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Why Japanese companies do so many different things

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Re: Why Japanese companies do so many different things

#31

Post by etempleton »

joe_mamba wrote: post #27
etempleton wrote: post #25

My experience in American organizations is that products and services need to not just make money, but make a lot of money. There is zero appetite for things that make a little bit of money relative to the cash cows of the company. You could say this is in part focus, but it is also based on internal accounting. Small product lines are saddled with total company overhead costs even if they do not apply to said produc…

> My experience in American organizations is that products and services need to not just make money, but make a lot of money.There is zero appetite for things that make a little bit of money relative to the cash cows of the company. Is your experience in the same America where Meta is losing another 4-6 billion $ this year in AR/VR business unit, after losing 19 billion $ last year. Similar with Google's and Apple's…

There is zero appetite for things that make a little bit of money, but in big tech there is limitless appetite for things that lose money but might make a lot of money one day.

If it ends up AI only makes a little profit annually in the longer term the whole thing collapses on itself.

Re: Why Japanese companies do so many different things

#32

Post by joe_mamba »

etempleton wrote: post #31
joe_mamba wrote: post #27

Earlier quoted context omitted.

> My experience in American organizations is that products and services need to not just make money, but make a lot of money.There is zero appetite for things that make a little bit of money relative to the cash cows of the company. Is your experience in the same America where Meta is losing another 4-6 billion $ this year in AR/VR business unit, after losing 19 billion $ last year. Similar with Google's and Apple's…

There is zero appetite for things that make a little bit of money, but in big tech there is limitless appetite for things that lose money but might make a lot of money one day. If it ends up AI only makes a little profit annually in the longer term the whole thing collapses on itself.

>There is zero appetite for things that make a little bit of money

Because "making little money" is a commodity business activity, overrun with competition from Europe and Asia.

So why would you ever want to compete in the race to the bottom of "little money" when you have the highest labor cost in the world? It makes no business sense.

You go into "all or nothing" moonshots because Europe and Asia can't compete there. Especially when you have the world reserve currency as the infinite money glitch cheat code (while it lasts).

Re: Why Japanese companies do so many different things

#33

Post by ahartmetz »

monkaiju wrote: post #26
cm2012 wrote: post #15

Earlier quoted context omitted.

I do also think there's a charm to this model but there's a real cost also with Japan's economy stagnating compared to the United States in the last 30 years.

Perhaps, but in terms of the average Japanese persons day to day experience it doesn't seem so bad. They outrank us in almost all QoL measures

They work crazy long hours (the last of which every day don't do much at all for productivity), which is really bad for QoL. Though I hear that the situation is improving.

Re: Why Japanese companies do so many different things

#34

Post by jdw64 »

SubiculumCode wrote: post #21
jdw64 wrote: post #7

It’s always fascinating to see how Westerners idealize Japan on platforms like HN. It makes me wonder(i'm korean): how would a Westerner react if they saw me romanticizing the Mondragon cooperatives in Spain? They’d probably find it strange and out of touch with reality. This essay on Japan's corporate diversification and physical tacit knowledge is an interesting read. However, as an East Asian, my assessment is tha…

Did you read the entire article? There is a whole section on where western model excels. The article is not about romanticizing Japanese culture, but to tell a story about how and why Japanese and American firms tend to differ. I am sure that it paints in overly broad strokes at times, but I really did not get the impression of idolization, idealism, or even oriental mysticism.

I did read it, but my impression remains the same. While the article does contain critiques of the Japanese system, as an East Asian, I feel it completely misses the actual underlying dynamics.

I know the author isn't trying to paint Japan as a utopia. The reason I call it 'romanticized' is because the author claims Japan's success in precision parts is driven by 'horizontal' and 'collaborative' practices. That just isn't true.

In reality, this system is largely sustained by the ruthless squeezing of subcontractors (for the record, I am Korean, but I actually like Japan), which is a massive social issue there. It’s very difficult for me to understand how anyone could view this structural dynamic as collaborative or horizontal.

If the author had concluded that their success in these niches stems from being an extremely vertical society where defying your superiors is simply not an option, I would have fully agreed. That aligns exactly with what I have experienced firsthand.

Re: Why Japanese companies do so many different things

#35

Post by coliveira »

jdw64 wrote: post #7

It’s always fascinating to see how Westerners idealize Japan on platforms like HN. It makes me wonder(i'm korean): how would a Westerner react if they saw me romanticizing the Mondragon cooperatives in Spain? They’d probably find it strange and out of touch with reality. This essay on Japan's corporate diversification and physical tacit knowledge is an interesting read. However, as an East Asian, my assessment is tha…

Nothing of this is particular to Japan, it's only the way it manifests in Japan that is adapted to its rich culture. Zombie corporations, corporations with ties to the government, family owned companies, monopolies, cronyism, all of this has been a staple of Western capitalism for centuries.

Re: Why Japanese companies do so many different things

#36

Post by fer »

whall6 wrote: post #29

I almost feel like this topic deserves a further deep dive. This seems like a more profound difference of cultures: Japan, where failure is stigmatized and less of an option, optimizes for survival, and the United States, where failure is common, optimizes for growth(? wealth? fame?). The pattern might also hold at a broader level. The United States is a relatively young nation that has seen plenty of internal strife…

Right, the survival bit made me remember this: https://en.wikipedia.org/wiki/Ichimonjiya_Wasuke

Re: Why Japanese companies do so many different things

#37

Post by koliber »

MetaWhirledPeas wrote: post #30
jdw64 wrote: post #7

It’s always fascinating to see how Westerners idealize Japan on platforms like HN. It makes me wonder(i'm korean): how would a Westerner react if they saw me romanticizing the Mondragon cooperatives in Spain? They’d probably find it strange and out of touch with reality. This essay on Japan's corporate diversification and physical tacit knowledge is an interesting read. However, as an East Asian, my assessment is tha…

As someone who finds Japanese corporate culture interesting or even desirable in some ways, it definitely doesn't seem like the most efficient way to run a company. And I'm sure there are plenty of cultural aspects that would not be my cup of tea.

You’re right and that’s intentional. Japanese companies don’t optimize for efficiently but for longevity. Sometimes those things go hand in hand. Sometimes they don’t.

Re: Why Japanese companies do so many different things

#38

Post by Glyptodon »

jdw64 wrote: post #7

It’s always fascinating to see how Westerners idealize Japan on platforms like HN. It makes me wonder(i'm korean): how would a Westerner react if they saw me romanticizing the Mondragon cooperatives in Spain? They’d probably find it strange and out of touch with reality. This essay on Japan's corporate diversification and physical tacit knowledge is an interesting read. However, as an East Asian, my assessment is tha…

I think I've seen the odd HN post about Mondragon that does portray it positively. Though I'm not sure I've seen one in at least several years.

Re: Why Japanese companies do so many different things

#39

Post by NordSteve »

This paragraph on organizational model is super relevant to understanding how tech companies are responding to LLMs today.

> Aoki’s key insight was that the J-mode had a comparative advantage in environments of moderate volatility: situations where conditions changed frequently enough that rigid central plans would be outdated before they were executed, but not so radically that only top-down strategic intervention could cope. In an environment of stable, predictable demand, the H-firm did fine; in an environment of extreme disruption, where the whole product line had to be rethought, centralized authority was indispensable, and the H-firm also did fine. But in between—where the challenge was to make constant small adjustments in a changing but recognizable paradigm—the J-firm excelled.

See for example https://aakashgupta.medium.com/microsofts-ceo-just-became-a-... or https://www.bloomberg.com/news/newsletters/2025-06-12/zucker...

Re: Why Japanese companies do so many different things

#40

Post by jandrewrogers »

etempleton wrote: post #25

My experience in American organizations is that products and services need to not just make money, but make a lot of money. There is zero appetite for things that make a little bit of money relative to the cash cows of the company. You could say this is in part focus, but it is also based on internal accounting. Small product lines are saddled with total company overhead costs even if they do not apply to said produc…

> zero appetite for things that make a little bit of money

For obvious reasons, the expected rate of return needs to clear the hurdle of the risk-free interest rate. This puts a pretty high floor on activity that is "worth doing". This is a mechanism by which the phenomenon of ZIRP diversifies economic activity.

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