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Why Japanese companies do so many different things

davidoks.blog

41–50 of 439 posts

Re: Why Japanese companies do so many different things

#41
> In 2007, workers at a Toyota plant in Kentucky pulled the andon cord 2,000 times per week; workers at a Ford plant in Michigan pulled it just twice a week. You can’t get all the benefits of a single practice without installing the complete bundle.

This example seems to contradict the author's main point.

The Toyota factory in Kentucky got some of the benefits of the Japanese approach without importing every practice. They might have had a more Japanese organisation than Ford, but surely they didn't replace American practices in matters outside their control. They still had to deal with American approaches to labour practices, banking, local government, etc., all of which are called out in the article as necessary for the J-mode to flourish.

Re: Why Japanese companies do so many different things

#42
> So why are Japanese companies like this? Why do they do so many different things? And how do they manage to do so all those different things so well?

Author says: Japanese companies excel in lots of very different domains because it’s inherent in how they’re structured.

My response: No mention of culture? Sure maybe it is because of how they are structured somewhat, but it's also because of their culture. Japanese are masters of their craft. Look at the best pizza place in the world, the best burger maker in the world.. they are not in Italy or America, but in Tokyo.

Japanese take pride in their work and master their craft. A small pizza-shop owner in Tokyo doesn't make great pizza because of how it was structured. It's cultural. Japan takes Western concepts, and applies an obsessive cultural devotion to mastery (Shokunin).

Look at all the foreign-things Japan is now famous for: Japanese Whiskey, Denim, bread making, Japanese curry, etc.

Re: Why Japanese companies do so many different things

#43
post #15

> the J-firm, run by its employees and largely indifferent to the interests of shareholders, exists simply to continue existing I don't know if all companies should be run like Japanese companies, but there's something very heartwarming about this. Some companies exist for the purpose of employment, and that's okay . In fact it's admirable and makes me want to cheer.

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.

That is because of population aging. Despite the US importing effectively endless amounts of young people, per capita income growth for working age population since the 1990s has been identical between US and Japan. I am unable to say why exactly but it should be obvious.

It is important to note, however, that the starting point is very different. The idea of employees robbing those evil shareholders sounds good but has resulted in capital markets that effectively do not function. Tidying up that mess will not be simple and improving equity markets will go a long way.

Also, the structure of Japan is a function of US policy after WW2 to dismantle the zaibatsu. In every single other historical case that I am aware of the result of "employee-friendly" policies has resulted in the kind of permanent underclass that people fear, incorrectly, that AI will lead to (i.e. Germany). It is a known bad idea. Japan avoided this because all the wealthy people's assets were taken, this didn't happen in other countries (i.e. Germany) which led to significant financial instability/risk/inequality (Germany also has inequality within a completely stagnant economic system, which is different from inequality in a system where the composition of wealthy people is continually changing...Germany's billionaires are a combination of people who mysteriously got rich in the 1930s very quickly and people who have been rich since the 10th century).

Japan is interesting but it is a complete outlier. Even with their relatively good relative economic performance, they could be producing absolute-terms growth that is double or even quadruple where it is now. Comparing middling economies like Japan or Western Europe with countries growing the same rate and per-capita incomes that are double is a misunderstanding of potential. Average economic performance should be double the US consistently for multiple decades.

Re: Why Japanese companies do so many different things

#44
I might be gatekeeping, but I consider a mark of actual healthy capitalism, to be creative destruction, the biggest companies of 1 generation are destroyed by the next generation and the churn keeps going on. Nothing ever lasts except the system.

By this criteria, in the entire world, only US and UK seem to do capitalism properly. Whether the current age of tech companies survive till 2050s is to be seen, (we are already seeing signs of OpenAI, Anthropic joining them but it is to be said if the existing monopolies of say Microsoft will be disrupted).

In other countries, big companies have been the same for hundreds of years, from Japan to Germany to Korea to India. This is no longer capitalism as much as it is some soft form of Feudalism, where the same set of families hold power for generations at a time till some major fortune swings occur.

Re: Why Japanese companies do so many different things

#45
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'll preface this by saying there are lots of other factors at play, but here's an interesting one I can speak to personally:

Car culture. We're a very car-centric society, and the Japanese auto makers have been a part everyday life to 3 full generations of Americans now. Even most Baby Boomers are too young to remember a world without Honda or Toyota. Across all age groups, a lot more Americans grew up with a fondness for their family's Toyota than their family's Hyundai.

I grew up in middle America. Both my grandfathers were "GM Men" if you will. Partly by vocation, partly by culture. On both sides of my family, every car was either a Chevy or a Buick. When my folks bought a Honda in 2007, it was treated like a scandal. But yknow what? Now one of my cousins has a Hyundai, and nobody batted an eye. Things are changing, even for the "raise hell praise Dale" crowd.

Japan's car makers, and their other industrials have a 40-year head start on embedding themselves in the American zeitgeist. Sony, Panasonic, Canon, Yamaha, they've all been here a really long time. They're loved because they're familiar. That's a bias, and I think that bias colors the way we talk about east Asian businesses more broadly.

Re: Why Japanese companies do so many different things

#46
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…

>This essay on Japan's corporate diversification and physical tacit knowledge is an interesting read. However, as an East Asian, my assessment is that this system is heavily driven by Japan's unique, subtle classism. It's a highly collectivist society with strict age-based milestones and immense pressure to secure traditional employment. In Japan, your corporate affiliation often dictates your social standing.

Related: In most of the world, carmakers separate out a luxury brand from their other products: Honda with Acura, Toyota with Lexus, etc. In Japan, they don't. The explanation I usually get is that the culture primarily associates luxury with "being attached to the big-name corporation". So you don't really improve on that by introducing another smaller brand, even one you build up as luxury.

See also the patio11 comment:

>>My salary was $30k, but there is some tangible value in having a pocket full of business cards which practically read "Attention, person who has just been handed this card: give the bearer whatever he wants. We're good for it. If you don't, we will remember." That status is very much not the same as the one you get if you combine two part-time jobs into the same level of income.

https://news.ycombinator.com/item?id=8576008

Re: Why Japanese companies do so many different things

#48
post #34

Earlier quoted context omitted.

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…

> 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.

Well that's just like your opinion...man. I think you're both singularly wrong. Trying to attribute a single factor to a highly complex system is a fool's errand.

If your conclusion is correct "ruthless squeezing of subcontractors" are there other cultures whether there is true and the country has been successful in precision parts? Otherwise, it's pretty impossible to conclude the causality.

Re: Why Japanese companies do so many different things

#49
post #15

> the J-firm, run by its employees and largely indifferent to the interests of shareholders, exists simply to continue existing I don't know if all companies should be run like Japanese companies, but there's something very heartwarming about this. Some companies exist for the purpose of employment, and that's okay . In fact it's admirable and makes me want to cheer.

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.

There’s also a real cost to the system in the United States as well. As companies pivot people get left behind. And we’re potentially going to see with LLMs a large collapse in employment that corporations don’t even being to consider their responsibility. I’m not suggesting one is superior but they do both have their downsides.

Re: Why Japanese companies do so many different things

#50
post #12

> American firms, for example, tend to prioritize focus above all else: it would be bizarre for an American paper mill to also operate a concert hall and an airport catering business I don't think Kimberly-Clark ever opetated a concert hall, but they did run an airline (Midwest Express) and K-C Aviation was an airplane servicing firm. It's not that American companies don't operate in diverse businesses. Maybe they're…

A great example is the bowling lane people AMF, who have over the years made things like pinsetters, jet-skis, motorcycles, scuba gear, shovels, and nuclear reactors. All spun in and out of the company over its life
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