LAUSANNE, Switzerland — The twin announcements that Nissan made a record profit of 372 billion yen last year and that Carlos Ghosn has been appointed chief executive officer of the parent company, Renault, as well as retaining the presidency of Nissan, are an extraordinary landmark.
The Ghosn/Nissan story illustrates a number of points. An underlying theme throughout this series is that Japan should open up. This is what globalization is about. As Masao Yukawa, former board member of Mitsubishi Corp., among others, pointed out in his brilliant article “Japan’s Enemy is Japan” (The Washington Quarterly, Winter 1999), when the Japanese use the word “kokusaika” (internationalization), very much in fashion a decade or so ago, they invariably mean internationalization from Japan — outward investments and acquisitions, and tourists going abroad — as opposed to internationalization into Japan — inward investments, acquisitions and immigration. The Ghosn/Nissan story emphatically demonstrates the benefits that can be derived from a foreign input at the highest managerial level.
Ghosn is a Brazilian of Lebanese extraction. It was very wise of Renault, a company not hitherto known for its “globalism,” but rather the reverse, to have brought him into its top management team. This brings home the very important point that Japanese institutions — and not only the ones acquired by foreign capital — also should widen their top talent pool to include Indonesians, Indians, Filipinos, Brazilians, etc., as well as Americans and Europeans.
The stimulating effects of having a high degree of diversity in positions of leadership have been strongly felt in Europe for some time and account for one of the key (and relatively rare) forces of vibrancy in European societies. Ghosn has done a lot to bring in powerful gusts of fresh air into the hitherto stifling atmosphere of Renault, just as France’s top national business school, HEC, has benefited from the innovations and vision brought in by its director, Bernard Ramanantsoa, a native of Madagascar.
There has been some change in Japan in this respect. There are a few foreign presidents of Japanese companies now. There also are, or have been, foreign presidents of Japanese universities, for example, Gregory Clark at Tama University and George Packard at International University of Japan, or IUJ. But these are, with all due respect to the institutions concerned, somewhat on the fringes of Japanese society.
The Japanese tertiary education system is so ossified that it is impermeable to competition. Although, for example, IUJ was the only Japanese university ranked among the top 20 Asian MBA-awarding institutions by asia-inc magazine, it does not get much notice in Japan. IUJ has certainly not had the impact on Japan that INSEAD, initially also perceived by the French as a foreign implant, has had on France.
The process of globalization should occur much more in mainstream Japanese society. Not just foreign-acquired companies, like Nissan, Mitsubishi Motors and Ford, but “true blue” Japanese companies, such as Shiseido, Seiko or Marubeni, should have foreign CEOs. The same applies to educational institutions. Universities in most countries tend to be rather stuffy, but Japanese universities are definitely among the stuffiest, most hidebound, hierarchical and, consequently, unproductive. Having foreign professors, especially ones from other Asian countries and Japan’s former colonies, would have a significant impact not only on the institutions but more importantly on the students, thereby preparing them far better for embracing life in the global era.
The point is not, of course, that foreigners, including foreign bosses, are invariably better than natives. It is rather that they are not invariably worse and under certain circumstances can do a lot of good. In Japan, more foreign input at the top should also have a positive effect on attitudes.
Something I keep wanting to emphasize is the importance of opening up to foreign bosses not just from the West, but also from other countries of Asia. Chauvinism, like any form of protectionism, not only has moral implications, but also economic ones.
About 20 years ago I was seeking to promote the products of an Indian software company in Japan. I called on one of the major Japanese electronics companies and was met with a considerable and quite blatant degree of incredulity that the Indians could conceivably produce anything at all in technology that could be of any interest to a high-tech Japanese company.
The point has still not quite sunk in. In 2001, only 4 percent of Indian software exports went to Japan. In contrast, 24 percent went to Europe and 62 percent to the United States. In the global battle of competition for excellence, it is not only the best people that counts but also the best products and services. Japanese traditional prejudiced perceptions of Indians are in all likelihood adversely affecting the performance of its companies and its economy.
As I have repeated fairly frequently in a number of articles, the purpose of this series on Japan in the Global Era is based on the assumption that a much more globalized Japan will be good for Japan, and good for the globe. Potentially Japan has a lot to contribute. But I have to admit that even a small, incremental degree of globalization in Japan is faced with truly formidable obstacles. As was pointed out in the recent survey on Japan in The Economist’s April 20 issue: “The Japanese simply do not care all that much about the outside world. They have a long history of isolation, they are deeply suspicious of foreigners . . . and they usually feel at a loss abroad.”
I recently convened an international two-day gathering consisting of some 100 participants originating from about 30 nations ranging (in terms of global clout) from the U.S. to Tajikistan. Also included were, of course, a number of Japanese whom I had invited. The objective of the meeting was to discuss means to improve and invigorate the global market, but that in so doing it is imperative to fortify the global village. Open discussion and cross-fertilization is one of the means that the latter can be achieved.
On the second evening after dinner, I came into the bar to find tables with totally mixed nationalities scattered around the room, except for one table at which were three Japanese. Accompanied by a Spaniard, a Swiss and a Tajik, I invited the three Japanese to join our table. They refused. I invited them a second time, a second refusal. Breaking down the Japanese ghetto in the global village will be a Herculean task!
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