success story of japan inc.
Success story of Japan Inc.
Japan has made a big impact in the world of management. After the World War II, Japan was a less developed country. Its per capita income that time was only one fifth of that of the United States. Over the next 20 years Japan has become the first postwar era country that has achieved the “developed” status. In 1968, Japan’s economy became the second largest only behind the US.
Japan’s economic success was mainly due to the innovative management technique applied to the industrial sector. Japan has contributed to the world of management, many precious gems.
Some of the systems are discussed below:
Just-in-time inventory management
This is a unique inventory management method. Here only that much raw materials are purchased which is backed by the demand in the market. This will save the unsold inventory carrying cost.
Target pricing method
It is a unique pricing technique. In other pricing technique, price of a finished good depends on its cost of production. But according to target pricing approach, first customer’s anticipation of price is ascertained. Which price a buyer is willing to pay is determined first. Given that price, production planning is done in a way that the cost is always fall below the price. This technique helps a company deliver the product at the right price.
Total quality management
Under TQM value is added to a product in every phase of production process viz. raw material procurement, conversion of raw material in to finished goods etc. conventionally quality assessment and addition is done only after the production but then the correction of defective goods incurs extra cost which is hard to recover.
But this Japanese invention saves that extra cost.
Employee relationship
Japanese organizations build long term relationship with their employees. They provide their employee with long term benefit like PF, gratuity etc. thus increasing the job security which in turn reduces the employee turnover.
There credit is given to a group for successful completion of a task, not the individual member of the group. This causes no personal rivalry or inferiority complex in the organization’s workforce.
Conclusion
From the above discussion it is clear that the success of Japan Inc. is a result of their originality, innovation, creativity. Rather than following America blindly, they have developed their own technique to success. Japan could be an example to India of the proverb” authenticity rocks, imitation sucks”.