Japanese Business Systems

The two most major eras in Japanese history are separated by this question, which makes it extremely important. It demonstrates how much transformation the nation underwent, the challenging circumstances it encountered, the business obstacles it overcame, and the positive aspects of its culture and history that it made the most of in order to become one of the world's economic giants (Franks et al., 2014, Pp. 21-34). It is very evident that there is disagreement around the severity of Japan's failures and the economic consequences that brought about the financial upheaval.

The Japanese corporate system has seen a significant transformation in the previous several decades. The growth of the business system has enabled Japan to be among the world superpowers in various aspects of the economy (Gassmann et al., 2014, Pp. 32-45). Many arguments have been raised on a comparison of the two periods of Japan. Each evidence being rebuttable to some extent since both of the two terms had some merits and demerits. It is hard to ignore that the two periods in the Japanese business system had their qualities of growth and advantages depending on the necessity of that particular time.

Debates have been raised on the changes that have occurred between the two periods ranging from the labor market, corporate governance to inter-firm relations and many other technological factors that have happened in the course if time (Gassmann et al., 2014, Pp. 48-97). Over time, all these issues have been crowded out by the powerful and penetrating focus on inequality and fight for fairness and justice. E.g., Labor movements are now on the rise in Japan contributing to the escalation of living standards of the Japanese people. Some people argue that everything has changed positively. Change is all that people are talking about the day in day out (Franks, 2014, Pp. 65-78). However, on the other hand, there are those that argue that the socio-economic life of the people of Japan was better off in the lost decades compared to the high growth period in the sense that not all things have changed for a better course. That the Japanese economy would have grown at a faster rate and in a more disciplined manner if it were not for the involvement of Japan with the outside world in the oil industries.

During the high growth period, Japan received independence but still was reliant on the United States government for the benefit of the economic development of the country. Arguments have been stretched to show that Japan was doing itself a favor or instead acting smart by being under the umbrella of the United States. During this period, the government of Japan did not utilize its ability, energy, and power on the political or military sects but the socio-economic faction. They concentrated on their economy and how to boost it to be on the same level with other superpowers concerning business. They aimed to be able to compete in the world market and become one the world superpowers.

Therefore, the Japanese government prioritized the economic sect of the country and invested in the expansion of its trade to the outside world. After the establishment of the Liberal Democratic Party, things started to take a positive, turn in Japan for the better good. The Party established many economic benefits for the Japanese people. The Liberal Democratic Party boosted the labor market in Japan with a very high percentage in the sense that it introduced policies that favored farmers in the rural areas and the countryside. The Japanese government stopped the importation of rice and raised the agricultural prices. This helped the farmers grow economically. It is argued that this move by the state of Japan somehow created employment to a significant number of people hence helping them live a better life and an improved one. The Japanese government also targeted and invested in the pork-barrel schemes to the small villages in Japan. This was one of the best ways to spread the wings of an economy. It made sure that almost every individual benefited from the economy of the country. Therefore, because of the vertical growth of economy and creation of employment during this particular time, some scholars have argued that the Liberal Democratic Party campaigned and advocated for the economic recovery and growth of the country. This is to the contrary of what happened in the 1990s. The nation felt a considerable loss in during the last decade in the sense that the country’s economic growth reduced as it undergone a substantial decline in the form of deflation. Scholars argued that the nation pulled all tricks and all possible moves to get the country back on track, but nothing seemed to neutralize the loss which the country had suffered.

Economist argues that their tricks did not work in their quest of reviving the economy of the country not to mention their monetary policy because the bank's nominal rates were close to zero and therefore there was nothing else the government could have done to resolve the crisis.

Japan established strict policies to instill confidence in the public so that they could use banks to save their income. Some people argued that because of the high level of economic growth in the country people believed in the business system implemented by the nation and started saving their money and assets in banks. The benefit of the idea diffused to all the people in Japan in the sense that it became easier to operate in large business surpluses through the acquisition of loans from the banks. Local companies also started to invest in capital resources and compete for side by side with the foreign competitors. This, in turn, led to the decrease in price in the Japanese goods, which was a positive impact on the economy of the country and the living standard of the Japanese people.

The economy of the country was so kind, and money to invest was open in the air mainly concerning matters of stock exchange and real estate market. Millions flowed in from the real estate market of the country. The market generated more cash for the Japanese government through overvaluation of the real estate standards. Everything was high and excellent from housing rates to stocks. Some people still argue that the economy of the country was flourishing to the extent that the banks provided risky loans to a more significant number of people each day progressively. The economy of the country was on another level only to be compared to other world superpowers. Even though it was more about actual policies about the country’s economy, their vision was coming through at a faster rate without them realizing. Scholars are of the opinion that local investors were encouraged to invest out of their own country into foreign countries because of the high standards of investment in the country. In the course of time, Japanese products started losing value in the foreign countries, and some people argue that the consumption of the products became so low to the extent of initiating a deflation in the country. Famous economists say that that the cozy and self-serving relationship between banks and corporations in Japan was the root of all problems since the two institutions were too relaxed regarding handling their business activities professionally and adequately.

Furthermore, things started taking a reverse direction in the sense that deflation in the country negatively affected the economic growth of the nation. Some Scholars argue that this was the primary rationale for the downfall of the nation's economic growth and the beginning of the country’s recession. The business system changed from investing in other countries to trying to save and revive the failing businesses and banks in the country. The country went through a very harsh environment during the 1990s concerning the economic growth of the nation. Some argue that Japan tried it's very best to try and boost back the economy and recover from the losses that it had suffered, but all was in vain as it could not improve and attain the status it was in within a short or somewhat limited period. Some economists and professors argued that the big recession was caused by the breakdown of the land and stock prices, which caused the liabilities to have more worth than the assets in the country since the assets prices worsened immediately after the initiation of the deflation. This, in turn, triggered the insolvency of some of the companies and businesses in the country

Some scholars were of the view that since the collapse of the economy was gradually then to recover a saving of a very high standard after its downfall will also require time. That the downward of the economy would rise again not through a miracle or overnight but it will need patience and proper analysis for the government to be able to bring it back to the top. The Japanese government tried to reduce interest as a way of dealing with deflation crisis, but their strategy did not work within the short period. Some of the people were of the belief that if they would create fear of inflation among the people of Japan then maybe they could neutralize the deflation catastrophe but the idea was unsuccessful. Not all these ideas could bring back the country to the level of the bubble economy.

The corporate governance in the country during the high growth period was terrific. Corporations were controlled by an efficient and effective structure of management, which openly and categorically identified the responsibilities, duties, and rights of shareholders, creditors, and managers. Corporations related and dealt with each other in a peaceful and professional environment. The mechanisms by which the organizations worked within were of proper monitoring and friendly to the market. This is contrary to what happened during the period of great recession or rather the lost decade. After Japan started to invest in capital resources and outside of their borders business and the bank took a wrong turn. A significant number of corporations within the country were not good terms and could not relate well to the market economy. The shareholders and creditors of different companies started drifting apart hence facilitating the deflation in Japan.

Some people also argue that during the high era of economic growth in Japan more people were employed through the good inter-firm relationships that existed between and among various corporations in the country (Dyer &Ouchi, 1998, Pp. 47-87). This, in turn, necessitated a better living for the poor people in Japan, which in turn led to the high economic growth of the country. Inter-firms relationships sort of benefited everybody and somehow facilitated the rise of the bubble economy in Japan. Some professors were of the idea that if the corporations in the country maintained the excellent business relationships that they had during the high growth period and tried to retain the status quo of the system they used about the businesses they conducted, then maybe Japan would not have undergone the significant downturn.

The industrial and economic development was given an upper hand by the government of Japan. The financial gains were shared almost equally among the people of Japan unlike in the lost decades where nothing matters than self-interest and equality is just but a notion, which is ignored and stepped on (Dyer &Ouchi, 1998, Pp. 45-76). Everyone is their desires and do not consider how their fellow citizens get through their financial and economic problems. It is a man eat man society where everyone is on his or her own. Nonetheless, through sharing of the economic gains, scholars argue that the Japanese people were able to live an improved standard of life.

Some professors argued that during the high growth period the banks in the country lent vast sums of money to companies and businesses since cash was flowing in the banks after they had instilled confidence in the public about banks, i.e., many individuals saved their money in banks hence banks had a lot of money to risk it (Dyer &Ouchi, 1998, Pp. 56-99). The companies and big businesses went ahead and invested in real estate which was a successful business idea at first but when the values started dropping many real estate agents and business people were unable to pay back the loans hence leading to deflation of the country and at last to the lost decade. The banks tried to collect on all the assets it had invested in but could not reimburse the loan. They waited for time to move hoping for the prices of the assets to shoot upwards and save the day, but their wait bore no fruits (Lozano et al, 2017, Pp. 32-47). In the midst of the lost decade, some politicians in the country were of the opinion that the only way the country could survive the great recession decade was for the banks, industries and real estate agents to sell their assets to deal with the deflationary dynamism in the economy. Banks could no longer lend money to companies and big businesses which led to the collapse of most of the organizations and regional firms that led to the downfall of the economic growth. Some economists in the country argued that the skintight monetary policy in the country worsened the financial crisis in the country. They were of the opinion that a more applicable monetary system would help the nation to at least recover what it had lost during the lost decade (Lozano et al, 2017, Pp. 67-87).

The economists in the country were of the suggestion that slight enhancements on the corporate governance laws, tax laws, and bankruptcy laws would help jump-start the economy of the country after the breakdown of the economy (Namiki et al., 1984, Pp. 21-56). This was in the hope that improvements on the tax and bankruptcy laws would enable small businesses to survive in the harsh business atmosphere in the country and probably aid in the remaking and re-establishing of the country’s lost economy. Some people suggested the nation to join many partnerships in the effort of eliminating the recession, but the economic loss the nation had endured overtime was so vast that it was almost to impossible to recover (Namiki et al., 1984, Pp. 76-89).

It has also been argued among scholars that the country ‘don’t care attitude’ about spending money on infrastructure and loaning rich businesses people led to the downfall of the economy of the country. Some argue that spending a lot of money on incentives ton employees and borrowers of money necessitated the deflation in the country in the sense that the rich did not mind the loss of value of real estates as long as they were financially stable whatever the outcome (Sato & Parry et al., 2015, Pp. 21-45). Some were of the opinion that that devaluation of the real estate's was not caused by the ignorance of the rich business people but by the business system, which was used at the time. The business system was effective regarding the fast economic growth of the country but not visionary and long-lasting, which focused on the future of the country’s economy.

During this era of high growth of Japan, many Japanese people were employed in the international trade ministries and were in opposition to work in industries as civil servants. In the course of such employment, a more significant percentage of the Japanese people were able to benefit from working in the international ministries, as they were able to learn a few skills and techniques in relation to the industrial category and on how to engage the market and manage a business (Sato & Parry et al., 2015, Pp. 121-145). This era of high economic growth was marked by the involvement of Japan in the international trade sponsored by the United States government. This model of business has completely and utterly changed in the sense that in the lost decades, the Americans no longer sponsored Japan in any of their regional or international trade. Things have changed, and Japan can stand on its own in as much as the high growth period is no longer experienced. Some scholars argue that maintaining the status quo was a good thing (experiencing the high economic growth under the umbrella of the Americans), but some are of the opinion that Japan became a better state after it withdrew itself from the American armpit.

Indeed the business system in Japan completely changed from the era of high growth to the lost decades. During the high growth period, it was more about introducing laws and industrial policies, which would favor the economy of Japan and not stretching the economic ability to the outside world and compete for a shoulder to shoulder. It was sufficient for Japan to boost their economy at that time rather than trying to overtake every state in the business world. Some scholars have argued that Japan would have made miracles regarding the business systems used at that time of the high economic growth if there was enough technology to supplement the rise of the economy (Dyer &Ouchi, 1998, Pp. 89-121). Alteration of the business systems has caused the whole change regarding operation and management of the business. The use of technology to operate and manage industries was not used to its maximum potential in the high growth era of the Japan, but it was a different case beyond the 1990s since a high level of technology was used in the in the lost decades concerning operations and management of the business. Therefore, this can only imply that the business systems used in the country’s high growth period are entirely different from the business system used in the lost decades.

The economic sluggishness in Japan between the 1990s and early 2000s followed the downfall of the bubble period (Kawamoto et al., 2017, Pp. 32-56). The country was frustrated to change into changing their policies, which governed the business systems and the labor market. Nevertheless, it took longer than expected to recover from the tragedy even after improving the operations of the country. Indeed the excessive and extreme loan allocations necessitated the stagnation of the economic growth. The economist in the country was of the view that one of the reasons of Japans economy breakdown was that they gave out loans with less concern for the quality of the debtor and therefore the country’s economy escalated in a ridiculous manner easy to fall. The system used and relied on in the operation of the nation was not durable enough to support a country’s economy for an extended period.

The stock of the Japanese broke down when the country’s government was desperately trying to resuscitate the inflation in the country (Kawamoto et al., 2017, Pp. 45-76). Little did they know that raising the banks and loan interest rates would be the cause of their crushed economy. The Japanese were carried away during the country’s high growth, and they raised their banking rates only to later reducing them for the sake of their survival (Maluck et al., 2017, Pp. 32-56). The corporate world in Japan incurred too many losses to the extent of bailing out commercial organizations through money infusions from the administration of the government. The bank could no longer support the economy of the country. Some people argue that the inactivity of the banks in Japan was the primary reason for the country’s economic stagnation. The banking system of the nation changed from loaning out money to investors to surviving on surety funds. Majority of the companies and firms in the country were conducted through debts in the unfavorable condition of the stock market.

Through the discussion, it is evident that economists, scholars, professors and even the everyday people differ in opinions to what led to the downfall of Japan high economic growth and the paths the country took in the course of jump-starting the country’s economy. Nevertheless, there is a vast difference between the two eras concerning the business system used to run the country. It is understandable for a state to change its operations and policies when faced with challenges and problems, which need to be solved for the betterment of the country (Maluck et al., 2017, Pp. 67).

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