Research suggests that only a third of change-management programs globally achieve their original objectives. Employee resistance is a factor in a significant proportion of programs that fail. A few core elements of change management are universally recognized: inspirational and effective change leaders to act as role models; a change story, with real meaning, to persuade leaders and employees; new mind-sets and behavior among employees; and the orchestration of change in an expanding, self-sustaining wave throughout the organization.
Leaders in Japan understand that change programs fail at the middle-management level, where just a few people or even one can impede the consensus-building process. We believe that change-management programs can increase their chances of success not by fighting a consensus-oriented culture or by strengthening the top-down communication cascade but by focusing greater effort on the potential blockers. A set of simple practices can increase the chances of success in major transformations. Here we share our observations and lessons on how to drive change in Japan.
The objective is not to treat the subject exhaustively but rather to provide empirical observations from our experience. Change leaders have a pivotal role in driving change. They take the first step in a new direction, they show others a new way, they take risks, and they trigger a cascade of change throughout their organizations.
First-mover leaders in the West have a strong sense of mission, a passion for innovation, financial incentives, pressures for instance, from shareholders —or a mix of all these. CEOs are usually groomed and chosen to drive change at various levels of the organization because of their record in driving performance.
Most important, global CEOs are appointed with a mission and chosen for their ability to deliver on goals. Shareholders believe that these leaders are up to the next challenge and the next opportunity. Many though not all senior leaders of traditional Japanese corporations hold their positions in recognition of their past contributions and their ability to navigate disparate divisions of the organization through long rotation programs.
Pressure from shareholders is lower; many companies still do not have independent boards that represent them. Finances are managed on longer cycles—midterm plans cover three to five years, with only a negligible emphasis on quarterly performance. A culture of harmony values coordination and smooth collaboration rather than standing out or pushing unilateral initiatives.
This culture makes it less likely that change leaders will emerge and assert themselves by taking risks and role-modeling new ways of working. The conditions in which that might happen simply do not exist. Although this mind-set survives crisis situations, a crisis does help to identify leaders of change.
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Those in Japanese companies tend to fall into either of two categories. The first consists of outsiders: company executives initially rotated outside of headquarters and brought back to take on a risky challenge. Middle managers, the second category, take responsibility for driving change because they are committed to the future of the organization or to a vision of how the company could change. Immediate followers play a key role in the transformation of global organizations.
This creates a risk-averse environment where mistakes are costly. In the absence of meaningful role-modeling from the top, decisions about change are made without any sense of what the leader will accept.
At the beginning, any change does trigger negative consequences for others, since it requires related changes to accommodate an overall new way of working. In summary, the conditions in which immediate followers could follow do not exist in Japan. Creating them would not be a simple change-management process—it often involves achieving the change itself. Harry Potter. Popular Features. New Releases.
Description This volume is the product of a three-year collaborative project between Japanese and American scholars. Topics include foreign trade, foreign direct investment, coordination of monetary and fiscal policy, development assistance, telecommunications, intellectual property rights, and agricultural and corporate culture issues. The comparative analyses benefited from continuous dialogue among scholars from both sides of the Pacific.
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Product details Format Hardback pages Dimensions x x Illustrations note XVI, p. Table of contents First Foreword; Y. However, on certain products, such as crude oil and natural gas, the Soviet Union is the world's largest producer Note. Its production trends can have a major impact on the international energy situation. Moreover, the Soviet export of natural gas to the Western countries in the same year was approximately 1.
Germany and France, in particular, depend around percent of their natural gas consumption of imports from the Soviet Union according to statistics of the IEA and the British Petroleum. For long-term economic development of the Soviet Union and the Central and Eastern European countries, it is necessary to push the economic reforms of these countries. As an important means to achieve this goal, it is essential to integrate their economies into the world economy by expanding their relations with the world economy, particularly with the Western economies, through such means as promotion of trade.
Amid such a trend, if constraints in economic exchanges between the East and the West are removed and the world economy is integrated into one, the phrase "East-West economic relations" will gradually lose its meaning.
Successful economic reforms of the Soviet Union and the Central and Eastern European countries have the potential of bringing about enhanced prosperity and development of the world economy. However, such a large-scale transition from the socialist economy to the market economy is unprecedented in history. In addition, these countries lack not only the knowledge of the principles and systems of the market economy, but also the understanding of the values and behaviors which form the basis of the market economy. Therefore, in order to make the economic reforms of the Soviet Union and the Central and Eastern European countries a success, it is natural that self-help efforts of these countries are primarily essential, but it is also important for Western countries to provide appropriate support in accordance with the respective situation of each country.
As regards the Central and Eastern European countries, both the Political Declaration and Economic Declaration of the London Summit confirmed the overall support toward their reforms. As for the Soviet Union, an agreement was reached among the G-7 countries to support its efforts for democratization and introduction of a market economy through the discussions at the Houston and London Summits. The reforms in the Central and Eastern European countries are implemented in accordance with clear and feasible economic programs, to which positive support both technical and financial is effective and necessary.
On the other hand, as for the Soviet Union, which has not introduced such an economic program, it is clear even from an economic angle alone that technical support to help the country transform into a market economy should be the central form of assistance. Japan is actively providing both technical and financial support to the Central and Eastern European countries, giving priority to such sectors as agriculture, job training, investment promotion, environmental preservation, energy, market access improvement and international balance of payment supports.
As a means of technical assistance to the Soviet Union, the furnishing of market economy know-how through exchanges of economic experts is particularly important. Japan has already received Soviet survey missions and has dispatched experts to the Soviet Union, and signed an agreement on technical assistance during President Gorbachev's visit to Japan in April Moreover, it is necessary for the Soviet Union to divert its resources channeled into the military sector to the private sector. The importance of such a conversion from military to civilian demand was referred to in the Economic Declaration of the London Summit.
In relation to this point, Japan dispatched in July a survey mission on the conversion issue with the participation of the United States. Frameworks to discuss and coordinate bilateral cooperation on the economic reforms of the Soviet Union and the Central and Eastern European countries have been established, a specific case being the Group of 24 countries on coordinated economic assistance to the countries of Central and Eastern Europe G which was agreed to be set up at the Arche Summit in Currently, the scope of the support of the G has been extended to all the Central and Eastern European countries.
The scope of the support of the EBRD includes the Soviet Union and the Central and Eastern European countries, and its functions are to promote private sector activity, mobilize domestic and foreign capital, foster productive investment and nurture capital markets. Specifically, it established in March a "Center for Cooperation with the European Economies in Transition," which hosts seminars and symposia, as well as provides technical assistance and trains experts.
The program provides reviews of the general economic situation and prospects of each country, invitation to participate in meetings of selected OECD subsidiary bodies, reviews of issues and policies in specific areas and technical assistance in the implementation of policies and others. In order to promote economic reforms of the Soviet Union and the Central and Eastern European countries, the expansion of trade is extremely important. From this viewpoint, the Economic Declaration of the London Summit expressed a determination that, on the Central and Eastern European countries, "We renew our commitment The IMF and the World Bank, through their lending activities to the Central and Eastern European countries and their formulation of macro-economic stabilization programs which ensure the effectiveness of such loans, play leading roles in the financial support to these countries.
The Soviet Union has applied for membership in the IMF and the World Bank, but conditions are not yet considered to have been met for the admission to these institutions. On the other hand, a consensus has been reached among the major Western countries to support the establishment of a special association between the Soviet Union and the IMF and the World Bank which will make it possible for the Soviet Union to receive technical assistance from the two institutions. In addition to the above, as regards the Central and Eastern European countries, moves to integrate their economies into the world economy are seen in practical terms.
These agreements aim at the liberalization of trade and investment and are expected to contribute to economic vitalization of the three countries. Naturally, this kind of agreement must be compatible with and complementary to the multilateral free trading system. Another example is the improvement in access to the Western markets by the Central and Eastern European countries.
In July , the United States announced the Presidential Trade Enhancement Initiative and expressed to proceed with the application of the preferential tariff treatment to the Central and Eastern European countries. Japan applied the most-favored-nation status to the Soviet Union and the Central and Eastern European countries excluding Albania , and the preferential tariff treatment to Poland, Hungary, Bulgaria, Romania and Yugoslavia.
In relation to these points, the Economic Declaration of the London Summit spelled out that "Expanding markets for their exports are vital for the Central and Eastern European countries. We welcome the substantial increases already made in exports to market economies and we undertake to improve further their access to our markets for their products and services, including in areas such as steel, textiles and agricultural produce.
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As illustrated above, the changes in the Soviet Union and the Central and Eastern European situations brought about a policy to economically support these countries among Western countries. At the same time, a change has been brought about in the traditional policy of the West toward these countries. At the COCOM, the task to formulate a new Industrial List core list , which limits the restriction controls to truly strategic items, was made over a one-year period. As a result, at the seventh COCOM High-Level Meeting held in Paris in May , a new Industrial List which rearranged the conventional list of 80 items into nine categories, including electronics, computers and telecommunications, was adopted, achieving a large-scale deregulation.
This was the first major revision of the list since the COCOM was established in and bears a historical significance. With a further change in the Soviet Union and the Central and Eastern European countries in the future, the COCOM will continue to pursue its necessary operations, which include the revision of the International Munitions List and the International Atomic Energy List, the removal of certain countries from the list of prescribed countries and the review of the new International Industrial List.
Economies of the Developing Countries. The real term economic growth rate of the developing countries, which remained stable at 2 to 4 percent throughout the s, dropped to 1. It is estimated that this was largely influenced by the Gulf Crisis. Many developing countries in the Middle East and Asia have suffered from sluggish market prices for primary commodities, in addition to the surge in crude oil prices, decreased revenues from tourism and diminished remittances from emigrant workers.
On the other hand, oil producing countries outside the Middle East were favorably influenced by soaring oil prices, although some of them were hit by the economic recession of the United States. Economic growth of Asian countries continued to be high at 5 percent, while that of African countries dropped from 3. It has, therefore, become increasingly important for the industrialized countries, including Japan, to provide well-coordinated assistance in accordance with the respective conditions of each developing country.
The accumulated external debts still pose a serious problem to the sound development of the international economic and financial system. Many debtor countries have not yet fully restored repayment capability.source
Economic, Industrial and Managerial Coordination between Japan and the USA
Furthermore, due to the reluctance of private banks to provide loans, since the amount of money flowing out of the developing countries to repay their debts has been exceeding the amount flowing into them as new loans the capital flowback phenomenon. In order to solve the debt accumulation problem, the industrialized countries, debtor countries and international institutions have been making concerted efforts.
For the debtor countries with relatively high income levels which are heavily indebted to private banks, such as Latin American countries, the basic measure is the "Strengthened Debt Strategy" the so-called "Brady Plan". This strategy emphasizes debt and debt service reductions of private bank debts in addition to the traditional new loan measure. The plan has been repeatedly endorsed by the international community at various occasions such as the G-7 Summit and other meetings and has already been applied to various countries including Mexico, Venezuela and the Philippines.
On the other hand, for the economically fragile poorest countries, especially those in Sub-Saharan Africa, a specific framework for debt relief, including partial cancellation of bilateral official debts the so-called "Toronto-terms" has been successively applied since October Furthermore, in response to the agreement at the Houston Summit, a revision of the terms is under way, taking into account the persistent serious economic conditions of the poorest countries. For those debtor countries whose income levels are higher than those of the poorest countries but also rely heavily on bilateral official loans, relief measures centering on longer repayment terms have been successively implemented since September Moreover, since the beginning of , special debt relief measures were applied exceptionally to Poland and Egypt.
The fundamental solution to the debt accumulation problem requires economic reconstruction of the debtor countries.
To this end, it is important that both the debtor and industrialized countries work together to build a required environment. In order to do so, first of all, the debtor countries must steadily implement sound economic policies and structural adjustment programs based on agreements with international institutions. Within this scope, it is particularly important that they make efforts to induce capital inflows through improving the investment environment for the recycling of capital flight. On the other hand, the industrialized countries should take appropriate measures in accordance with the debtor countries' situations, such as the ratio of public debts and private debts and income levels.
By cooperating with international institutions, financial assistance, as well as more comprehensive measures, such as to sustain growth of the world economy and to improve access to markets should be implemented in order to support self-help efforts made by the debtor countries. On the basis of the abovementioned thinking, the Government of Japan has contributed positively to the solution of this problem by assisting self-help efforts of the debtor countries in cooperation with other Western industrialized countries and international institutions, such as the IMF and World Bank, through the following specific measures.
As of end of June , already over 70 percent has been committed. It has already extended loans to Mexico, the Philippines and Venezuela. In addition, taxation measures have been implemented since in order to facilitate Japanese commercial banks to respond to the Strengthened Debt Strategy. On the other hand, as to bilateral official debts, Japan has been applying debt relief schemes with due consideration of the fund required by the debtor countries' economic reconstruction, within the international framework and based on agreements such as the Toronto-terms to the poorest countries.
These contributions have been highly evaluated by both the industrialized and developing countries, as well as by international institutions including the IMF and World Bank. While diversification in the stages of the developing countries have been taking place in the world economy, some Asian countries or regions, which continued to show particularly high growth throughout the s by active induction of overseas direct investment and trade expansion, have become an element that cannot be ignored when discussing the management of the world economy.
Since around , the Western industrialized countries have sharply criticized the trade surpluses accumulated by the Asian NIEs and have requested that they take responsibilities similar to those of the industrialized countries. Against these arguments, Japan has insisted that while it is important for the Asian NIEs to play a role that is commensurate with their growing economic strength in the world economy, their dynamism which helps revitalize the world economy should be appreciated.
Also on this premise, it is important for the Asian NIEs to gradually increase their involvement in the management of the world economy in such issues as international trade without decelerating their own growth rates. Japan takes a view that in order to attain this objective, it is necessary first to promote dialogues between the industrialized countries and the Asian NIEs and to deepen mutual understanding. It has, thus, been making efforts to build such fora. Eventually, the dialogue was expanded to one with DAEs, including Thailand and Malaysia and now shows steady progress.
In this dialogue, active exchange of information and views was made with participants from the industrial and academic circles in addition to government officials. Mutual understanding on DAEs' economic situation and trade and economic policies was promoted, thus showing marked achievements. The significance of such dialogue is now commonly recognized by all participating countries, and it is intended to further promote constructive dialogues through workshops on specific themes such as trade or investment.
Amid the search for a new international order with the collapse of the Cold War structure, the Japanese public has become increasingly interested in what is the ideal form of Japan's assistance to the world. Namely, the changes in Central and Eastern Europe and the Soviet Union, as well as the Gulf Crisis, led to attracting much attention to the importance of democratization and economic reforms, military expenditure in the developing countries and the necessity of further efforts of the international community in the field of arms control and disarmament.
In this context, discussions on how ODA, which is the main pillar of Japan's foreign policy, should be used for those issues were actively held. With this background, Prime Minister Toshiki Kaifu announced in the Diet in April that Japan will pay full attention in the implementation of ODA to the following points of the recipient countries: 1 trend in military expenditure; 2 trend in development, production, etc.
While Japan's stance of maintaining its basic principles of humanitarian considerations and the recognition of interdependence in the international community will remain unchanged in the future, those four points should be considered guidelines for future ODA implementation. Arms control and disarmament are, in essence, issues which cannot be realized by Japan alone or simply through economic assistance.
However, Japan's repeated mentioning and reminding of its concern to the developing countries is meaningful in enhancing the awareness for the problem among them, and in promoting efforts of the international community as a whole. Many of the developing countries are still facing serious economic difficulties such as stagnant economic growth, accumulated external debts, poverty and the reverse capital flow phenomenon, all of which make ODA's role more crucial.
Japan's ODA, which in was the world's largest, remained among the world's largest in , second only to the United States on a net disbursement basis. However, its GNP ratio continues to be below the world average 0. Given this situation, Japan is currently keeping on with its efforts to expand, both qualitatively and quantitatively, its ODA under the Fourth Medium-Term Target. The total amount of ODA budget - which consists of ODA budget in the general account, loans from the Government Investment and Loans Program and Government bonds for contribution to international organizations, etc.
A simple increase in the amount is not sufficient to enhance ODA.
It is equally important to make its implementation as effective and efficient as possible in order to promote economic and social development of the recipient countries through ODA. This means that, with the quantitative expansion of aid, improvement of the aid implementation system or the expansion of the personnel engaged in ODA activities, becomes increasingly necessary.
Although Japan is one of the world's largest aid donor countries today, its implementation structure, particularly the number of personnel involved such as the staffs of the Japan International Cooperation Agency JICA and the Overseas Economic Cooperation Fund OECF and the ministries concerned, including the Ministry of Foreign Affairs, is far from sufficient compared with other major aid donors.
The shortage of personnel who are actually stationed in the developing countries, in particular, is critical. Amid the expansion of ODA to Africa and Latin America, which have been less familiar to Japan, the expansion of personnel, especially those to be stationed in these regions, is becoming the most urgent task from now. At the same time, further efforts should be made to foster researchers and aid experts who are involved in identifying aid policies and plans. Improvement of aid quality would remain to be an essential task. For example, Japan's grant element and the grant share are less satisfactory in comparison with other aid donors, as more than 40 percent of Japan's ODA consists of loans.
The Government of Japan is making efforts to increase grant aid and technical assistance. The ratio of the untied aid the procurement ratio of goods and services not restricted to those from the donor country is at world's highest level as a result of consistent efforts, but further qualitative improvement should be made in the future.