with the United States--interest rates here continue to fall, making investment in dollars ever more attractive.
Reacting to a 0.3 percentage point cut in interest paid on 10-year government bonds, now 6.3%, major banks on Jan. 28 lowered, for the fourth time in the past five months, both the long-term prime rate that they charge their best customers and the interest that they pay on deposits. This time, the prime was cut by 0.2 percentage point, to 7.4%, the lowest level since April, 1979. Just last September it was 7.9%.
Although private investment has been increasing at a rate of more than 10% a year, high savings rates continue to provide banks with more funds than they can lend.
The increased differential in rates between Japan and the United States, where investors can get 5 percentage points more in interest, was expected to put still more pressure on the yen. Since last March 7, the yen has fallen in value by 14% as Japan’s trade surplus with the United States expanded from $21.7 billion in 1983 to an estimated $34 billion last year.
Long-term capital is flowing out of Japan at a rate of more than $50 billion a year, most of it to the United States.
Helped in part by the magnet of higher interest rates overseas, Japan was reported to have finished 1984 with net claims against the rest of the world of around $70 billion, surpassing both the United States and Britain as a net lender to the world.
