ECONOMIC PRINCIPLES CONDUCTING BUSINESS IN JAPAN

This research examines the application of economic principles in the conduct of business in Japan. The findings of this examination are presented in discussions of demand, supply, market structure, and government regulation of business.

Demand may be considered in several contexts. In this examination, demand is addressed primarily with respect to consumption. From 1969 through 1979, the average rate of growth attained by the Japanese economy was fivepercent.1Since the end of 1979, however, the Japanese economy has not attained a fivepercent rate of growth for any full calendar year. For each year since 1979, however, the Japanese economy has recorded some level of growth between two and fivepercent.

The Japanese economy is not as heavily consumption oriented as is the American economy. Rather, the Japanese economy is oriented toward the export of a high proportion of the goods produced in that country. The American economy, by contrast, is heavily oriented toward domestic consumption.

Private consumption accounts for approximately 51 percent of Japan's gross national product (GNP), compared to about 60 percent in the United States (US).2 Japanese public consumption accounts for 8.7 percent of GNP, compared to about 17 percent in the US, while investment in Japan accounts for approximately 29 percent of GNP, compared to about 17 percent in the US. Exports account for approxim

. . .
not practiced by all Japanese employers, but it is practiced by most major employers. Japanese labor relations policies are typically viewed by Americans as being mistaken.8 In Japan, wages are closely tied to seniority, and salary differentiation by rank and grade are small. Young managers must wait years for promotion, retirement is early, the employment system discourages company switching, and it is difficult to get fired. Almost everything about Japan's management of labor is wrong according to conventional American economic wisdom; yet it is the Japanese who are achieving the greatest productivity gains. Market Structure American economic doctrine decries the creation of cartels and the practice of vertical integration.9 In Japan, however, each concept is accepted and incorporated into the market structure of the economy. The keiretsu is a vertically integrated megacompany.10 Major Japanese manufacturers seldom seek out the lowestcost supply source. Rather, they look to their regular supplier, who quite probably is a member of their keiretsu. Similar practices are followed in obtaining capital, and in the retail marketing of their products. According to the Japanese, these practices develop reliable longterm r
. . .

Some common words found in the essay are:
Supply Significant, United Beyond, Japan's GNP, Trade Industry, Demand Demand, United Japan, According Japanese, US2 Japanese, Structure American, BUSINESS JAPAN, industrial policy, japanese economy, patent law, university press, gnp compared, business japan, conduct business japan, percent japan's, application economic, economic principles, principles conduct, application economic principles, economic principles conduct, principles conduct business, strategy california management,
Approximate Word count = 1649
Approximate Pages = 7 (250 words per page)

More Essays on ECONOMIC PRINCIPLES CONDUCTING BUSINESS IN JAPAN