Over the past decade, "corporate governance" has come to replace "industrial policy" and "Japanese-style management" as the key factor to explain Japanese business performance.

From the 1960s through the early 1990s, many observers focused on the close and cooperative relationship between Japan's economic ministries -- especially the Ministry of Finance and the Ministry of International Trade and Industry -- and the companies under their "jurisdiction" to explain Japan's economic success. As a student at the Harvard Business School in the 1970s, I remember taking the required first-year MBA course on BGIE (Business, Government, and the International Economy), where nearly half of the country cases focused on the success produced by Japan's industrial policy.

Those who felt uncomfortable giving government so much credit for Japan's economic success emphasized what they viewed to be the strengths of Japanese-style management, which included long-term employment, promotion and wages based on seniority, enterprise unions, low labor mobility, patient capital and "keiretsu" ties centered on main banks.