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A Cautionary Tale  for Emerging Market Giants

A Cautionary Tale  for Emerging Market Giants. JAPAN. 35.2% 1994. 20.8% 2000. 11.2% 2008. BRIC. 0.9% 1995. 10.4% 2008. Problem Unable to transform the cultures and processes that propelled their early export-led growth into those needed for global leadership.

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A Cautionary Tale  for Emerging Market Giants

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  1. A Cautionary Tale for Emerging Market Giants

  2. JAPAN 35.2% 1994 20.8% 2000 11.2% 2008

  3. BRIC 0.9% 1995 10.4% 2008

  4. Problem Unable to transform the cultures and processes that propelled their early export-led growth into those needed for global leadership. Will those countries (BRIC) lose their edge in the years ahead, as Japan did ?

  5. Devotion to The Way Japan’s early success: Develop substantial asset bases Achieve economics of scale and drive down cost Maintain the high quality Powerful export value proposition

  6. Devotion to The Way • Japan’s early success: • Created strong corporate policies, practices, thinking and behaviors • Purpose, unity and rules governing relationships and expectations of behavior

  7. Devotion to The Way • Japan’s decline: • Replicating the way • Narrow hiring criteria • eg: mobile telephony Sony Ericsson

  8. Devotion to The Way • Is It Risk? • Developing ways will hinder their international expansion • eg: China (Guanxi) • Russia (Government)

  9. An isolated domestic market • Japan: • little competition • FDI • foreign firms

  10. An isolated domestic market Disadvantage: less competitive e.g. Nomura Is it a risk? BRIC

  11. A docile labour force Japan: • homogeneous labour • few subethnic groups • no local dialects • few immigrants

  12. A docile labour force • Disadvantage: workplace norms • diverse, combative labour • e.g. sexual harassment, litigation • Is it a risk? BRIC

  13. A Homogeneous Team at the Top Japanese companies ——cohesive and homogeneous leadership Matsushita Electric (now Panasonic)——all Japanese during the 1980s and 1990s In the 68 Japanese firms on the 2009 Global 500, nearly 98% of the listed corporate officers were Japanese. Only exceptions: Nissan and Sony

  14. On the contrary… ●European and U.S. ——diversifying their leadership Example: Carrefour’s success

  15. “…if your company’s international revenues approach 50% of the total, but fewer than 25% of your top leaders come from foreign markets, it’s time to get nervous about your firm’s ability to make the leap from plucky challenger to global leader…” Stewart Black, J. & Morrison, A.J. (2010)

  16. Is it a risk? Many BRIC companies lack leadership diversity.

  17. WHAT TO DO? - Early expatriation - Inpatriation - Education

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