Journal Name: Asian Business & Management: March 2004, Volume 3, Number 1
No Recovery without Reform? An Evaluation of the Evidence in Support of the Structural Reform Argument in Japan (pp7-38)
Richard A Werner (Sophia University, Tokyo, Japan and Profit Research Center Ltd, Ark Hills Executive Tower, S103, Akasaka, Tokyo,)
Conventional wisdom among many economists, central bankers, financial journalists and politicians holds that Japan must implement 'badly needed structural reforms' (to quote from the Financial Times). 'No recovery without structural reform', proclaims Prime Minister Koizumi. Japan's case is also used to advance similar reforms in other countries and regions, such as Germany, where they have already become a main plank of the government's policies. Given this overwhelming consensus, it is tempting to assume that the structural reform theory has been thoroughly subjected to empirical tests and found to be clearly supported. However, such empirical examination has so far been lacking. This paper analyses the empirical record and tests the neo-classical theories on which the structural reform case rests. It comes to the surprising finding that there is no factual support for the structural reform argument. Supply-side factors were not responsible for Japan's recession. An alternative demand-side explanation, focusing on credit creation, is found supported by the evidence.
Keywords: actual growth; capacity utilization; credit creation; potential growth; productivity; structural reform
The Prevalence of 'Japanese' Management Policies and Practices in Manufacturing Workplaces in Britain (pp39-56)
John Sutherland (School of Economics and Human Resource Management, Leeds Metropolitan University, Cavendish Hall, Beckett Park campus, Leeds LS6 3QS, UK)
This paper makes use of data extracted from the management questionnaire in the 1998 Workplace and Employee Relations Survey to examine the prevalence of 'Japanese' management policies and practices in workplaces in the manufacturing sector in Britain and to analyse the extent to which the likelihood that these policies and practices are present may be explained by the ownership of the workplace. The investigation finds that wholly owned British manufacturing plants do adopt 'Japanese' management policies and practices, although not to the same extent as those workplaces that are partially or wholly overseas-owned. There is evidence that the likelihood of some of these policies and practices being present at the workplace increases with overseas ownership of the workplace.
Keywords: Japanese management policies; Japanese management practices; manufacturing workplaces in Britain; external ownership
China's SOE Reform and Technological Change: A Corporate Governance Perspective (pp57-84)
Andrew Tylecote and Jing Cai (Management School and Economics Department, 9 Mappin Street, Sheffield S1 4DT, UK)
Since the beginning of its economic reforms in 1979, China has been searching for an effective corporate governance system for its state-owned enterprises (SOEs). Although some progress has been made, a large proportion of SOEs remain inefficient and uncompetitive, and in general they have failed to exploit their advantages in scale, experience and resources. This paper argues that this is mainly due to poor corporate governance, in the broad sense of control relationships. The structure and culture of these relationships creates poor disciplinary and incentive mechanisms, and these not only cause poor management in a day-to-day sense, but distort technological development. Management has an incentive, in general, to avoid spending over the long term, and in particular to avoid investment with low visibility. We show how this tends to privilege the upgrading of technology in such a way that the enterprise remains dependent on external sources. We conclude with proposals to change the financial and corporate governance system to improve the situation.
Keywords: China's SOE reform; corporate governance; technological change
Top Executive Origins: Comparative Study between Japan and Thailand (pp85-104)
Natenapha Wailerdsak (Graduate School of Economics, University of Tokyo, 7-3-1 Hongo, Bunkyo-ku, Tokyo 113-0033, Japan) and Akira Suehiro (Institute of Social Science, University of Tokyo, 7-3-1 Hongo, Bunkyo-ku, Tokyo 113-0033, Japan.)
The origins of directors and executives have been the subject of much recent discussion in Asian countries, with concern being expressed about corporate governance and management effectiveness. As an investigation of the origins and determining factors for East Asian directors and executives, this article is based on a wide array of data taken from corporations listed on the stock exchanges in Japan and Thailand. The results of this investigation show that although there has been much argument over the appointment of outside directors to company boards, and the ongoing collapse of the lifetime employment system in Japan, the ratio of internally promoted directors and executives remains high, particularly in companies with widely held shares. Also, it has been widely assumed that most Thai directors and executives are family owners, that their associates have poor management skills, and that other managers are brought in from outside as needed. Our results, however, indicate a significant increase in well-educated professional managers. The data point to the creation of internal managerial labor markets in Thailand. Regardless of ownership pattern, the companies most likely to have a high level of internally promoted executives are large long-established ones or sometimes those in regulated industries.
Keywords: top executives; internal labor market; ownership pattern; managerial enterprises; Japan; Thailand
Effects of Board Structure on Firm Performance: A Comparison Between Japan and Australia (pp105-125)
Ingrid Bonna (aGraduate School of Management, Griffith University, PMB 50 Gold Coast Mail Centre, Queensland 9726, Australia), Toru Yoshikawa (School of Business, Singapore Management University, 469 Bukit Timah Road, Singapore 259756, Singapore) and Phillip H Phan (Lally School of Management and Technology, Rensselaer Polytechnic Institute, 1108th St., Troy, New York 12180-3590, NY, USA)
This article compares the effects of board size, proportion of female directors, proportion of outside directors and average age of directors on firm performance in Japanese and Australian firms. We found that board size and age of directors were negatively associated with the performance of Japanese firms. For Australian firms, outsider ratio and female director ratio were positively associated with performance.
Keywords: corporate governance; board structure; firm performance; Japan; Australia
(This journal is available online: http://www.palgrave-journals.com/abm)
Posted with permission from the publisher.