February 16th, 2010
11:40 AM GMT
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Toshiro Era doesn’t look like a radical. Dressed in his conservative blue blazer and tie, he looks like your average businessman in Japan.

But when he starts talking about his plans for corporate Japan, “radical” is among the words that leap to the minds of Japan, Inc. watchers.

Don’t lie. Move quickly. Be transparent. Allow in the media. Get your CEO out front early, even if there’s no consensus.

That’s Era’s message as he lectures two dozen senior managers at a food manufacturing plant two hours outside of Tokyo. It’s the opposite message most of the graying men in this room have heard their entire lives in corporate Japan. They need to change when crisis hits, argues Era.

“Japan is a homogenous and monolingual society. We assume we can gain understanding if we explain well later, even if we don’t talk about it immediately. Unlike Western companies, Japanese companies tend to specify the cause of the problem and fact-find internally first, before coping with the crisis. This move looks very slow and it is the worst move you can make when it comes to crisis management. Japanese companies, especially a conservative company like Toyota, will misstep,” said Era.

Temple University Professor and Japan scholar Jeffrey Kingston says Toyota followed the secretive rules of corporate Japan, a culture that closes off amid challenges instead of opening up.

“In Japan, there has been a greater movement towards more transparency, more accountability, better communication, but it’s a slow movement. This case highlights how much farther it has to go,” said Kingston.

Former National Highway Traffic Safety Administration administrator Joan Claybrook says when safety problems with Toyota’s cars began to emerge, Toyota as a corporation closed ranks.

The NHTSA was also not on the ball and that led to the ongoing safety issues, says Claybrook. “There’s too much secrecy that Toyota was allowed to get away with– withholding information, with not being transparent and forthcoming with the Department of Transportation. And as a result, we’ve had people die, and be injured, and I’m sure there are going to be more.”

Preventing further problems will require a culture change within Toyota, says Kingston. It’s something that appears to be happening, as Toyota’s President, Akio Toyoda, makes more public appearances and reassurances to his consumers.

He has yet to confirm that he will testify before US lawmakers in Washington February 24 and 25, something that Kingston says will be the marker of a true turning point for Toyota’s internal culture.

Back at Era’s seminar at the food manufacturing plant, he’s running through various examples of failures within corporate Japan. With his power point presentation and laser pointer, Era pushed the senior managers to go against the corporate grain. Change is never easy, he says, especially in Japan. But Toyota is proving that sometimes it needs to happen.

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soundoff (13 Responses)
  1. curious steve

    do as we say, japan, not as we do.

    February 17, 2010 at 5:35 pm |
  2. Rob Morrison

    Erm, you might have included Mitsubishi "five former executives of Mitsubishi Fuso Truck & Bus Corp. were arrested on suspicion of violating the Road Trucking Vehicle Law (false report), and two former executives of Mitsubishi Motors Corp. were arrested on suspicion of causing deaths and bodily injury through professional negligence".

    Then there was the "Nihon Arm and Mitsubishi Heavy Industries Ltd., which were in charge of inspecting secondary cooling pipes at the reactor, submitted to Kepco a checklist of items to be inspected. But for reasons that remain unclear, 42 items were omitted.

    These omissions included the pipe that ruptured. It was later revealed the pipe had never been inspected since the reactor started up in 1976." ...

    And there was another one recently..I forget the details.

    February 17, 2010 at 6:07 pm |
  3. Johnnie

    Is this really about secrecy or about a faulty part? I am not certain, but I rather think secrecy cannot cause a crash but a faulty car part can. How far shall we extrapolate? Was it the hot tea that burnt the mouth of the software engineer's mother that kept him awake the night before he finalised the design for the part? Sue the tea company for Toyota's troubles? A little realism goes a long way. (And I do not mean to blame the software engineer, his mother or anyone in this comment.)

    February 18, 2010 at 1:10 pm |
  4. Yvonne Burton

    As a Japan-US business consultant and business blogger: http://www.JapanUSbusinessnews.com, I agree with this article. comments.

    In my blog, Japan-US business news, I have created a forum for the people who are employing new solutions and new ways of thinking in Japan-US business and also advising on the way Japan needs to change in order to survive in business going forward.

    My blog post for today, February 18, 2010 is in this same vein " In Toyota's fall, will Japan Learn its lesson"

    Thank you,
    Yvonne Burton

    February 18, 2010 at 11:30 pm |

    Maybe the western concept of open and transparency counts. But still Japan has shown the world what it takes to be one of the biggest economy in the world. Toyota should be an example to GM and Ford when you do business – some secrecy does help in the world of business – both British and Americans understands this very well from their past practices ! Pramok

    February 22, 2010 at 1:45 am |
  6. avrailer

    @ Curious Steve

    First off GET OFF JAPAN!
    I think your just mad because we are more technologically advanced. You are the one who buys OUR products. As a matter of fact if you didn’t buy our products you most likely wouldn’t have a car… EVERYONE! CURIOUS STEVE IS THE ONLY PERSON IN HERE TO TALK CRAP ABOUT US AND DRIVE A TOYOTA!!!
    Made you think a little better eh? Well you are an imbecile and are oblivious to the fact that at any point japan could destroy YOU!

    February 22, 2010 at 2:59 pm |
  7. tb

    @ avrailer

    Well lets calm down a bit, we dont all drive toyotas...or want to Japanese cars fill a low budget / high quality void,but by no means are they "best" cars around. As far as tech advancments in some arenas yes japan has the upper hand but lets not be foolish enough to make sweeping claims like that.. And as for your last comment the only thing japan is capable of destroying is the whale population of the world.

    February 23, 2010 at 6:16 am |
  8. Jane

    I for one had been driving Honda and Toyota cars since I was a teenager in CA and my father owned Acura and Nissan too. Considering that I live in Europe now and tempted to move to BMW and try the German engineering, the slow response from the Japanese car giant is actually helping me make the decision of switching to the German cars for the first time in my life. I think it is about time the top leadership in Toyota testifies in WA if he wants to help the company's image in the US because people dying and getting into terrible accidents are no laughing matter. Ford dealt with their roll-over SUVs back in the 90s so Toyota should do what is right.

    February 23, 2010 at 10:03 pm |
  9. Avrailer

    @ TB

    Your right I did overreact tb thanks for pointing that out but my fact stays your right not everyone drives a Toyota but there is more than just Toyota. There is also Honda, Mitsubishi, Kawasaki, Mazda, Suzuki, Nissan, and Isuzu. And then again The Toyota Prius a four seat hybrid electric vehicle (HEV), was the first HEV to be marketed when Toyota introduced it in Japan in 1997. The Honda Insight a two seat HEV, followed in 1999 when it was sold in both Japan and the United States. The Prius had its U.S. debut in 2000. I rest my case but I still feel that Japan is better… I guess it’s because I’m Japanese-American (more Japanese

    February 26, 2010 at 4:39 pm |
  10. Ryan Komuso

    @ Avrailer

    For you as a Japanese-American (more Japanese, I STRONGLY recommend reading Dogs and Demons by Alex Kerr. It will surely enlighten you with many of the hidden truths about modern Japan (not including whale and dolphin slaughtering). PLEASE read it, and then see if you still feel Japan is better...

    March 2, 2010 at 5:38 am |
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    Kate Kuree

    May 17, 2010 at 1:36 am |
  12. Business Consultant

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    October 25, 2010 at 6:54 am |

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