Made in Japan - Book Review


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Biography of Sony's founder Akio

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Made in Japan - Book Review

  1. 1. “Made in Japan”Akio Morita and Sony
  2. 2. Table of ContentsTable of Contents............................................................................................................................2Introduction.....................................................................................................................................3Sections of the book....................................................................................................................3War................................................................................................................................................. 3PEACE............................................................................................................................................ 8SELLING TO THE WORLD..........................................................................................................11ON MANAGEMENT......................................................................................................................13AMERICAN AND JAPANESE STYLES........................................................................................16COMPETITION ............................................................................................................................17TECHNOLOGY.............................................................................................................................18
  3. 3. IntroductionMade in Japan is the autobiography of the late Akio Morita, the Japanese co-founderand former chairman of the Sony corporation. It was written with the assistance of EdwinM. Reingold and Mitsuko Shimomura. The book not only narrates the story of Mr.Morita, but also of the Sony corporations formation in the aftermath of Japans brutaldefeat in World War two, and its subsequent rapid rise to fame and fortune. The bookalso provides insights into Japanese culture and the Japanese way of thinking, particularlytheir business management philosophies and styles. The Japanese behavior is explainedby putting it into a context based on Japans history, recent and ancient.Morita introduces the origins of his family, and how Sony was founded. Chapters picturethe war, early tape recorders, and various conclusions on international markets. Thetransistor was invented in North America in the 1950s, and Sony took advantage of it.The biography gives authentic details about patent issues, business conferences in variouscountries, and the invention of the Walkman.The book is narrated by Mr. Morita in an intensely personal, down to earth,conversational style.Sections of the bookThe book is divided into the following nine sections:1. War2. Peace3. Selling To The World (My learning curve)4. On Management (Its all in the family)5. American and Japanese Styles (The difference)6. Competition (The fuel of Japanese Enterprise)7. Technology (Survival Exercise)8. Japan and The World (Alienation and Alliance)9. World Trade (Averting Crisis)WarThe opening part of the book discusses about WWII and the initial phase of Akio’s life.He was the first son and fifteenth-generation heir to one of Japan’s finest and oldest sake-brewing families. Akio’s father when he took over the family business, it was in ruins buthe was able to pay off the company’s debts and put the factory back in good condition byselling many of the fine art objects that his father and grand father purchased. By the timeAkio was born the family business was in running condition again and the economiccondition of Morita family was an affluent one. Akio’s family was considered to be
  4. 4. amongst the elite class of Japan and their house was located at the finest and expensiveresidential streets of Nagoya. It was customary in Morita family that when the son takesover as family head he abandons his given name and assumes the traditional given name.But, when Akio was born, his father thought the traditional name, Tsunesuke, was tooold-fashioned and hence called on a Japanese scholar of Chinese lore and literature foradvice on naming him and upon his advice, the name Akio was decided.Akio father decided to give him business education starting very early because he was theelder son and was supposed to take over the family business when he was of age. Akio’sfather was very conservative in his approach of conducting business perhaps because ofthe early hardships that he had to face when he had to quit his schooling in order to takeout the business out of the trouble and was very conscious in any decision he took. Akiowas often in confrontation with his father because he thought of his consciousness as ahurdle in the business. Akio was mainly involved in company meetings, stock-checkingand inspection of brewing process. Akio’s father had a habit of using up-to-dateequipments imported from Europe and although the family was to some degreewesternized, the real influence of western culture on Akio came from his uncle Keizo,who came home from Paris after four years and was quite sophisticated and changed theoverall outlook of the family. Because of his mother, Akio had developed liking for thewestern music and used to listen to various records of Victor Red Seal, Feoder Chaliapinand German pianist Wilhelm Kepff. Due to bad quality of the currently availablephonograhs Akio’s father bought them one of the first phonographs equipped with bettersound technology that arrived in Japan. Akio obsession with the new discovery grew andwhen he came to know that a relative of their family who was engineer by profession hadbuilt an electronic phonograph, he went to his house and saw the demonstration. Fromthen onwards, Akio started to buy books about electronics and was intrigued by the ideathat amateurs can build things like phonographs. His obsession with electronic itemswent to such lengths that he almost dropped out of school. His mother was called and toldabout his deteriorating grades. Akio was good in mathematics, physics and chemistry buthe was below average in others and when he started to get bad grades, his parents wouldput his electronic toys away and after conditions improved, things remained the same.He first read about magnetic recording in middle school. NHK, the Japan BroadcastingCompany, imported a German steel-belt recorder which had much better fidelity than theelectric machines like new Victor.At that same time, he came to know about Dr. Kenzo Nagai of Tohoku University hadproduced a wire recorder. Akio was fascinated by the idea and started his work onbuilding a wire recorder for himself. He was novice in this field and year long effortsremained fruitless as books and magazines that Akio used at that time did not talk aboutthe bias current and his own knowledge was primitive. He was disappointed from thefailure but was not discouraged.In the final year of middle school, he decided to take science department examination forthe Eighth Higher School. This decision surprised all and he was reminded that beinggood in science subjects was not the only requirement and he needed to study hard for thesubjects that he had neglected all along. He studied hard for the year and put away hisinterests and hobbies, he had private tutors to help him in English, advancedmathematics, and the Japanese and Chinese Classics.
  5. 5. His hard-work paid off and he became the lowest-ranking graduate of his school to beever admitted to the science department of Eighth Higher School.His notions about science departments changed as the curriculum was full of dull anduninteresting subjects and he was again in danger of failing but in his third year, he wasable to specialize and he chose physics because of his interest in the field.The year was 1940 and the world was involved in WWII and France had surrendered tothe German armies, England was being attacked. As students, Japanese did not thinkabout global or domestics issues but the military men announced a mobilization law in1938, and by the time he started college, Japan dominated the map of Asia. There was amilitary rule in the country and under the threat of being cut off of the raw materials andoil from the US, the country decided to attack US.His favorite teacher in School was Gakujum Hatori, and knowing his interest in the fieldof Physics, he advised him to visit Osaka Imperial University and meet Professor Asada.He was impressed by Professor Asada and when he showed him his laboratory anddecided to join the university. The university became the centre for serious students andexperimenters.His father was disappointed from his decision of going into physics, he wanted him to gointo economics and despite him joining science in college, he wanted him to specialize inAgricultural Chemistry but he did not try to change his mind.When he joined the university, professor Asada’s laboratory was changed into a navalresearch facility. Akio continued to experiment and in order to get more lab time heskipped lectures. Initially, Professor Asada helped him more and more, and after sometime, he started helping him in small jobs.Professor started writing short columns weekly elaborating on the latest developments inresearch and technology which were not secret. Readers used to write to him in order toget his opinion on their scientific ideas. As Akio used to help Professor Asada with hisresearch and when he was busy with his work he used to write the columns.As some of Dr. Asada’s work was research for the Imperial Japanese Army, and Akioused to help him, he came into contact with many Navy officers from the AviationTechnology Center near Yokohama. Akio was nearing graduation and had not beendrafted yet when one day an officer told him that physics graduated could apply for ashort-term commission and become technical officer just by passing examination. Since,the country was at war there was no other option other than going in to forces. Only otherway was to sign up with the navy permanently and continue his studies as navy had aprogram for assigning enlistees to universities.He decided that lifetime service was better idea at that time - nobody knew about thefuture with the war going on. Navy gave him thirty yen a month and a gold-coloredanchor insignia to wear on his collar and was sent back to university to continue hisstudies. This did not continue for long and when the war intensified, he was in his thirdyear and all the physics students were put under direct military control like everyone elsein the country. Akio was assigned to the Office of Aviation Technology at Yokosuka inthe early 1945.His expectations failed when the first morning after his commission, instead of going tolaboratory, he along with others was sent to factory and handed a metal file and assignedto the machine shop. Each day he would file steel parts and after few days, he began tothink that if he was unable to leave that place he would become crazy.
  6. 6. Yoshiko Kamei, who later became his wife, was also assigned from her collegeclassroom to a factory where she made wooden parts for the wings of a training aircraftcalled Red Dragonfly. When the airplane parts factory was bombed, she was assigned toa plant where they made hospital for the wounded soldiers and later she was transferredto a printing shop where military scrip was printed for use in the occupied areas of Asia.After several weeks of the factory, Akio was suddenly and without explanationtransferred to the optics laboratory and he started to feel that he was back where hebelonged. He was the only university student majoring in physics there although therewere officers and workers who were graduates of photography school. He was asked allthe difficult technical problems that they faced. His first major assignment was to try tofind out prevent the damage to aerial photograps caused by the jagged streaks of staticelectricity generated in the dry atmosphere at altitude. He called on famous professor atthe Physics and Chemistry Research Institute in Tokyo, Professor Jiro Tsuji, to get hispermission to use the institute’s research library pretending to come directly from thenavy. He offered him full assistance.He used to go their with his unit each day to do his research. He later asked his superiorsto allow him to research in his university and only asked for the large roll of film becauseit was scarce commodity at that time. Since, the problem was a major one, they allowedhim to continue with the research and he returned to his university where he continued todo his original work and continued to learn Professor Asada.With his graduation from the university, he automatically became a professional navyofficer, and did some actual military training and was shipped off to a Marine Corps baseat Hamamatsu. He went through usual four months program of officer’s indoctrinationand training course.His brother Kazuaki, who was a student of economics at Waseda University, could notqualify for a deferment as only science students were allowed to do so and was givenflight training in twin-engine bombers. When Akio was in Hamamatsu base, his brotherwas tat navy’s Toyohashi Air Base, which was close by. His brother was fortunateenough as by the time he finished his training, the war had ended.His younger brother, Masaaki was in middle school and since the military wasencouraging the youngsters to join, his entire class joined and despite our parents’comprehension about him joining the navy, he still joined it. Again luck favored us andby the time his training ended, war was finished.There were extremists in our country and in 1932, a group of these ultra-nationalists withforty-two young officers, attacked the so-called privileged classes, killing the financeminister and a leading businessman. Akio father was alarmed by these events and then in1936, the famous February 26 incident took place, when another band of army rebelsoccupied the prime minister’s official residence and the war office and assassinatedformer Prime Minister Makoto Saito, who was lord keeper of privy seal.Although, the revolt failed, the upper-class politicians and businessmen were intimidatedby the attacks. The nation was in poor economic condition and the young rebel officerswere managed to arouse the sympathy of may people. From middle thirties onwards,military increased its control over the politics and fascists began to dictate politics.It was December 7 in the United States and it was morning of December 8 in Japan whenAkio heard the announcement about the Japanese forces had attacked Pearl Harbor.Everyone in the house including Akio was shocked because there was preconceived
  7. 7. notion that West was superior in technology and knowing about the American technologythrough movies and products such as cars and phonographs and from his uncle, Akioknew that mistake had been made.But Japanese media gave them a steady stream of good news of Japanese militaryvictories- Japanese forces sank the two British capital ships and took over Philippines andHong Kong, all in the month of December and Akio thought that they were stronger thenwhat he previously thought about the Japanese forces.When his four-month period of military training was over, Akio received the rank oflieutenant and was order back to the optical division at Yokosuka. He was assigned tosupervise a special unit that had evacuated to the countryside to work on thermalguidance weapons and night-vision gunsights. They were based at a big old countryhouse in Zushi, a small town south of Kamakura. His unit was headed by a captain, andthere were other high-ranking officers, plus two or three lieutenants and few ensigns.Akio was assigned to handle details of daily life including providing food for the group.There was a shortage of food in their unit. An ensign struck friendship with fish shopowner from Zushi and they exchanged sake with fish. At the same time Morita familywas making dehydrated soy bean paste for the army and Akio managed to get them fromhis family despite it being unlawful.Mr. Ibuka’s contribution to this group was significant. He had devised a powerfulamplifier at his company, which was being used to detect a submarine thirty metersbelow the surface of the water. Japan was losing control of the air as American forceskept moving closer to Japan’s main islands.As time went on the air raids became more frequent on Tokyo. I thought of hiding at thebottom of the cliff as it would be pretty difficult to be hit by a bomb there. So I calledeveryone to hear what I had in mind. They seemed to like it.In July and August of 1945, there were raids over the Tokyo-Yokohama area almostevery day and night. The alarming thing was that the military would not give up the warno matter how bad it was going. After the atomic bomb was dropped, Akio knew thatJapan was heading for the crisis. Officers decided to visit their family and when it wasAkio’s time, he told his colleagues that by the time he would come back the war might beover. This ignited the feelings in the officers but he calmed them down.His future wife remained in Tokyo with her father and one brother and rest of her familywent to live with their relatives in the countryside. Akio came back to his family on 14thof August and they had a fine dinner. On the next day, Akio was shaken awoke by hismother and told that Emperor would speak to them. Emperor then announced on the radiothat war was over.
  8. 8. PEACEAkio returned to his unit and during these days there were some military attempts toprevent the surrender, one of them happened very close to the station where Akio wasposted, at Atsugi.Many Japanese soldiers were soon on their way home from their bases around Japan andwere beginning to crowd the trains and buses. Some of the Japanese failed to understandthe surrender. Although most of the Japanese army in the field was still unbeaten, therewas string of horrendous losses at Leyte, Iwo Jima, Saipan, and Okinawa and America’ssuperior air power against the home islands and use of Atomic bomb proved that the warcould not be won by the Japanese.In 1945, the Russians stormed into Manchuria – which was considered Japanese coveragainst them. Five hundred thousand Japanese soldiers were taken prisoner and sent tolabor camps in Siberia and other places in the Soviet Union. Some of them remainedslave for as long as twelve years. The end of war was a great relief as well as nationaltragedy to many of Japanese. Whereas, at Akio’s station, there were no orders for themand as a result of which they stayed there with nothing to do. The first order that came tothem was to destroy all their research materials and Akio acted on it with due diligenceeven destroying his personal notebooks and records. Everyone in the country was burningtheir records and there was chaos all over the country as there were speculations abouthow American s would treat them as conquerors. They were also told to destroy theoffice furniture and laboratory equipment and it as thought to be considered valuable.Some of the officers took this property to home and then sold it in the black market. Akiosent the high school students and the young women home first as there were rumors thatnavy officers might be declared war criminals, and civilians might be arrested.At the end of the war, only 10 percent of the city’s streetcars were running. There wereonly sixty buses in running condition and just a handful of automobiles and trucks. Mosthas been converted to run on charcoal and wood when liquid fuels run out. Thetuberculosis rate was somewhere around 22 percent. Hospitals were short of everything.Department stores were empty and only few movie theatres were open.Morita family was fortunate as there was no bodily loss of theirs in the war and most ofthem survived with no serious bombing damage. As Akio was the eldest son, his futurewas discussed by the family as his father was healthy at the time and during the warfactory continued to operate on war work. Akio was only 24 at that time and it wasdecided that he plenty of time to be moved into the company at a later time.Akio received a letter from Professor Hattori, his physics teacher. He asked him to moveto physics department at the Tokyo Institute and join the faculty there. Akio got hisparents’ agreement to take the teaching job, and was able to reestablish his contact againwith Ibuka.Ibuka’s father-in-law was Tamon Maeda, a right-hand man of Prince Fumimaro Konoe.Maeda was later picked as Japan’s first postwar minister of education but later was forcedto resign after six months. Maeda lost his home in Tokyo because of bombing.
  9. 9. Ibuka use to run a company by the name of Nihon Sokuteiki, or Japan MeasuringCompany and its factory employed fifteen hundred people making small mechanicalelements that controlled the frequency of radar devices.Ibuka was satisfied with the countryside. He moved back to Tokyo and started a companyin the bombed out building in the heart of Toky, by the name of TokyoTelecommunications Research Laboratories, with seven employees. His employees didnot want to return to Tokyo as there few places to live there and food was scarce.Ibuka’s resources were scarce and only cash that he received was from sale of voltmetersmade by his old company. This group of people would sit together for weeks and tried tofigure out which business the company was going to target. The only place to get theelectronic items was the black market. Major old companies were beginning to restarttheir operations and were little interested in selling their components to their competitors.The group finally decided to work on a simple rice cooker which was never perfected.This was not what Ibuka had planned before moving into Tokyo. He had an idea ofshortwave receivers which were strictly prohibited during the war. It was not illegalanymore. So, Ibuka designed a shortwave adapter unit consisting of a small wooden boxand a simple radio circuit that required one vacuum tube. This could be attached to anystandard radio and it was converted into shortwave reception. Employees had to searchthe black market and the equipments were very expensive but the product was verypopular and gave the people the confidence.Akio decided to work for this company part-time and teach part-time as Ibuka was havingtrouble meeting his payroll. Ibuka and Maeda, went with me to meet Akio’s father andconvince him of the new venture, as it was considered compulsory for the first son to joinhis family business. When they told him the new venture, my father was reluctant about itas he wanted me to succeed him in the business but at that time my younger brotherKazuaki stepped up and decided to take over the family business.Akio was not happy with teaching and told Professor Hattori that he would not be able tocontinue with the job as there was news that Occupation authorities had decided to purgeall teachers in Japanese schools who were professional army or navy personnel. He askedAkio to continue as there was no news about it. But he was able to leave the job as theuniversity feared that they might be punished on not cleaning the house on their own. Hejoined the Ibuka’s company full time.In August 1946, the Shirokiya department store was about to be renovated and theydecided to move into other quarters for a while, in Kichijoji, finally they settled down in acheap shack on Gotenyama.There was often suggestion of making radios as there was still a strong demand of it inJapan but Ibuka refused on the grounds that major companies were likely to recover veryfast and would make products out their own components and stop the sale to smallcompanies. They knew that the big electric companies were not interested in thereplacement parts business, so they decided to venture into motors and pickups and keptthe company afloat financially.Ibuka wanted to produce a completely new consumer product – not just an upgrade.hewent to Sumitomo Metals Corporation to order special type of wire but the company wasnot interested. Other companies had similar reaction. He made equipments such asmixing units and other studio and broadcasting units for the NHK and when they were
  10. 10. delivered, everyone was surprised with the quality of product seeing the condition of thecompany.Ibuka decided to make tape recorder when he first saw it at NHK. Company’s peoplewere skeptical about the success of the experiment and thought that R&D should not beallocated any money. They did not know about the crucial system of the product, therecording tape. We were able to make it with a lot of hardships and trouble but when wecompleted the product, the worse happened as it was new in Japan nobody wanted to buyit.They then realized that making new and innovative products was not enough to keep thebusiness going. They had a lucky chance when there was shortage of stenographers andwhen we demonstrated our machine for the Japan Supreme Court, the machine started tosell heavily. Smaller units were designed for schools as they had budget for these items.They were using Dr. Kenzo Nagai’s patented high-frequency AC Bias system. They wereable to buy half the ownership of the patent in 1949. When patent was owned, letterswere sent to tape makers throughout the world informing about the patent. He was calledby an officer in GHQ to check the claim about the patent. After checking the paperwork,officer agreed by saying everything seemed complete.They sued Balcom Trading Company for importing tape recorders from US as they hadthe license on the recording system used in the machine. The court fee was quite high todiscourage frivolous lawsuits but they decided to go ahead and won the injunction.Balcom reported this to US manufacturers and they sent their lawyer to settle the matterbut Akio was able to proof that they had the license in US and threatened to go to US anddecision came in their favor in about three years and they were able to get royalty onevery system that used AC Bias system.After this little episode with an US company, Akio and co. were interested in visiting theUnited States and see how the work was being done there, since this country wasconsidered at the top of technology and innovation at that time. When they went to theUS, they were disappointed as almost all of the US companies did not allow them to visitthere factories. The only benefit of the trip was that they came to know to about theinvention of transistors by the Bell Labs. They were immediately impressed and wantedto get the license. They contacted Western Electric who were official licensee of BellLabs and got the license but they were told that it could only be used in hearing aidswhich did not excite them a lot, as they wanted to use it in their small radio concept. Theyalso had to get the approval from the Ministry of International Trade and Industry (MITI)but the matter took a lot of time because of reluctant ministry. Akio himself visitedGermany and Holland to see the progress there and when he saw the pace at whichGermany was advancing, he was impressed. He also visited Phillips in Holland andwanted to see the processes and procedures himself. When they finally got the licensethey decided improve upon the technology and they succeeded where the Bell Labs failedand were able to use the phosphorus doping.After their success in the radio business, they decided to change their name to somewhateasier to use and marketable as their original name was too long. They came up with thename “Sony” after thorough research and deliberation. They registered the name Sony in
  11. 11. one hundred and seventy countries and territories and in various categories in order toavoid any exploitation by others by using the same name. They produced their firsttransistorized radio in 1955 and first tiny “pocketable” transistor radio in 1957. Acompany used their name “Sony” for their chocolate line. They took them to court andthe decision took a lot of time as there were very few trademark or patent registrationlaws but the court decided in their favor using the unfair competition law and decided itwas illegal to use the name “Sony” to be used in chocolate by the other company.SELLING TO THE WORLDAlthough, the company was still not that big but the economic conditions in Japan madethem to look for foreign markets. The profits from these markets intrigued them. Theyalso wanted to change the image of Japanese goods as poor in quality, and cheap. Theirinvention that went by the name of “Tapecorder” became generic overnight and the firmsthat made tape recorders after them used that name. From this experience onwards, theymade a point to display their company name prominently on their products. it was verydifficult in the late fifties in Japan to raise capital and they had to rely on friends andintroductions by friends to people who might become investors. They had a board ofadvisers who had real stature. They also decided to educate their customers about theirproducts as they were new and quite unfamiliar to normal user. They decided to set uptheir own outlets and establish their own ways of getting goods into the market. Theywere beginning to get the reputation of a pioneer. In fact, few people called them the“guinea pig” of the electronics industry. Their competitors took a very cautious wait-and-see attitude while they marketed and developed new product. In their early days, theywere able to market their products for a year or more before the other companies wouldbe convinced that the product was a success. There plan was to lead the public with newproducts rather than ask them what kind of products they wanted. Sometimes a productidea used to strike Akio as natural. Akio did not believe that any amount of marketresearch could have told them the Sony Walkman would be successful, as the public hadnever witnessed any gadget of similar capacity. Ibuka was thinking about industrialcreativity, some that is done with teamwork to create new and worthwhile products. Theystill used the old distribution system where it was useful, but set up new owned outletsand dealt directly with the dears where they could.Akio saw the United States as a natural market; business was booming employment washigh; the people were progressive and eager for new things. He wanted a distributor forhis mini size radio and people at Bulova liked the radio a lot and gave an order ofhundred thousand radios but they wanted to put Bulova name on the radios. Akio askedback at Tokyo. The answer was affirmative but he did not accept the offer. He neverregretted the decision not to take what is called an original equipment maker (OEM)order. We then had a huge order which required us to increase our production capacity,he wanted us to give rates on the order size. I gave him lesser rate for fewer quantity andhigher for larger one. It was a conservative and cautious approach, but Akio wasconvinced that if they took a huge order they should be able to make enough profit on it
  12. 12. to pay for the new facilities during the order. They announced to the world that they hadsucceeded in making the world’s first transistorized television set at the end of 1959.Akio soon commuting between Tokyo and New York because of the work schedule. Theprimary reason for this was they wanted know more than the market statistics and salesdata. In order to get registered with SEC, they had to translate all of their contracts in toEnglish and explain the company on paper in minute detail.They opened a showroom in 1960 in Ginza district of Tokyo where potential customerscan handle and tryout products with no salesman around to try to sell them any product. Itwas a goal to Akio to open a showroom in New York and it took him nearly two years tofind a really suitable place. As he was beginning to spend more time in US he needed hisfamily to be there as there were country club dinners, weekend parties and other socialgatherings. He brought his wife to New York for opening of new showroom in October1962. He then shifted with whole of his family to New York. He sent his two boys tocamp and asked his wife to get American driver’s license. There house became anelectronics lab where the engineers would examine and test competitors’ TV sets. Akio’schildren were learning independence and American style, and it was all very healthy forthem. They saw the difference between American and Japanese culture. There initial planto stay in New York was cut short by the unexpected death of his father. He went back toTokyo to attend the funeral.He was traveling even more during the middle sixties. The company built the first Ampexvideo tape unites for the broadcasting stations; they were huge and cost around onehundred thousand dollars and more. They started to work on bringing the tape size downand succeeded in making it three-quarters of an inch and built a cassette to handle thetape and gave it the name U-Matic and after its introduction in 1969, it has become thestandard all over the world. Ibuka was not satisfied and said that it was still expansive forhome users and was much too big. The company then produced the world’s first all-transistor video tape recorder for home use. In television, color was the thing. Sony had alot of experience with black and while but the color was quite a new story for them. Theystarted to work on color TV’s and finally came out with small color TV sets and they hadno competition making small color TV sets.Their business at home and overseas was booming and they began to make desktopcalculators in 1964 and were thought to be good addition to product line, later specialcalculator was introduced by Sony by the SOBAX. But Akio soon realized that severaldozen Japanese companies had jumped into business of making calculators and it wasbetter to leave this business in order to avoid any price war. In 1964, business was sogood that they to open a new television assembly plant to meet the demand for the colorsets because Japan was hosting the Summer Olympic Games.It was important for Akio to keep traveling abroad through the late sixties and visitingour growing network of production and research facilities in Japan. He had a section atSony called the Outside Liaison Section, which works almost exclusively for Akio. Inthis section, they had specialists in each of the areas Akio was involved in. Akio speciallyenjoyed Europe especially because of the music and the great musicians.The popularity of the Tokyo and New York Sony showrooms convinced him that theyneeded a real permanent presence in Tokyo’s central district. They built a whole buildingfor Sony and had a company owned restaurant in the building which had Korean food.His visits to France were quite frequent and the response to Sony products there urged
  13. 13. him to setup a showroom of the company there. They established Sony Overseas, S.A.(SOSA) year after they founded Sony America. Margaret Thatcher asked me to open afactory in UK and even the Prince of Wales was involved in the promotion. They alsoestablished a German subsidiary and finally open a Sony showroom in Paris in 1971.Akio always eyed having production unit in US as the advantages were numerous withmajor one being that they could easily adapt the designs to market needs in hurry.ON MANAGEMENTThere is nothing secret about the success of the best Japanese companies. The mostimportant mission for a Japanese manager is to develop a healthy relationship with hisemployees, to create a family like feeling within the corporation, a feeling that employeesand managers share the same fate. Those companies that are most successful in Japan arethose that have managed to create a shared sense of fate among all employees, whatAmericans call labor and management, and the share holders. Akio felt that the fate of thebusiness is actually in the hands of the youngest recruit in the staff and it was necessaryto properly train and manage him in order to get the desired results. The idea of employeespending all of his working life with a single company is not a Japanese invention. It was,ironically forced upon them. It was imposed upon them the labor laws instituted by theOccupation, where a lot of liberal, left-wing economic technicians were sent from theUnited States to Japan with the goal of demilitarizing the country and making it ademocracy. One of the first targets was the basic structure of the left over industrialcomplex. The American New Deal Economic and social technicians made it virtuallyimpossible to fire anybody; they enabled – they actually encouraged – labor organizing,which was banished during the war years except for a government sponsored nationwidecompany-type union. With the concept of lifetime employment Japanese managers andemployees both realized that they had much more in common and they need to makesome long-range plans. The laws made it difficult legally, and expensive, to fire anybody,but that didn’t seem like such a bad idea, since workers were badly in need of work, andstruggling businesses needed employees who would remain loyal. Without class disputes,despite the Communist and Socialist party propaganda, the Japanese, who are ahomogeneous people were able to cooperate for their common welfare. In the laborrelations, Sony had a kind of equality that does not exist elsewhere. They look for in ourmanagement ranks, people who can be persuasive, can make people want to cooperatewith them. Management is not dictatorship. Top management of a company has to havethe ability to manage people by leading them. Sony is constantly looking with peoplewith these qualities. All of Sony’s engineers were first assigned to work on theproduction line for a long enough periods for them to understand how productiontechnology fits in with what they are doing. Some of the foreign engineers did not like todo this, but the Japanese engineers seem to welcome the opportunity to get the firsthandexperience In the United States, a foreman can remain foreman all his life but Akiobelieved that it would be better to move people than to leave them on one job too longwhere their minds might get dulled. He used to have dinner with many young lowermanagement employees almost every night and talk until night. They tend to share their
  14. 14. problems and difficulties they were facing at job and He used to help them out andalways maintained a family type atmosphere there. He made a point in knowing hisemployees, to visit every facility of his company, and try to meet and know every singleemployee. This task became more and more difficult as the company grew.A company is still stationary if all the thinking is being done at the management level.Everybody in the company must contribute, and for the lower-level employees theircontribution must be more than just manual labor. They insisted that all of theiremployees contribute their minds. They used to get an average of eight suggestions a yearfrom each of their employees, where most were regarding making their own jobs easieror their work more reliable or a process more efficient. They don’t force suggestions, andthey take them seriously and implement the best ones. In Japan, worker who spend a lotof time together develop an atmosphere of self-motivation, and it is the young employeeswho give the real impetus to this. Management knows that the younger employees candevote their time and effort planning the future of the company. Right after they formedthe American company, they needed a lot of people in a hurry to establish their salesorganization because the business got big very fast. The experience with this massivehiring was that although some were really good but some were so bad that Akio thoughtthey wouldn’t have hired in the first place. Akio also discovered that management in theWestern countries lay off workers when a recession sets in. This is not the case in Japan,or until the company is in its direst state. Although, the system of being unable to fireanybody might seemed dangerous, the Japanese businessmen went through a roughperiod in order to turn the situation to their advantage. The major trouble with Americanstyle of management is that their primary focus is towards profits and they tend to setgoals in order to achieve maximum profits. Akio learnt that the enemy of the innovationcould be the sales force, if it had too much power, because very often these organizationsdiscourage innovation. This is expensive; it means investing sufficient money in R&Dand new facilities and advertising and promotion. And it also means making somepopular and profitable items obsolete, often the items that a company makes the mostprofit on because of the development costs are paid for and these products have becomeeasy for salesman to sell. If the company is nothing but profit-conscious; it cannot see theopportunities ahead. Sony came out with innovative products like portable black andwhite video tape recorder, the U-Matic. The requirement with these types of innovationsis that they require a lot of educating to be done; one has to prepare the groundworkamong the customers before expecting success in the market place. It is time-honoredJapanese gardening technique to prepare a tree for transplantation by slowly and carefullybinding the roots over a period of time, bit by bit, to prepare the tree for the shock of thechange it is about to experience. This process, called “nemawashi” takes time andpatience but it rewards. Akio was often accused of moving too fast and of being impatientbut he was a type of person who apply a kind of sixth sense to people and products thatmight defy logic. Something told him that the market was not yet ripe for a large sale ofvideo portables, and he was right. When Sony was new and small, they could steal peoplefrom other companies and get away withy it, but now that they were so large it was notconsidered the right thing to do, although they still keep on scouting for the talent.A staff of prepared, intelligent and energetic people, the next step is to motivate them tobe creative. For a long time, Japanese were branded as imitators rather than creators.Some people think that the Japanese ability to create the country’s present industrial
  15. 15. establishment is something that they learnt in the four decades since World War II, butthey don’t know their history. Japanese steel makers bought technology for the basicoxygen conversion system from the originating companies in Austria, but within less thana decade Japanese companies were selling improved steel-making technology back tothose same companies. There is a need to clear few myths that still linger about thesubject of Japanese creativity; one aspect of Japanese technological development is itsindependence form the defense technology. It is well known that much of American andEuropean technology is spun off of defense work funded by the government. The majorburden of research is borne by private industry in Japan, which contradicts the notion thatJapanese and government cooperation is the key to Japanese commercial success. Theyhighly educated work force of Japan continues to prove its value in the field of creativeendeavor. In the recovery from the ware, low cost of this educated labor was anadvantage for Japan’s growing low-technology industry. Akio’s solution to the problemof unleashing creativity is always to set up a target. In order to reach one target manypeople become creative. Manager had to determine goals and go for them, encouragingworkers to excel. In fact, the Zero Defects programs of NASA were a great influence onJapan’s quality control programs. The trouble with the Japanese government researchinstitutes is that the government believes that if you have a big laboratory with all thelatest equipment and good funding it will automatically lead to creativity. Managementsof an industrial company must be giving targets to the engineers constantly; that may bethe most important job management has in dealing with its engineers. If the target iswrong, R&D expenses are wasted, so there is a premium on management being right. Ithas been said that creativity of the entrepreneur does not exist in Japan anymore becausethe country has so many giant companies. But venture capital is available now as neverbefore, and so there would be results from new small, innovative companies. As an ideaprogress through the Sony system, the original presenter continues to have theresponsibility of selling his idea to technical, design, production, and marketing staffs andseeing it to its logical conclusions, whether it is an inside process or a new product thatgoes all the way to market. This way the family spirit continues to prevail.
  16. 16. AMERICAN AND JAPANESE STYLESThe major difference between American and Japanese business and management stylesand weakness in the American system is the lawyer. The legal problems have a severeimpact on how business is conducted and worse on how businessmen see their role inAmerica. Even though Japan is not busy creating lawyers, their courts are still jammedwith cases that years to settle, which a function of the small number of lawyers is partly.While the United States was busy creating lawyers, Japanese were creating engineers. Inthe United States businessmen often do not trust their colleagues. If one does trust hiscolleague today, he might be his competitor tomorrow, because people frequently movefrom one company to another. Many Americans seem proud of the adversarialrelationship between government and business, as though their aims are naturallyantagonistic. The American system of management, in Akio’s opinion, also relies toomuch on outsiders to help make business decisions, and this because of the insecurity thatAmerican decision makers feel in their jobs, as compared with most top Japanesecorporate executives. In Japan a person who holds an executive position of trust and whoviolates it is really disgraced, and because of theirs closed-circle society, it would beimpossible for him to continue to do damage to company after company, as one havedone in the U.S. and even in Europe. Generally, in the United States, management’sattitude towards the labor force and even the lower-level executives is very hierarchical,much more so than in Japan, an Oriental country, where Westerners always expect to seesuch hierarchies. Japanese attitudes toward work seem to be critically different fromAmerican attitudes. Japanese people tend to be much better adjusted to the notion ofwork, any kind of work, as honorable. Workers generally are willing to learn new skills.Japan has never devised a system like the America, in which a person is trained to do onething and then refuses to take a job doing anything else. One old style of managementthat is still being practiced by many companies in the United States and by some in Japanis based on the idea that the company that is successful is the one that can produce theconventional product most efficiently at cheaper cost. Japanese labor practices are oftencalled old-fashioned in today’s world, and some say the old work ethic is eroding inJapan as it has elsewhere, but Akio thinks this is inevitable. People need money, but theyalso want to be happy in their work and proud of it. Akio believes that people work forsatisfaction. Sony was one the first Japanese companies to close down their factory forone week in the summer, so that everybody could take off at the same time. In Japanrecruiters are hired and then they to be trained as they are highly educated but irregularlot.There is a feeling in Japan that company must be as much concerned with the workers aswith the shareholders. It is believed that one of the most important things in a company isthe workers’ morale’; if the workers lose their enthusiasm for the company the companymay not survive. The employees view loss of retained earnings as a threat to their jobsecurity. But Japanese feel that a company that sells its assets has no future.The primary function of management is decision-making and that means professionalknowledge of technology and the ability to foresee the future direction or trends oftechnology. Next to lawyers, Akio think that the businessmen are the most overused andmisused people on the scene of United States and Japan. Many Japanese companies
  17. 17. operate on the “proposal” system, in which the middle management is expected to comeup with ideas and concepts to propose to top management for judgment. This of coursediffers from the concept of one-man or small-team management that is common in theWest and especially in America. The concept of consensus is natural to the Japanese, butit does not necessarily mean that every decision comes out of a spontaneous groupimpulse. Japanese encouragement of long-range plans form up-and-coming employee is abig advantage to their system, despite all the meetings and the time spent in discussingand formulating plans. It enables them to create and maintain something that is rare inbusiness in the West. One can be totally rational with a machine but if you work withpeople sometimes logic often has to take a backseat to understanding.COMPETITIONThe glory and the nemesis of Japanese business, the life’s blood of Japan’s industrialengine, is good old-fashioned competition, and sometimes it is severe that even Akio isworried about its export to other countries. The competition in their domestic marketmakes the consumer a king. In Japan these days there are more makers of civilianindustrial products than in any other country on earth, including the United States. Japanhave a free economic system in which anybody can start any kind of legitimate company,so if something turns out to be a great product, people leap in big numbers, and theycompete with each other tooth and nail for the business. Share of market is moreimportant to Japanese companies than immediate profitability. The interest in building forthe future in order to stay competitive became a source of trade friction. Outwitting anopponent in some clever deal is not what the Japanese are interested in. from thebeginning, Ibuka and Akio knew that they were after quality above all. When they wentto the American market, the made sure that they had service personnel trained to handlethe problems that might come up, and they charged high enough prices to support thateffort.The continued vigorous competition they had in Japan had also change they at how theywork. In the past, it was important to produce a large stock of a product at the lowestpossible cost, but now the life cycle of products is getting shorter and the cost higher, andif they built huge inventories they might find themselves with a stock of outdated goods.In the competitive struggle for the biggest share of the market, all sorts of unscrupulousthings can take place, including industrial espionage. They are so careful with theirsecrets that they are constantly reminding their people not to talk about their work in thepublic. At Sony this is the not the case, they are protected from this, by company-run,nonprofit bar called Sony Club.It worries Akio that the idea of business competition seems to have been lost in manyplaces in the non-Communist world. It was a pleasant surprise that China has begun tounderstand the free market system in agriculture and some services and now is allowingsome free market competition. Akio admire Chinese courage and determination. Theyhave learnt a lot about modern industry in a short time, but they have a long way to go.Japanese and European products are now competing on the local markets in China,
  18. 18. though in limited areas. Sony did a lot of business with the Soviet Union in thebroadcasting station equipment. Sony is the largest maker of this equipment in the world.Akio admits that there is another side of the picture which is that excessive competition isat work in their society today. The spirit of competition in Japan even pervades thegovernment ministries. The newspaper competition and the television competition havecaused severe problems. The quality of television programming has deteriorated to lowlevels because of the competition to air the most popular shows. The eagerness for newsand the large numbers of reporters assigned to cover any event, however, causes bigproblems for everybody. Despite some of its dark aspects, competition, in Akio’s opinionis the key to the development of industry and its technology but more effort is needed tofind broader understanding. Competing in a market that they understand, such asJapanese companies sometimes misbehave with their cutthroat tactics. Companies will goafter an increase in share of market by cutting prices to the bone, sometimes to the pointthat there is no chance for anybody to make the profit.TECHNOLOGYJapanese are obsessed with survival. Almost everyday, the earth beneath their feettrembles. They don’t think of themselves as religious people, although they tend tobelieve that God resides in everything. In old days, when Japan was completely isolated,they had to handle any calamity by means of their own resources. The literacy rate beingwhat is, Japanese magazines, books, and newspapers proliferate. Their use of paperextends from religious objects, art, and books to coverings for lamps and windows, towrapping and packaging and decoration of many kinds, and all this makes Japan thesecond biggest producer of paper in the world. As they always had to practiceconservation for survival, Japanese feel that it is more sensible and economical to heat abody with foot-warming brazier or electric heater than using all the energy it takes to heatan entire room. The ability of Japanese to work together came to Japan’s aid at the timeof oil crises. In, every maker of home appliances went to work to cut power consumption,and in fact they competed with each other to see who could produce products using theleast power; low power consumption became a major selling point and a new point ofcompetition. Because of the crisis, they became efficient. Using the latest technologies,they designed lighting that consumed less power and more efficient generators. Akioleant that the attitude in America is much more easygoing as far as raw materials areconcerned than in Japan. Japanese people also seem naturally more concerned aboutprecision. It might have to do something with meticulousness with which they must havelearnt to write the complicated characters of the Japanese language. Akio does notdiscredit the foreign worker. Sometimes one has to use different approach where peopleaccustomed to different approaches. Japanese are always been eager develop their owntechnology, absorb aspects of technology from abroad, and blend them to make suitableobjects or systems.Perhaps it is because of their need for the means of survival that Japanese science tends toconcentrate more on the applied than on the theoretical. One of strengths at Sony was thatthey do not structure the company so rigidly that the NIH Not Invented Here syndrome
  19. 19. applies. World is headed in the direction of new communications systems in the ninetiesand beyond.Akio is trying to make a point that it is unwise merely to do something different and thenrest on one’s laurels. One has to make business out of a new development. The challengefor all companies is the management of the technologies, new developments, and newproduct.JAPAN AND THE WORLDRelations between modern Japan and the rest of the world have often been on the rockyside, and now U.S. and European community are locked in a cycle of recurring trade withJapan. Americans and Europeans seem to think that their idea of how the world tradingand monetary systems work and should continue to work should be universal, especiallyin the business world, and that since they believe they invented the game rules shouldnever be amended. They system up to now, they believe, has served them well and thereis no need to change. They saw Japanese as newcomers; novices who should still learnform the masters. In today’s fast-moving and interdependent world, everyone has to lookfor ways to get to know each other better; they need to talk and exchange views. Contraryto the general view, there are thousands of American and European companies doingbusiness in Japan not the other way around only. It appears that if foreign companieshave problems competing with Japanese companies, it is often a failure of that industry asit is success of Japanese industry. While Americans seem willing to ignore the arrival of anew era, the French have punitive approach to it. Akio admires their shrewdness and witwhen they decided they would slow the shipment of Japanese video cassettes recordersinto the country in, they made the port of entry for VCRs. They required the agents toexamine each set very carefully before approving it, and there were only nine agents thusslowing down the number of Japanese sets in their country. Japan has still someconfusing and complicated barriers to trade, but Japan is the only major industrializedcountry that actively moving to open its markets, step by step, always forward, neverbackward.By then the trade problems between Japan and the United States were a central topic ofconversation. In fact, many nasty things were being said about Japan in the United Statesbecause of the bilateral trade imbalance between the two. Akio thought that it was onlynatural when something goes wrong to blame someone else, seldom at home. WhileJapanese are moving into the new era, the Americans were clinging on to the traditionalstuff. While many Americans seem willing to ignore the arrival of new era, the Frenchhave punitive approach to it. Akio admired their shrewdness and with when they decidedto slow the shipment of Japanese video cassette recorders. At the time, the French andother European makers had been bringing OEM sets into Europe, but they were slow todevelop their own. Japan had some confusing and complicated barriers to entry but still itis the only major industrialized country that is actively opening their markets. The mainthing to understand here is that if one tries to avoid or soften competition by politicalintervention, the whole concept of free trade and free system is negated.
  20. 20. Japan has been opening up at increasing pace in the mid-eighties when new protectionisttalk is echoing all around Europe and the United States. The opening of Japanese marketscame at a time when the business community was pressing very hard for it with thegovernment and bureaucracy. It is difficult for the bureaucracy to give anything thesystem resists the change. In Japan bureaucracy is institutionalized which is verypowerful, a policy one established is followed no matter how many changes are in thepolitical scene. The stand of the Japanese government in its economic relationship withthe world is that openness of its market is the rule and restrictions against imports areinvoked only as a rate exception to the rule.Japanese are still the inheritors of an agrarian cultural tradition and philosophy, which areinfluenced by the nature and the change of the seasons. Perhaps because of this they arenot hasty people. They have a proverb that everything changes in seventy days, whichcounsels us not to be hasty, not middle ground between the two approaches, the toohurried and the too slow.WORLD TRADEShortsighted statesmen and businessmen around the world see their problems in bilateralterms. Akio believed that the main problem is with their money. In order to haveeconomic activity in a free and open economic system, one has to have buying andselling at appropriate prices. The prices will be affected by supply and demand, of course.That’s the simple basis of the free economic system. As an industrialist Akio knows thatcompetitiveness has to be balanced and the exchange rate acts as the balancingmechanism. He thought that the floating system would, by international agreement, bemonitored, and that rates would not be allowed to fluctuate artificially. In this situationthe prices of goods become a matter virtually out of control if rates are not monitored.For industrialists money is the scale. It is use to measure the economic activity of thecompanies, assets, inventories, and even the result of human effort. It worries Akio thatsome industrialists have begun to take part in the money trading game. The industrialistswho cannot invest in their own companies are investing a lot of energy, time and moneyin acquisitions and mergers. European nations appreciate scientists. Many of the greatAmerican scientists have their roots in Europe. As concerned as Akio as about the trendtowards the expansion of trade in currencies at the expense of the expansion of the tradein goods, this lack of interest is keeping up with the need for changing technologies andproduction of new kinds goods concern him. European countries trade with each othermaintains fixed exchange rates that are periodically adjusted. But most of the Americans,believe that since America has the least restrictions on trade they should be setting all thestandards that should be followed.Sony has struggled hard to expand their business and do business in countries adhering totheir laws and regulations. The move in European markets were not easy as the Germanconsumers did not accept any Japanese products easily and it took time to get theiracceptance of Japanese equipment and same was the case with England. It is never easyfor a firm like Sony to accomplish what they have accomplished.
  21. 21. He believes that there is bright future ahead and future holds exciting technologicaladvances. His vision of future is of an exciting world of superior goods and products. Thechallenge is great; the success only depends upon the strength of their will.REVIEWAlthough it can also be read as a history of Sony Corporation, Made in Japan isessentially an autobiography of its co-founder Akio Morita. It gives an account ofMoritas upbringing in a wealthy family, the war years of Japan, the birth of TokyoTelecommunications Engineering Corporation (later renamed Sony Corporation) withMasaru Ibuka, and Sonys subsequent rise to international prominence as electronicsGiant.As it talks about Sony Corporation, it gives an impression about the entire nation. Thebook skillfully weaves the topics dealing with Japanese History, Politics, Culture,International relations and speaks volumes about Japans business relations mainly withAmerica and aggressive Japanese business expansionism. It most importantly gives acomplete picture of the determination, innovation and passion of the Japanese in the postwar period, in lucid narration and language flow.In the first half of the book, elements of autobiography and company history areintermingled. Technological changes and innumerable trips abroad to further the business(Sony was the first Japanese firm to license the transistor patents from Western Electric)receive equal time with anecdotes of family and friends. The second half of the bookconsists of informal essays on topics such as personnel management; the differingcorporate styles of East and West; the importance of competition; and Japans role inworld trade. Despite the difficulties which he foresees, Morita remains eternallyoptimistic about the future.The success of SONY was due to innovation and Moritas success was due to ambitionand grabbing on to opportunities. Management is all about case by case. If there are toomany rules, they do not lead anywhere. Morita dared to think differently that is what thebook says. Most books on management are dry, too technical and lengthy with highsounding ideas and that is where Made in Japan is different. It gives its readers somethingto think about but does not do any thinking for them, at least not too much.The main reason for Sonys success was the application of technology and basic science,business innovation and pragmatic management practices which is true about manyJapanese firms. There is the example of how they licensed the radio technology inWalkman and got the licensing rights for a song, when no one in America or Europethought it to be a viable and marketable technology. Moritas creativity and innovative
  22. 22. ideas gave birth to totally new lifestyles and cultures which is evident from the fact thattoday the Walkman is referred to as a noun, Sony as a synonym of top quality inelectronics and Made in Japan as a brand in itself.The book, however does not give as much information about Sony Corporation as anorganization. Chapters are divided dexterously, each focusing on specific aspects andgiving information yet falling in the flow that holds the reader. Indigenous Japaneselanguage words have been appropriately expressed using italicization (manyoushu,zaibatsu, asahi shimbun etc.), partial translation (tatami mat; noh theatre etc.) andcomplete replacement of words instead of notes (Education mothers-KYOUIKU MAMA;Living National Treasure-NINGEN KOKUHOU etc.) which prove its credibility as awell translated work. Also, Japanese language words (Akio, Showa p.9; manabu, manebup.178) have been explained well to the understanding of the reader so as to transmit thelogic behind their use. However, it is important to state here that the concept of frugalityrelated to mottainai (p.252), that Morita describes as a quintessential value of post warJapanese psyche, does not really hold true in todays Japan. Although recycling is at itshigh in Japan, it continues to be one of the largest garbage generating nations. Also, theattitude towards employment has taken a drastic shift in todays Japan.Morita probably attempts to do a PR for, or recommend his (Never mind school records;p.121) and his wifes books (My thoughts on home entertaining; p. 115) and also A bookof Five rings (p.228) by cleverly mentioning them in the flow. The inclusion ofphotographs in the pages between p.168 and p.169 makes it an interesting documentarythough.Minor annoyances are the way in which Morita glosses over his involvement in theJapanese military, and the relatively small amount of time and space he gives to Sony co-founder Masaru Ibuka in his narratives. Also, he speaks of his background sometimes tothe extent of exaggerating his familys status. The tone throughout is tinged withhumility, although to be fair it is probably difficult for an individual as successful asMorita to appear as anything else. The books two coauthors (TIME magazines Tokyobureau chief and a Japanese journalist) have done a good job of making this a readablebook while allowing the authors personality and enthusiasm to shine through.