THE APPLICATION OF ECONOMIC PRINCIPLES IN THE CONDUCT OF 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 five-percent. Since the end of 1979, however, the Japanese economy has not attained a five-percent 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 five-percent.
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). 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 approximately 11.3 percent of Japan's GNP, compared to about six-percent in the US. Japan, thus, is far less prone to consume than is the US. This factor is one which companies attempting to market their products in Japan must confront.
Conventional western economic wisdom holds that the "economic system exists to serve the wants of consumers à . Business managers à are driven to do consumers' bidding not by benevolence but by the search for profits in a competit...