Akio Morita, Industrialist and Now an Author : Sony Chief Says U.S. Firms Need to Take Longer View
Clip this article and send it to your boss. Better yet, send it to his or her boss. Better still, send it to the bosses of bosses, the chairman and the board of directors.
Akio Morita thinks most of them are doing a lousy job, especially in the huge international consumer-electronics market for television sets, radios, stereos, videocassette recorders, compact-disc players and other high-tech equipment that his and other Japanese firms dominate.
Morita, chairman and one of the founders of Sony Corp., Japan’s $7-billion-a-year post-World War II success story, said in a Los Angeles interview last week that what’s wrong with American industry in the 1980s are its managers and stockholders.
Their short-term views of quarterly profits and annual dividends sap their companies of creativity and innovation, Morita believes.
American electronics companies, he said, have given up their leadership to the point that even products bearing the names of leading U.S. firms--RCA, Zenith and others--rarely are manufactured here. They are built in foreign plants and shipped back to the United States with the names of American companies.
“Today, most of our (Sony) TV sets are made of U.S-made components, including the picture tubes,” he said. “The only things we send over are the electron guns and some special integrated circuits. So you can say that any so-called ‘American-made’ TV set is about 80% foreign-made and that ours is more truly American than theirs.”
Myopia at the Top
But Morita does not limit his criticism to that one area of America’s former industrial might.
Throughout American industry, Morita believes, the people at the top of corporate pyramids are short-sighted and insecure. They demand quick financial returns and annual bonuses that drain corporations of the capital necessary for innovation and expansion. They cannibalize companies with hostile takeovers and “golden parachute” deals. They encourage employees to “work only for money” and not for the greater good of either the corporation or society. They treat employees like “tools,” whose primary function in life is to produce profit.
And they oversee an industrial economy that, Morita says, grows “weaker and weaker” by the year.
“I’m always criticizing American management rather than the American work force,” Morita, 65, said. “The American work force is very good. They can produce a good product. They have high morale, and they work hard.
“You (Americans) should give more incentive to management to run corporations with much longer viewpoints, instead of short-term profit. Give management more security to run companies. At the same time, you should discourage management from taking profit away.”
Promoting His Book
The white-haired, charming Sony chairman has been touring this country in recent weeks promoting his new book, “Made in Japan.”
It’s an account--written with a Japanese journalist and an American journalist--of four decades on the front line in what some see as a contest between Japan and the United States for worldwide industrial supremacy.
It’s a contest that, Morita believes, the Americans are losing, often without firing a shot.
“In Japan today there are more makers of civilian industrial products than in any country on earth, including the United States,” Morita notes in a chapter titled, simply, “Competition.”
The secret of Japan’s industrial might and its economic ascendancy, he continues, “lies on the shelves and the showroom floors of stores all around the world: good quality products that people want and in such variety that any consumer whim can be satisfied.
“This is how Japanese goods managed to take so much of the U.S. market. . . . We did not ‘invade’ the American market as it is sometimes charged; we just sent our very best products to America.”
Morita’s and Sony’s electronics vanguard was a 1946 wire audio recorder, a knock-off of a machine that the occupying Americans had brought with them to war-devastated Japan. Sony, then known as Tokyo Telecommunications Engineering Co., soon learned that the wire recorder was inferior to newer tape-recording machines.
Still to come were the transistor radio, the high-quality state-of-the-art Sony color-TV sets, the videocassette recorder and the ubiquitous Walkman. Sony’s latest entry is the compact audio disc player, the first successful use of laser technology in a consumer product and one now threatening to make vinyl records extinct.
The CD, with neither grooves nor stylus, is the “second innovation (in audio) since Edison made the first record,” declared Morita, and is right in line with the mission that Sony’s founders set out for their company 40 years ago: To “utilize the most advanced technology for the general public.”
That mission, which Morita insists is conveyed to every one of Sony’s 40,000 employees worldwide, manifests itself not only on the technological cutting edge. It also shows in Sony’s and other Japanese firms’ improvements to established technologies.
Morita is especially proud of Sony’s work in what he termed “mecha-tronics,” the combination of mechanical devices with electronics.
“The strength that a Japanese consumer-electronics company has is this combination,” Morita said. “That’s the only way we can produce video (cassette players) and . . . compact discs.”
Morita is quick to point out that his and other Japanese high-tech firms have prospered without the help of a huge defense industry, with its virtually unlimited budgets for research and development. The constitution imposed on the Japanese by the Americans after World War II puts limits on the Japanese military, and the country has virtually no defense industry.
In recent years, however, a debate has raged there about establishing a defense industry. It is a debate to which Morita has been a frequent contributor.
Morally, he said, he supports defense as long as it means “not attacking other people.”
“Defense power is the power to avoid war,” he said. “From that meaning--backing a defense industry--I don’t feel any moral problem.” From a business and engineering point of view, however, Morita makes an interesting distinction--one he believes that American high-tech firms have failed to appreciate.
“In the defense business, if you create a fantastic weapon, cost doesn’t mean anything,” he said. “So the target (product) is more important than the cost.
The laser-based compact disc, he noted, is only the most current example of a high-technology invention fostered, if not developed, with U.S. defense funds, that American firms have failed to bring to consumers.
The transistor was another, developed by Western Electric in the late 1940s and early ‘50s. The American firm--thinking that the best possible use for the device was in hearing aids--granted Sony a license for it. Sony, instead, developed the transistor radio.
“Defense has created fantastic technology,” Morita said. “But (in America) it’s not used as an industry to compete with Japanese industry. Why doesn’t American industry take advantage?”
yc “If you (Americans) decide to go into service industries, you must not complain of the trade imbalance,” Morita said. “You need hardware. You must import hardware. You must import the hardware from somewhere.”
And he’s betting that the machines of tomorrow, like so many of the machines of today, will be stamped, “Made in Japan.”
