View from Tokyo: Slow shift in power gathers pace

ONE OF the enduring mysteries of Japan - for foreigners and Japanese alike - is who actually holds power in the country's political and business structures.

Formally, Japanese politics is run along democratic lines with elections, and Japanese companies hold regular shareholders' meetings. But in practice the colossi of the ruling Liberal Democratic Party and the larger Japanese corporations seem to run on their own steam, with little accountability to voters or shareholders. When something goes wrong, blame rarely comes to rest on an individual, but gets chopped up into ever smaller pieces until it disappears in the fuzzy concept of collective responsibility.

Slowly, however, this is changing - at least in Japan's business world, which is being forced to be more responsive to outside pressures. In the last two months, the top executives of Japan's two largest car companies and its largest trading company have been replaced. In each case the new man (there are still precious few women in top management in Japan) will be expected to take on a higher profile than his predecessor to help the company adapt to new challenges.

But the most forceful, and uncharacteristically dramatic, example of an individual executive taking responsibility came last week, when Sankei Shimbun, a national daily newspaper, summarily fired its chairman on the grounds of incompetence.

Hiroaki Shikanai had been chairman of Sankei, the fifth-largest daily in Japan with a circulation of more than 2 million, since 1989. He had basically inherited the position by virtue of being the son-in-law of the late Nobutaka Shikanai, who had headed the Fuji-Sankei television, radio and newspaper conglomerate.

Mr Shikanai junior had made himself unpopular with the staff of Sankei for interfering in personnel decisions and promoting personal favourites within the paper. He had also reportedly tried to get the company to award a huge posthumous retirement allowance to his former father-in-law - which he himself would have pocketed as heir to Mr Shikanai senior's assets. But what was most unusual about his dismissal was the forthright language used by the company's president, Shigeaki Hazama.

'It is inexcusable for anyone to use a corporation as if it were his own personal property,' said Mr Hazama. 'A newspaperman is presumed to behave with special responsibility to society. In this connection, Shikanai lacks the qualifications to represent a newspaper.'

Incompetence among management is as common in Japan as anywhere else. But because of the cultural aversion to confrontation and the supreme value placed on preserving face, open criticism of another individual is rarely voiced. With Japan's economic slow-down and a consequent drop in advertising hurting newspaper revenues, it appears tempers just snapped in the Sankei boardroom.

The other top level changes - at Toyota, Nissan and Mitsubishi - have been announced without the rancour or accusations of incompetence at Sankei. But they are all significant in their own way.

This week Toyota Motor Corporation, Japan's biggest car manufacturer, said Tatsuro Toyoda, 63, was to take over as company president from his 67-year-old brother, Shoichiro, who has held the position for 10 years. The younger Toyoda, who has an MBA from New York University, is expected to bring a greater international awareness to the job. Since 1988 he has had special responsibility for managing Toyota's international operations, and for four years before that he was in charge of its joint venture with General Motors in the US. Toyota is acutely aware of international pressures to restrict Japanese car exports. It is expanding local production in the US and will open its first plant in the UK later this year.

Although the three top positions in Toyota are now occupied by members of the Toyoda family - Shoichiro is to become chairman and the brothers' 79-year- old uncle Eiji is to be made honorary chairman - Tatsuro Toyoda also signalled that the family's hold on the company was coming to an end. He said the current leadership was 'the last generation' after which the family would be exhausted, and the next president was likely to be an outsider.

International experience was also a major factor in the appointment of Mitsubishi Corporation's new president, Minoru Makihara. Mr Makihara, known to many of his friends as 'Ben', has spent 22 of his 36 years in Mitsubishi working overseas. He has a degree from Harvard, speaks fluent English, and has lived in London, New York, Washington and Seattle. Usually, so much time spent away from Tokyo head office would automatically disqualify a Japanese businessman from any hopes of a top executive position.

But with Mitsubishi and its affiliates' businesses now stretched over five continents and becoming increasingly diverse and difficult to manage from Japan, Mr Makihara has been chosen to help the company become a true multinational. Mitsubishi's extensive network includes Mitsubishi Heavy Industries, Mitsubishi Motors, Mitsubishi Bank, Tokio Marine and Fire insurance company, Nikon cameras and Kirin brewery.

Mr Makihara says one of his priorities is to devolve more responsibility to overseas offices of Mitsubishi. While in the US as head of Mitsubishi International from 1987 to 1990 he also supervised the company's acquisition of several manufacturing companies - a relatively new departure for Mitsubishi's overseas operations, which used to deal almost exclusively in trade.

By contrast, Nissan is becoming more inward-looking, as it faces continuing problems to reduce costs and increase productivity to keep within shouting distance of its larger rival, Toyota. Nissan, whose operating profits were down by more than 70 per cent last year and whose portion of the domestic market has sagged from 30 to 23 per cent, is badly in need of renewal. The company has decided this must come at the shop-floor level.

Last month it announced that Yoshifumi Tsuji was taking over as president from Yutaka Kume, who had been in the position for seven years. Mr Kume was widely credited with solving Nissan's problems of shoddy design and lack of appeal, but with the overall Japanese car market shrinking Nissan has shifted its attention to cutting costs.

Mr Tsuji is a shop-floor man. He trained as an engineer and has spent most of his time with the company working on the production side. His job will be to oversee an improvement in the efficiency of Nissan's workforce - analysts say labour accounts for 8 per cent of the company's operating costs compared with 5 per cent for Toyota.

Exposed as never before to international pressures and competition, just as Japan's domestic economy has hit a downturn, companies are starting to shake themselves up. Now if the same could be said for Japanese politics . . . .

(Photograph omitted)