Jack Nakamura had the honor of being in charge of the cover feature for Thailand’s business magazine, Thai Biz, also privileged to be featured on the cover.
Here is the English summary of his article.
Japanese companies expanded into Southeast Asia in the 1990s, and since then, they have built large-scale operations, primarily in the automotive industry. Initially, the reasons for overseas expansion were the high yen, which forced companies to move their production bases abroad. The culture of Southeast Asia shares many similarities with that of Japan, allowing the two to form strong partnerships and drive economic growth together. Thailand, in particular, can be seen as a prime example of this successful partnership.
As of 2024, Japan has experienced an economic stagnation often referred to as the ‘Lost 30 Years,’ and its appeal as a place to work is not what it once was. Why is that? There are three main characteristics of Japanese corporate management: ‘principle-driven management,’ ‘a focus on standardization and quality,’ and ‘valuing long-term relationships with employees.’ While these traits should still be recognized as virtues of Japanese companies, the prolonged economic stagnation and structural changes in industries like the automotive sector, particularly with the rise of EVs, have turned these strengths into potential weaknesses.
In this project, our company conducted interviews with many Thai employees of Japanese companies. In the interview, they pointed out the flip side of the virtues: ‘ambiguous communication,’ ‘excessive rules,’ and ‘slow career progression.’ we believe these are weaknesses inherent in what were originally strengths that have now become more apparent. As Professor Christensen once noted, ‘Successful management can fail precisely because it is successful!
However, many Japanese companies are now striving to change. In the article, several companies in the semiconductor and automotive industries are highlighted for implementing excellent HR initiatives; Clear performance evaluations and compensation, employee education systems, generous welfare benefits, and internship programs—these initiatives are largely similar across companies. Yet, what successful companies share is a deep sense of care for their employees and a commitment to long-term relationships. I believe that this mindset is a strength of Japanese companies that should be preserved, even as times change.
Nonetheless, the area that most needs change in many Japanese companies is leadership. Many Japanese leaders remain trapped by the successes of the past and are afraid of bold change. Without a spirit of challenge, they will be unable to fully leverage the history and management assets they possess.
Okakura Tenshin, a leading Japanese thinker active 100 years ago, stated that the essence of the Japanese spirit is ‘harmony.’ He envisioned a future where the people of Asia would form bonds of unity, rather than engage in conflict. we, too, hope to realize this ideal in the world of business.