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Why Japanese Companies performed Better ?

William Ouchi made a study of Japanese companies and compared them with companies in the US. His aim was to identify the reasons why Japanese companies performed better than US companies, and the reasons why Japanese companies produced better-quality products than US competitors and achieved much better productivity.

Ouchi was not the first management theorist to suggest that companies in other countries could learn from the success of Japanese companies. However, his work is notable because he suggested that the mos efficient type of organisation for the US might be one that combined feature of 'typical' US and Japanese companies.

His study of Japanese companies found that in Japan:


  • Managers have a high level of trust on their workers.                                                                               
  • Managers assume that workers have a strong loyalty towards their company and are interested in team work.                                                                                                                                            
  • Companies in turn show loyalty to their employees, who have employment for life. However, promotion and career progression is slow.                                                                                               
  • Decision-making in Japanese companies is also 'collective', with workers participating in decision-making and management trying to achieve universal agreement and acceptance before decisions are taken.

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