Until recently, Japan's postwar rise was envied by the world as an economic miracle driven by better approaches to management and a seemingly superior form of capitalism. It was some nine years ago, at a time when Japan's economic success was overwhelmingly credited to its government's involvement with industry, that Porter and his team began an in-depth study of the Japanese economy. By contrast, the country was least competitive in industries such as chemicals, aircraft, and software where there was significant government involvement. While upsetting the West's conventional wisdom about the reasons for Japan's success, Porter and his coauthors emphasize that Japanese practices such as total quality and continuous improvement were valuable additions to U.S. industry. But, as they point out, if improvement of best practice is the driving force within an industry, its outcome is competitive convergence and eventually decreased profitability.
Strategy rests on choosing a unique position by offering a different mix of value than competitors.
If Japan's economy is reenergized by strategic thinking and new competitive approaches, the United States will be forced to reexamine some of its own weaknesses, such as a poor education system, adversarial approaches to problem solving, a declining commitment to basic research, and short time horizons in both business and government. Japan, which is strong in all those areas, could once again be a formidable U.S. competitor. And that, say the authors, would ultimately be good for the United States. Knowledge management experts Cohen and Prusak identify the social elements that contribute to knowledge sharing, innovation, and high productivity and show how nearly every managerial action can enhance or diminish an organization's social capital. How Mature Companies Can Outsmart Upstarts , by Richard Leifer, Christopher M. McDermott, Gina Colarelli O'Connor, Lois S. Peters, Mark Rice, and Robert W. Veryzer, is a groundbreaking book that identifies the new managerial competencies firms will need in order to outsmart upstart challengers.