Business Matters

Going global


The message is hardly new: Prosperity, perhaps survival, in the 21st-century business environment requires enterprises to expand beyond national boundaries. What is surprising is that Japan should feel the need to preach a message whose practice it had pioneered and in which it had excelled.

Japanese companies were among the first and most successful multinationals of the last century, building Toyota, Sony, and Canon into global brands. But the business executives and academics I met in Japan last year shared the view that even small and medium Japanese enterprises must venture abroad to cope with the challenges of a strong currency, labor shortage and aggressive competition from China and Korea.

Last week, Nikkei Inc. and the Kyoto University Graduate School of Management (GSM) convened a symposium in Tokyo on Global Leadership in a New Asian Era to mark the first anniversary of the Nikkei Asian Review. Top executives of five Japanese corporations found the theme important enough to participate in a panel discussion.

The discussion provided perspectives from the banking, engineering and construction, media, public relations and education sectors. The panelists, all with extensive, hands-on experience in managing operations outside Japan, focused on an issue addressed at an earlier GSM forum in Kyoto: preparing Japanese executives to lead company operations overseas.

Consensus on a number of desired competencies quickly emerged. Language proficiency in English was an obvious top priority: One speaker noted the need for “internal globalization” so that employees in Japanese multinationals at home could improve their English skills. But the panel agreed that executives who could effectively communicate in the language of the national partners enjoyed a crucial advantage in promoting mutual understanding and trust.

Credibility to the partners, however, must rest on competence and demonstrated commitment to ethical standards. Openness to new experiences, acceptance of things unfamiliar and strange would reduce stress levels for expatriate leaders. A panelist noted that going global should not be seen as a burden but as an opportunity for growth.

Buoyant Asian economies favored Japan, noted one speaker, because it enjoyed higher regard in Asia than in the West. With exquisite Japanese politeness, an older executive reminded the panel that the historical burden of World War II still haunted many communities in Asia.

Perhaps, awareness of this legacy helps explain what one observer critiqued as the passive, laid-back style of Japanese executives abroad and the lack of the skills and the “toughness” for international negotiations. He cautioned against sending executives to the “Wild West without guns.”

Other panelists agreed that, while respecting the culture of their host countries, the Japanese abroad must also represent the ideals they stood for. A reputation for being “boring” was no recommendation; they have to be able to converse about more things than golf.

Coincidentally, the day after the symposium, Japan Times carried two items relevant to the discussion. The first reinforced the fears that Japan was not producing enough executives with the competencies to lead companies abroad. Fewer Japanese students now study overseas. The number peaked at 83,000 in 2004 and dropped to 60,000 in 2009.

A job-placement agency has started a service to introduce to domestic firms Japanese graduates of American universities. Having lived in a different culture gives even fresh graduates an edge that trumps a longer employment record. Already contacted by 30 clients, the firm expects to book 500 jobs in the next three years.

Japan Times also reported that Shinzo Abe had revived the Education Rebuilding Council that he established in 2006 in his first term as prime minister. The 15-person Council, expected to meet twice a month, includes scholars, business leaders, and Cabinet members concerned with education.

Like P-Noy, Prime Minister Abe was an early advocate of educational reform, which he regarded as essential to recreate a strong Japan.  Addressing the Council’s first meeting, Abe proclaimed education revival as a top priority, on the level of economic revival. As the Kyoto University-Nikkei symposium suggested, the strengthening of the educational system may be the condition for sustained economic recovery.

The first meeting addressed mainly basic education issues, such as bullying that, in Japan, has resulted in suicides. In its earlier term, the Council had engineered changes in the Basic Act on Education to address Abe’s concern that the schools should place greater emphasis on instilling a sense of patriotism among the students.

Territorial disputes currently heightening international tension have reinvigorated the sense of Japanese nationalism. The revived Education Rebuilding Council must now also take account of the concerns expressed by Japanese business leaders for greater global engagement.

To play a role as a global leader in a new Asian era, Japan’s educational agenda must balance and reconcile love of country with the need for international understanding and mutually beneficial global partnerships.

Edilberto C. de Jesus is professor emeritus at the Asian Institute of Management. E-mail: edejesu@yahoo.com.

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