Immediately following World War II, the quality of products produced by Japanese companies was not good enough to compete in the international marketplace. The only advantage Japanese companies had was price. Japanese goods, as a rule, were cheap. For this reason, Western manufacturers, particularly those in the United States, saw the Japanese threat as being rooted in cost rather than quality.

Reading the future more accurately, albeit belatedly, Japanese companies saw quality as the key to success and, in 1950, began doing something about it. While Japanese companies were slowly but patiently and persistently creating a quality-based infrastructure (people, processes, and facilities), American companies were still focusing on cost, shifting the manufacture of labor-intensive products offshore and, at the same time, neglecting infrastructure improvements.

By the mid-1970s, the quality of Japanese manufactured goods in such key areas as automobiles and consumer electronics products was better than that of competing American firms. As a result, Japanese exports increased exponentially, while those of Western countries experienced corresponding decreases. 16 This explains how Japan rose up out of the ashes of World War II to become a world-leading industrial nation. But the story does not end there. After losing market share to the Japanese for more than two decades, companies in the United States began to embrace the principles of quality management.

As a result, by the mid-1990s companies in the United States had reasserted themselves in the global marketplace. Now, the two countries are like well-matched heavyweight boxers who slug it out every day in the world of global business. On any given day, either can win the global business battle. There are no longer any automatic winners. Regardless of whether they are Japanese or American, those companies that adhere to the principles of quality management and continually improve are the ones that will win in today’s marketplace.

QUESTION

Why do you think that companies in the United States were slow to adopt the quality management principles Japanese companies had used to gain market share worldwide?