Westerners and the Japanese

PART 1

Japanese in Europe have reluctantly learnt to use first names but feel more comfortable when addressed by the last name followed by san. Senior people may be addressed by their title plus san instead of the last name. First names are reserved for family and close friends.

Titles, modes of address and language are carefully measured to indicate relative status, as are the other subtle status symbols of office life such as job titles or the positioning of desks in an open office. For example, seniors would have their backs to the windows where they could enjoy the privilege of natural light in contrast with the fluorescent lighting pervading Japanese offices. While being very sensitive to fine distinctions of rank, the western use of material goods to communicate achievement and authority are noticeably lacking. Offices areworkmanlike, cars are unostentatious and so on.

More important than the actual forms of language and behaviour is pervasive politeness and a concern to avoid embarrassment to oneself or others. The displays of temper or any other uncontrolled emotions arc seen as a sign of weakness.

Japanese manners are based on reciprocation, asense of mutual indebtedness. To many westernersthe excessive deference of asubordinate to a superior is less surprising than that it is returned in kind. Relationships between all levels are built on exchange, whether gifts, courtesies, help, information and so on.

Extreme politeness does not exclude openness in relationships. Europeans, especially women, may be surprised at personal nature of conversation. This is usually because Japanese need to know people wellbefore they canbe comfortable with them. In some European countries you need not trust people to work with them as long as they do their job. In a Japanese environment there is a higher tolerance of professional and human frailty, but it is compensated with a greater demand for loyalty and trust.

Japanese are very punctual when politeness requires it and especially with senior people. Otherwise time is fluid. A meeting will carry on until it is finished or interrupted by the demands of a senior person outside. The working day can be very long, reflecting a demanding work ethic and a high level of commitment. Being the first to leave, even if you have no work to do, is a snub to the group and an embarrassment to your senior. As in Japan, Japanese may regularly work on Saturdays, rarely take more than a week's vacation or their full entitlement, and consider sick days as holidays.

PART 2

On informal occasions when they know everyone well, Japanese will be humorous and entertaining. At a formal meeting or among strangers they may be awkward and withdrawn and too nervous to loosen up. In presentation and speeches to westerners many have learnt that the audience expects jokes and informality and respond accordingly. Japanese do not usually appreciate flippancy or triviality and find self-deprecation a mystery.

The most common complaint among westerners is that most major decisions seem to be made outside office hours by their Japanese colleagues. While in day-to-day activities they are kept well informed, they are kept in the dark about the overall direction of the company. For a westerner to progress in a Japanese company it is essential to work late in the evening and at weekends. This can be a major impediment for women who wish to progress in a Japanese company. In the workplace itself most of the women 1 talked to did not find Japanese more chauvinistic than their western counterparts. The difficulty was in establishing the appropriate relationships, as well as finding the time, to join in the after-hours discussions.

It is not so easy for men either. While the expatriate Japanese is considerably more flexible and adaptable to European ways than the stereotypical image of the chauvinistic and single minded Tokyo salaryman, it is hard to break into the inner circle. As in any foreign company a first requirement is to make an effort to speak the employer's language. As well as being practically useful it demonstrates a commitment to career and company to which Japanese are particularly sensitive.

It is this level of dedication to the organization which is probably the biggest hurdle to making any more than an averagely successful career in a Japanese company. The emotional and practical commitment that Japanese expect is incomprehensible to most westerners. The term 'British disease' is a byword among Japanese for idleness and is extended to most other western countries. The Japanese disease is Karoshi, or death by overwork. The difference between the British and Japanese diseases is perhaps the biggest cultural hurdle for each side to overcome this list. Ask yourself how culture may be shaping your own reactions, and try to see the world from others' points of view.

Unit 2. Economics

Text 1

The Rise of Keynesian Economics

When John Maynard Keynes responded to popular demand for an alternative policy to laissez-faire. In his book, The General Theory of Employment, Interest, and Money, he gave people both an alternative explanation of the depression and a suggestion of what to do about it that didn't rely upon cutting wages. While there were many dimensions to Keynes's ideas, their essence was that Say's law (supply creates its own demand) was wrong. Keynes argued that Thomas Malthus was right—general gluts could exist (and certainly did exist in the 1930s).

Keynes (a shrewd investor who was extremely active in the financial sector) argued that the financial sector didn't work the way Say's law assumed it did. It didn't translate savings into investment fast enough to prevent a general glut in output. According to Keynes, the level of savings did not determine the level of investment. Instead the level of investment would change the level of income and thereby change the level of savings. Let's consider an example. Say that a large portion of the people in an economy suddenly decide to save more and consume less. Consumption demand would decrease and savings would increase. If those savings were not immediately transferred into investment (as the Classicals assumed they would be), investment demand would not increase by enough to offset the fall in consumption demand and aggregate demand would fall. There would be excess supply. Faced with this excess supply, firms would cut back production, which would decrease income. People would be laid off. As people's incomes fell, their desire to consume and their desire to save would decrease. (When you're laid off you don't save.) Eventually income would fall far enough so that once again savings and investment would be in equilibrium, but that equi­librium could be at a lower income level at a point below full employment. In short, what Keynes argued was that the economy could get stuck in a rut.

Once the economy got stuck in a rut with a glut, it had no way out. The government had to do something to pull the economy out of the rut. Keynes and his followers presented a set of models and arguments to explain their views. Those models, which were aggregate models, became the central macroeconomic models.

Keynesian ideas spread like wildfire among the younger economists. By the 1950s Keynesian economics became accepted by most of the profession. The policies that came to be associated with Keynesian economics were monetary policy and fiscal policy. Monetary policy meant varying the money supply to affect the level of spending in the economy. Fiscal policy meant varying the government budget deficit or surplus (by varying government expenditures and taxes) to control the level of spending. Together they were supposed to provide a steering wheel by which economists could control the economy, keep­ing it free of business cycles.

Text 2

Famous Economists

Jean Baptiste Say.Supply creates its own demand." This was the famous Law of Markets expounded by the French economist Jean Baptiste Say in his Treatise on Political Economy (1803). This work was the first popular and sys­tematic presentation of Adam Smith's ideas. As a result, it estab­lished Say as one of the leading econ­omists of the early nineteenth cen­tury. Say's Law became central to clas­sical economic thinking. In modern language the Law meant that the level of aggregate output (GNP) always equaled the level of aggregate income (GNI). This income enabled society to buy the output produced. Therefore, general overproduction of goods (due to a deficiency in aggre­gate spending) was impossible.

But what if businesses misjudged the markets for their goods? In that case, the classicists contended, un­profitable overproduction of specific commodities could and would occur. But such errors would be temporary and would be corrected as entrepreneurs strove to fulfill consumers' preferences by shifting resources out of the production of unprofitable goods and into the pro­duction of profitable ones.

Say's law is central to the Classical vision of the economy. It says that there can never be a general glut of goods on the market; aggregate demand will always be sufficient to buy what is supplied. Not all Classical economists initially accepted Say's law. The most spirited argument against it was put forward by Thomas Malthus, a preacher. Malthus argued that when people saved, part of their income would be lost to the economy and that there wouldn't be as much aggregate demand out there as aggregate supply. According to Malthus, Say's law did not necessarily hold true.

Say and Ricardo rejected Malthus's argument. They argued that people's savings were not lost to the economy. When people saved, they did it by lending their savings to other individuals. The people who borrowed the savings would spend what they borrowed on investments. Classical economists argued that the interest rate would fluctuate to equate savings and investment. If people's desire to save increased, the interest rate would fall and the quantity of investment would increase. So any savings seemingly lost to the system would be actually translated into investment, making aggregate demand (total buying power in the economy) equal to aggregate supply (total production), through either a direct route (consumption) or an indirect route (investment by way of savings). Aggre­gate demand (investment plus consumption) always equaled aggregate supply.

Thomas Malthus.As the eighteenth century drew to a close, England found itself facing grave social problems. Among them were widespread poverty, the growth of urban slums, and severe unemployment. These social prob­lems resulted from economic dislo­cations caused by years of war with France. In addition, the factory sys­tem of production had begun and was displacing numerous workers. It fell to a hitherto unknown En­glish clergyman, Thomas Robert Malthus, to explain these problems. In his famous Essay on Population , (1803), he expounded the belief that population tended to outrun the food supply. The result would be bare subsistence for the laboring class. This prophecy has become a stark re­ality in many of the overcrowded poor countries of the world.

Malthus also contributed signi­ficantly to economic thought, anti­cipating certain concepts that be­came important in twentieth-cen­tury thinking. In his Principles of Political Economy (1820), he devel­oped the concept of "effective de­mand," which he defined as the level of demand necessary to main­tain full production. If effective demand fell short, he said, overproduction would result. Malthus thusdisagreed with Say on the Law of Markets.

David Ricardo.Generally considered to be the greatest of the classical economists, David Ricardo was the first to view the reconomy as an analytical model. That is, he saw the economic system as an elaborate mechanism with in­terrelated parts. His task was to study the system and to discover the mechanisms that determine its behavior. In so doing, Ricardo formulated theories of value, wages, rent, and profit. These theories, although not entirely original, were for the first time stated completely, authorita­tively, and systematically. Portions of them became the basis of many subsequent writings by later scholars. Some of Ricardo's ideas still remain pillars of economics.

Ricardo, an English businessman rather than an academician, wrote a number of brilliant papers. His ideas were largely incorporated in his work Principles of Political Econ­omy and Taxation (1817). The book was an immediate success, and it at­tracted many disciples. As a result, Ricardo's influence became perva­sive and lasting. Indeed, Ricardian economics became a synonym for classical political economy (or "clas­sical economics," as we call it today). Like his predecessors, Ricardo was mainly concerned with the forces that determine the production of an economy's wealth and its distribu­tion among the various classes of society. He also made major policy recommendations to Parliament concerning the dominant social and economic problems of his day.

John Stuart Mill.Known equally well as a political philosopher and as an economist, the Englishman John Stuart Mill was the last of the major "mainstream" clas­sical economists. His great two-vol­ume treatise Principles of Political Economy (1848) was a masterful syn­thesis of classical ideas. The book became a standard text in economics for several decades. Numerous stu­dents in Europe and America learned about economics from this basic work. So, too, did a number of American presidents—including Abraham Lincoln—although they did not always correctly apply the principles they learned.

Mill's major objective was eco­nomic reform. Although he be­lieved in laissez-faire, he went beyond the "natural law of political economy." He did so by advocating worker education, democratic pro­ducer cooperatives, taxation of un­earned gains from land, redistribu­tion of wealth, shorter working days, improvements in working condi­tions, and government control of mo­nopoly. These measures, Mill felt, would ensure workers the benefits of their contributions to production without violating the "immortal principles" of economics. It is easy to see why contempo­raries of Mill often labeled him a so­cialist. But he believed too strongly in individual freedom to advocate major government involvement in the economy. By today's standards, Mill probably would be classified as a moderate conservative.

Irving Fisher.IrvingFisher, professor of eco­nomics at Yale University, was one of America's foremost economists prior to World War II. A mathemati­cian and inventor as well as an econ­omist, he was a profound scholar and a prolific writer. In addition to twenty eight published books, he wrote dozens of articles in profes­sional journals. Because of their high quality and enduring value, some of Fisher's publications are fre­quently referred to by scholars today. Fisher's major interests were the study of money and prices. In a book entitled The Purchasing of Money (1911), he stated the equation of exchange—which subsequently became known as the Fisher equa­tion. A modernized version of the equation is expressed in this way, the equation encompasses transactions for jinal goods, and thus uses readily avail­able GNP data. (Such data did not exist in Fisher's time, causing him to use a less practical equation.) The equation explains a cause-and-effect relationship between the quantity of money and the price level.

Milton Friedman.A Nobel laureate (1976) and professor emeritus at the University of Chicago, Milton Friedman is perhaps best known for his approach to money and his unique position as America's leading monetarist. Using carefully documented re­search going back to the late nine­teenth century, he argues that the crucial factor affecting economic trends has been the quantity of money, not government fiscal pol­icy. Accordingly, he opposes the use of discretionary monetary policy by the Federal Reserve (Fed) to achieve economic stability. Friedman advo­cates instead a money-supply rule—an expansion of the nation's money supply at a steady rate in ac­cordance with the economy's growth and capacity to produce.

Friedman cites the past perform­ance of the Fed as one of the major reasons for this view. Throughout its history, he says, the Fed has pro­claimed that it was using its mone­tary powers to promote economic stability. But the record often shows the opposite. Despite the Fed's well-intentioned efforts, it has been a major cause of instability by caus­ing the monetary growth rate to expand and contract erratically. Therefore, the urgent need is to pre­vent the Fed from being a source of economic disturbance.

Is the adoption of a money-supply rule technically feasible? Friedman claims that it is. Although he admits that the Fed could not achieve a pre­cise rate of growth in the money sup­ply from day to day or from week to week, it could come very close from month to month and from quarter to quarter. If and when it does, he says, it will provide a monetary cli­mate favorable to economic stability and orderly growth. And that, Friedman concludes, is the most we can ask from monetary policy at our present state of knowledge.

Alfred Marshall.In the last quarter of the nineteenth century, there arose in Europe and America a system of ideas known as neoclassical economics. One of the leaders of neoclassicism was Alfred Marshall, a British scholar whose landmark treatise, Principles of Eco­nomics (1890), will forever be re­garded as a masterwork. The book, which went through eight editions, was a leading text in economics for over forty years. Among the major contributions of this and other works by Marshall were the distinction between the short run and the long run, the ex­tensive use of diagrams and models to describe economic behavior, and the equilibrium of price and output resulting from the interaction of sup­ply and demand. Marshall also sys­tematized the use of elasticity, the distinction between money cost and real cost, and many other ideas.

In short, almost everything we read today pertaining to supply and demand analysis, equilibrium, and related notions was originally for­mulated precisely and definitively by Marshall. Few students today re­alize or appreciate the significant role that Marshall's ideas play in their economics education. By the time he retired from his pro­fessorship at England's Cambridge University, Marshall had trained several generations of eminent econ­omists. These disciples went on to assume major positions in universi­ties and government service. One of them was the famous British econo­mist John Maynard Keynes whose ideas are studied in macroeco­nomics. Keynes referred to his former teacher as "a scien­tist . . . who, within his own field, was the greatest in the world in more than a hundred years."

Paul Anthony Samuelson.Paul Samuelson is probably the world's most widely known econo­mist. Several generations of college students in the U.S. and abroad took their first course in economics using his introductory textbook. Millions of readers of American and foreign newspapers and magazines have seen his articles on current eco­nomic policies. Professional econo­mists throughout the world have studied, and have been stimulated toward further research by the ex­traordinary range of his scientific work. This includes hundreds of profound papers and several books dealing with theoretical topics in many areas of economics.

In his Foundations of Economic Analysis (1947), which immediately established Samuelson's reputation as a highly creative economist, he presented a systematic analysis of static and dynamic economic theory. He described, in mathematical form, the "state" of an economic system in equilibrium and the pro­cess or path of adjustment from one state to another. He then linked statics and dynamics by what he called the correspondence princi­ple. This is one of the most funda­mental concepts in the Foundations. The proposition demonstrates that, before comparative statics (the com­parison of equilibrium positions in static states) can be meaningful, it is first necessary to develop a dynamic analysis of stability.

In general, Paul Samuelson's sci­entific contributions — developed in precise mathematical rather than lit­erary form—have greatly deepened our understanding of how the eco­nomic system works. He has shown the general applicability of the con­cept of maximization, subject to con­straints, to many branches of eco­nomics. In recognition of his extraordinary contributions to eco­nomics, he became, in 1970, the first American to receive the Nobel Prize in Economic Science.

Leon Walras, Vilfredo Pareto, Gerard Debreu.Leon Walras's fame rests on his for­mulation of the theory of general equilibrium, which he developed rigorously through the use of mathe­matics. He thus became one of the founders of mathematical eco­nomics, which has flourished to this day. While serving as a professor at the University of Lausanne, Switzer­land, Leon Walras published his great work, Elements of Pure Economics (1874). In this book he showed how a system of simultaneous equations could be used to describe an economy in gen­eral equilibrium. The "descrip­tion," however, is given in a formal theoretical sense only. The necessary data cannot be obtained, and the number of simultaneous equations that would have to be solved is virtually infinite. Never­theless, this does not destroy the value of general-equilibrium theory. The virtue of the concept lies in the precise way in which it demonstrates the mutual interde­pendence of economic phenomena.

Walras was succeeded at Lau­sanne by Vilfredo Pareto, an Italian scholar. In his major work, Manual of Polit­ical Economy (1909), Pareto, like Walras, formulated concepts of gen­eral equilibrium under static condi­tions. However, Pareto was also concerned with the problem of how to maximize total satisfactions in an economy. He developed the con­cept now commonly referred to as Pareto optimality -- a notion that is fundamental to modern welfare eco­nomics. It should be noted that Pareto also made notable contributions to sociology. In fact, his reputation in that field is as strong as his reputation in economics. Together, Walras and Pareto consti­tute what is known as the "Lausanne School" of economic thought. The influence of this school on subse­quent writers — especially in mathe­matical economics, general-equi­librium theory, and welfare economics—has been enormous.

Gerard Debreu is a contemporary scholar following in the Lausanne tradition. A mathematician and economist at the University of Cali­fornia, he was awarded the 1984 Nobel Prize in Economic Science for helping to “prove” the theory of general equilibrium.

Text 3

Economic Data

You cannot be successful in economics unless you can use data. It is through data that we observe the real world. It is in data that we discover the subject matter of economics, and it is in data that we come to confront our economic theories with reality. Only by doing this we can be sure that the theories make sense. Data handling is therefore a crucial skill for the economist.

Data are not just numbers. Anything that provides information about the economic world constitutes data to an economist. Data are the raw material of economics. Economists use data to test their ideas about how the world works and to monitor the performance of the economy. This is a vital role if we are to trust our economic reasoning. We could never develop confidence in a theory if its predictions were always out of line with what actually happens. But economists cannot use laboratory experiments to provide evidence in support of their theories. Instead, they must rely on observations of how people and economic institutions behave in the real world. Graphs represent an economic model or theory which focus on hypothetical relationships or real-world data visually.

Business people use information to get a clear view of many factors affecting the efficiency, productivity, and profits of their businesses. Production managers use statistics data in quality control. Marketing managers do a lot of research, measuring the size of markets, the effectiveness of various marketing techniques, and the needs and desires of prospective customers. Financial managers analyze the performance of their investment portfolios. And risk managers use statistics data to determine risk.

The results of most research efforts can only be made useful by submitting the findings to statistical analysis. Statistics makes any kind of numerical data useful and meaningful. Several types of diagrams are used to display relationships among data (see Fig.1). A line graph is a line connecting points. Single line graphs are used to show trends, to give information about one item. Amounts are given on the vertical axis and time on the horizontal axis. A bar chart uses either vertical or horizontal bars to compare information. Because of its simplicity, the bar chart is frequently used in business reports. A pie chart is a circle divided into slices. The slices are labeled as percentages of the whole circle, or 100 percent. A pie chart provides a vivid picture of relationships, but it is not good for showing precise data. A table is grid of words and numbers commonly used to present data when there is a large amount of precise numerical information to convey.

Fig.1.

Unit 3. Goods & Services

Text 1

Organizational Products

There are two basic types of industrial products. – expense items and capital items. Expense items are relatively inexpensive goods and services that are generally used within a year of purchase. Those that are more expensive and have a longer useful life are considered capital items. Another classification of organizational or industrial products is the most commonly used classification system which outlines the basic characteristics of each class of organizational product:

• Raw materials: basic ingredients that undergo processing in the factory

• Component parts: items used in the assembly of the finished product

• Installations: major capital purchases, such as a new factory building or an airport's computerized baggage system

• Accessory equipment: equipment that aids in the operation of the busi­ness, such as cash registers, photocopiers, forklift trucks.

• Operating supplies: paper, pencils, brooms, and other short-lived items that are routinely purchased and used up in the organization's operations

• Services: work provided by others, such as janitorial services, repair and maintenance services, and the services of lawyers and accountants

All organizational products have one thing in common: derived demand. Derived demandmeans the demand for every organizational product depends on the demand for some other product. The demand for tempera paints, water colors, and chalk sold to the art departments of public schools is derived from the demand of students or their parents for

a basic, well-rounded education. Ultimately the demand for all organizational products depends on consumer demand for finished goods and services.

Text 2

Services

Services are especially important because the service industry now accounts for more than half of per­sonal consumption expenditures. Services have the following characteristics: intangibility, perishability, inseparability, variability.

Goods are tangible, whereas services are intangible. Intangibilitymeans buyers normally cannot see, feel, smell, hear, or taste a service before making a purchase decision. Services, then, cannot be handled, examined, or tried out before they are purchased. This increases buyer uncertainty and necessitates marketing strategies and tactics to "make the intangible tangible." Although services are intangible, the production of a service may be linked to a tangible product. (The transportation service an airline provides is tied to its fleet of airplanes. Renting a videotaped movie is tied to the temporary use of the videocassette).

Services "disappear" quickly. They are perishable and cannot be stored. If a computer sales­person loses a customer, the computer—a tangible good—remains to be sold to another. If a dentist's patient fails to keep an appointment, that half-hour of the dentist's time—the ser­vice to be sold—is gone forever.

A manufactured good may be produced by one firm and marketed by another; thus, the good can be separated from its producer. In contrast, the service is inseparable from its supplier. Inseparability means producer and consumer may have to be present in the same place at the same time for the service transaction to occur.

Most services are delivered by people. Because the quality of service provided is closely tied to the supplier's personal performance, there can be great variability among services provided. Most services are delivered by people. Because not allthe same, variability among services can be great. Dealing with a friendly workers are clerk or having other positive experiences with the people who provide the service may be a major reason why people keep using the ser­vice. Think about your regular hairstylist. Why do you go there rather than to another hairstylist? If you think about hairstyling, dental care, insurance, subway and bus transportation, and all the other services you buy, you will appreciate the importance of services in our economy. We can subdivide the service sector of the economy into many different service businesses: business services (accounting, advertising, consulting), repair services, personal services (hairstyling, maid services), travel and lodging services, entertainment and recreation services.

In other words, service quality is characterized by variability. Services are often heterogeneous because the quality of the service depends on who provides it and how quickly it is provided.

Marketers of services strive to control service quality. One goal is to standardize services to reduce variability, but this is difficult. It is not possible to prescribe and deliver equal amounts of "smiling" by all employees at a bank. Nevertheless, companies that market services often use employee training and incentives, such as employee-of-the-month awards, as steps to control service quality.

If you think about a pasta dinner at a restaurant, you will realize that it is difficult to separate goods from services entirely. This reality has led some marketing experts to array products along a continuum from "mostly good" to "mostly service." A tune-up for your car pro­vides both a good—spark plugs and other parts—and a service—measurement, tuning, and installation of the parts, as well as convenience of the location and other aspects of the total product offering.

Text 3

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