Japanese Success? British Failure? Comparisons in Business Performance since 1945

Published by EH.NET (February 1999)

Etsuo Abe and Terry Gourvish (eds.), Japanese Success? British Failure? Comparisons in Business Performance since 1945. Oxford: Oxford University Press, 1997. xii + 288. Tables, charts and index. #40.00 hardback (no $ price listed), ISBN 0-19-829058-6.

Reviewed for H-business by Andrew Godley, Centre for International Business History, Department of Economics, University of Reading, UK.

The question marks in the book’s title are apposite. At the century’s end the conventions in the debate on British and Japanese economic performance are being turned on their head. The contributions here were originally presented by Japanese and British scholars at a special conference held at the Business History Unit, LSE, in 1994. Terry Gourvish, the Unit’s Director, writes that the debate has moved on since the early Japanese ‘miracle’ identifiers of the 1960s and 1970s, and indeed since the excessive pessimism in Britain in the 1970s and 1980s , and that a reassessment of the conventional approaches to these two countries post-war business and economic histories is now required.

The book is divided into five parts, with chapters from a Japanese and British perspective on each of the themes of government-industry relations, management structures, education and training, and finance, before concluding with case studies of the automobile and electronics sectors.

The book’s aim is to provide an appropriate starting point for interested researchers. The thematic chapters achieve this goal, especially those which explicitly embrace the comparative perspective. Etsuo Abe, for example, rehearses the MITI debate, before pausing and suggesting that much of the debate has actually been fairly poorly specified; and that, rather, MITI’s policies need to be assessed on a case by case basis. As is now well known, MITI was sometimes successful, sometimes not, in part because of favoritism to Big Business. Abe’s principal conclusion is that MITI’s greatest asset was the powerful social force for consensus. As Jim Tomlinson points out, it was the absence of any kind of social pressure towards consensus which lay at the continuing opposition of business interests to British government policy in the post-war years, and so stymied any equivalent policy initiatives there.

Hidemasa Morikawa and Nick Tiratsoo provide very different perspectives on management structures. Morikawa shows how the postwar dissolution of the zaibatsu indirectly helped salaried professional managers to climb to the most senior positions in Japan’s largest corporations; their detailed knowledge of shop-floor workers proving to be especially advantageous subsequently to firm performance. Tiratsoo follows by summarizing his own research on the muted impact of training initiatives on British management. This is a shame. It would have been more valuable in this context to review the arguments on the professionalization of British management and family control. Mary B. Rose follows by repeating the familiar complaints about British management being undereducated, and Tomotsu Nishizawa emphasizes the disparities in student participation rates. Differences in training provided by firms stands out here as a hugely important factor in the divergence of manufacturing performance.

The section on finance is perhaps the most interesting because it is the one area where the Success? Failure? approach is most obviously exposed for the cliche it is. Chikage Hidaka emphasizes that while the Japanese fi nancial system may have helped generate fast growth, loose financial control hardly spawned sensible risk analysis or financial responsibility. Forrest Capie, by contrast, dismisses the now outdated criticisms of the City allegedly starving British industry of capital. Indeed, Capie goes on to attack the current version of anti-City ideology, suggesting that there is no evidence to support the oft-cited hypothesis that the ease of raising equity finance in Britain has led to short-termism.

These chapters are the core of the book. My preference would have been for more on these or related themes. The case studies are perfectly reasonable in themselves but out of place. In a collection which seeks to revise stereotypes for scholars wanting to start out on research, the case studies of the automobiles and electronics sectors hardly add to a more nuanced view.

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