In This Review

Can Japan Compete?
Can Japan Compete?
By Michael E. Porter, Hirotaka Takeuchi, and Mariko Sakakibara
Perseus, 2000, 208 pp

In the late 1980s, many American and European firms doubted whether they could ever seriously compete in cost, quality, and novelty with their leading Japanese counterparts -- which were thought to be significantly assisted by the Japanese government. That concern triggered attempts to both emulate Japanese practice and protect against Japanese products. How the tables have turned. Yet readers should not be misled by the book's provocative title. Its authors answer their question resoundingly in the affirmative, but they ask whether Japan has the will to reform both the government's approach to business (less regulation, more support for competition) and corporate management (less emphasis on continuous improvement in all sectors, more attention to strategic planning, specialization, and innovation). Based on a decade's worth of research on Japanese industrial performance, the authors' conclusions strongly contradict the conventional wisdom. In their eyes, heavy government engagement has usually brought failure, or at best mediocrity -- not success. Successes occurred mainly when Japanese firms came under high competitive pressure, despite occasional government-sponsored cartels. The authors doubt that a distinctive form of Japanese capitalism will emerge to offer an alternative route to commercial success.