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Abstract
While the use of Porter's generic strategies have been well documented in America and Europe, no studies have assessed their use in Japan. This research investigates if Japanese companies are indeed following Porter's generic strategies or continuing to follow more traditional "Japanese" management strategies. Using a survey to operationalize Porter's generic strategies, Japanese managers were questioned about their firm's current strategic practices. A factor analysis revealed Japanese firms are following only two strategies that could be identified as those of Porter. A cost leadership strategy was the most frequently used strategy, and the differentiation strategy was used the least. There was no evidence of organizations using a focus strategy. Interestingly, two additional strategies emerged that did not fit Porter's research but are in line with traditional Japanese strategies including a supply chain focus and a training based strategy.
Introduction
Japan is experiencing a shrinking economy, failing stocks, rising unemployment, restructuring and job cuts. Without reforms, the economy is only predicted to grow 0.8% a year from 2006 to 2010 according to country advisors (Lorange & Turpin, 2004). Layoffs, such as 800 workers from Mitsubishi, have caused a change of attitude as many young people are abandoning hopes of landing lifetime jobs (Wiseman, 2001). Bankruptcies are soaring and leaving behind a record level of debt in the country ("Japan Corporate Failures Up," 2001). A study team at Japan's Economy, Trade and Industry Ministry even called for improving disclosure rules for initial public offerings of venture firms to emphasize future business plans, rather than past performance ("Report seeks to Improve," 2001).
In their groundbreaking and controversial article, "Fixing what Really Ails Japan," Porter and Takeuchi (1999) both of Harvard University, presented the cogent argument contending it was not government oversight of industry leading to the global success of Japanese companies, but rather operational effectiveness and strategy. They further blame the current long period of Japanese economic stagnation on the lack of discernable business strategies practiced by Japanese firms.
Based on these propositions of Porter and Takeuchi (1999), the study presented in this article explores the following important related questions:
* What types of discernable strategies are Japanese companies currently using?
* Do these strategies fit the Porter typology?
* What is the relative frequency of...