The management structure of a typical American or European company, says Till Vestring of Bain, an American consultancy, looks like a pyramid. In a Japanese firm, by contrast, a small group of executives sits on top of a solid, broad block of middle managers, from which springs the bureaucratic ailment called daikigyobyo, or big-company disease. Japanese boards reflect these weaknesses. Thanks to bottom-up management, board members are not expected to make tough decisions. Directors get a big office, membership of a golf club and a chauffeured limousine as a reward for a lifetime of slog through company politics.
All directors are insiders.
They rise up through the ranks and represent their division on the board, which is why boards grow with the size of companies. At the biggest firms, board tables can seat 50 or more. But even boards small enough to make tough decisions avoid them. Stakeholder capitalism holds them accountable to no one. They bury their financial losses and their surplus workers in subsidiaries, hoping that the day of reckoning will never come, or at least not in their short tenure.