Japan Panel '05

[from left to right, bottom row] Suga Tomohito (Global MBA), Hisanaga Satoru (MBA), Sato Mitsuaki (MBA), Wu Jeffrey (MBA), Campbell John (Professor Poli. Sci.), Tragge-Lakra Cynthia (GE), Iqball Arif (Delphi), Noda Yosuke (Global MBA), Kurita Shintaro (MBA), Nittono Masahiko (MBA), Keys Aaron (BBA)

“Ah, I see the light! Do you?” An arguably Christo-religious phrase was the title of this year’s Japan Panel. Putting this notion aside, it does adequately reflect the current state of the Japanese economy. Japan maintains the 2nd highest GNP and has started to exhibit growth after years of stagnation; however deflation, an aging population, and a weak U.S. dollar raise questions as to exactly how far off the light at the end of the tunnel of healthy recovery really is.

Speaking to these points and the role that their respective organizations play in Japan, Arif Iqball, Asia Pacific Regional Planning Director for Delphi Corporation, and Cynthia Tragge-Lakra, Global Director of Commercial Leadership & Development for GE Corporation, formed the basis of an impressive panel led by John Campbell, Professor of Political Science. Both Arif and Cynthia are graduates of Michigan’s East Asia business MA/MBA program and are former pupils of Professor Campbell. The familiarity of the panelists, when combined with the pride felt on the part of Professor Campbell, created an atmosphere that complimented the spirit of the panel.

Arif emphasized that globalization has increased the need for platforms exhibiting worldwide applicability in order that economies of scale may be fully realized. In Asia, he recognized, Japan – Tokyo – as an essential hub to long-term sustainable growth in Pacific Asia, equating this with winning the top Japanese OEMs. This proposition gave rise to a theme common between both panelists’ presentations: “think globally, act locally.” For Delphi, developing long-term relationships with its Japanese customers means that they must prove their commitment to sell in Japan and deliver globally. The Japanese keiretsu (groupings of business relationships unified as much by tradition as by financial holdings) form imposing barriers for an outside supplier like Delphi. However, Delphi is able to leverage its global presence, which is a valuable asset when compared with other suppliers like Nippon Denso who has recently shortened its name to Denso (Nippon means Japan), showing that major Japanese firms recognize this disadvantage.

Similarly, Cynthia also attributed GE’s long-term commitment in Japan to their success. While GE has built its presence in Japan primarily through acquisitions (all eleven of its business units are represented), GE focuses on creating growth as a process to drive organic growth in perpetuity. As Cynthia describes it, a vital component of this strategy is to be close with the customer. The challenge, however, has been for GE to get out of its own way so that Japanese practices, such as focusing on the customer, can be leveraged and a unified face can be presented to the customer. Cynthia also made it clear that even though GE aggressively changes the culture of its acquisitions, it is mostly financial rigor and the customer is not disrupted. However, she adds, the risk is that GE will go too far and that sometimes great people who cannot handle the change may be lost.

There were many humorous moments between the panelists and the audience. A few of the chief differences between doing business in Japan and America:
 In Japan, there are many golf games before contracts are made; in America, there are many contracts before even one golf game.
 Feedback is never an issue when managing an American workforce: Americans will talk. Whereas even if Japanese will talk, you can never be sure if it is only the tip of the ice-berg. This is why the act of going out drinking becomes a feedback session: under the pretense of getting drunk, honest discussion takes place.
 An insightful question was raised to Cynthia, Q:“why does ‘GE’ always come first? As in ‘GE Yokogawa’” A: “Alphabetical order.”

Though smaller than last year’s Japan panel, the 15th of its line did not disappoint. The Michigan Room was full and the audience was actively engaged during the Q&A sessions. If the reader will beg pardon, I’d like to give a shout-out to my boys: Tomo, Hissa, Mitsuaki, Jeffrey, Yosuke, Shintaro, and Masa you put on one hell of a show.