Introduction
The spectacular growth of economics in East Asia over few decades, it has left many people wondering the reason behind the hyper growth phenomenon. Such example of countries experiencing such hyper growth is Hong Kong, Korea, Singapore, Japan and China. In this essay China and Japan will be selected as representative in comparing and contrast of both business system as they are one of the largest economic bodies in the world and they both have rich history in business system development. Additionally, the essay will include analysis on factors that cause the differences of 2 business systems which include, business cultural communication, management styles and the formation of economic institution in both countries and last but not least examine the similarities of both business system which include the roles of the government and shared similar values systems.
Before we are able to distinguish business systems of both China and Japan, we must first understand the concept of what is business system? . Business system refers to the process or method of organizing economical activities in different institutional environment to achieve a particular objective. In other words business system can varies widely from country to country due to political and historical background of the country. For example, both countries would a have different business system as Japan development was affected by world war 2 economic policies ( Zaibatsu and Keiretsu) while China business system is under the influence of MAO communist era. (State Own Enterprise) and Confucius teachings. Although the much differences, both government of Japan and China did play a similar imperative role of helping growth and development of local firms and...
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...e privatized with this reform it will enable firms to have more autonomy in decision making thus eliminating political issues in decision. Most importantly the China government have introduce various economic policies such as management responsibility system , contract system, and shareholding system. With all the reform policies in place, china is gradually eliminating the problems they have before and at the same time increasing efficiency .
However with comparisons to the Japanese business system of high integration and constant improving, China still lacks behind Japan in innovation and technological advancement , as most of the Chinese enterprise still tend to be labor and capital intensive.
Foreign Direct Investments
As mention in the previous paragraph, due to China opening up their market foreign direct investment have boost the economic growth of china
They also developed a Western style judiciary system. Japan and China reacted differently to the reforms of Imperialism. When put under pressure, Japan succumbed to the power of Western Imperialist ideas. Conversely, China, resisted for a long time. As a result, Japan had more technology, while China was unenlightened of the new advances.
From 1500 to 1800, China and Japan tried to politically and economically established their countries in very different ways. Japan fought war after war for a century before they changed their ways. China on the other hand slowly established a government and used education as a tool to be politically and economically strong. Japan would later do the same.
In the middle of the 19th century, despite a few similarities between the initial responses of China and Japan to the West, they later diverged; which ultimately affected and influenced the modernizing development of both countries. At first, both of the Asian nations rejected the ideas which the West had brought upon them, and therefore went through a time period of self-imposed isolation. However, the demands that were soon set by Western imperialism forced them, though in different ways, to reconsider. And, by the end of the 19th century both China and Japan had introduced ‘westernizing’ reforms. China’s aim was to use modern means to retain and preserve their traditional Confucian culture. Whereas Japan, on the other hand, began to successfully mimic Western technology as it pursued modernization, and thus underwent an astounding social upheaval. Hence, by the year 1920, Japan was recognized as one of the world’s superpowers, whereas China was on the edge of anarchy.
Historically, successful civilizations have tended to have constant economic growth. The civilization of China was not successful in the nineteenth century because it had a declining economy, while the civilization of Japan was successful in the same time period because it had a economic growth. As a result China was unable to focus on other key areas such as medical and technological advancements, native culture, and military conquests. Japan’s growing economy enabled it to innovate, grow their culture, and attain military power, all of which are measures of success. China was unable to grow socially and politically because they did not have economic growth.
The German and Chinese business hierarchies don’t only affect the way businesses are run but also affects what kind of products each country is able to specialize in. The lack of empowerment and innovation within the Chinese business structure makes it very hard for them to come up with new products and processes. However, having an obedient workforce allows them to excel at creating low cost, less complex, mass market products. The Germans focus on efficiency and technical knowledge helps them to successfully produce more complex products, but are seldom the first to market due to their low innovation and empowerment.
China and Japan have both practiced a policy of isolation for an extensive length of time leading to economic and cultural growth. However, the practice of a strict isolation policy that eliminates both western ideas and technology ultimately results in a loss of independence to foreign powers.
During the 19th Century, China and Japan each responded differently to western penetration. China was against industrializing and did not want to create an empire like those of the western empires. Japan however learned that if they wanted to survive they had to adopt the changes that the western empires were adopting. Japan began to create an industrialized society and soon became one of the major industrial powers. China went through many rebellions and finally decided to industrialize just enough to be able to fight off the western empires. However, they did not industrialize fast enough or big enough, and they could not defeat the west. Although they responded differently, both China and Japan were affected by western penetration economically,
Foreign direct investment has played a vital role in the transformation of the Chinese economy in China, with value contracted increasing from US$ 52.1 billion (1998) to US$ 115.1 billion (2003).
... Imperialism. Their responses and actions to western imperialism would set a foundation for their future destiny in a world that was rapidly changing and moving forward, and leaving the traditional world behind. Both countries shared the fear of foreign influence, China continued to go against foreign influence and ultimately got taken over by western powers after being involved in four wars. On the other hand, Japan was more open to foreign influences and used it to their advantage. As a result, Japan had more technology, gained better understanding in political and moral ideas of western civilization. On the other hand China was against the new advances and couldn’t grow their nation as quick Japan did and was ultimately left behind. During this time of progressive change, one nation seized the opportunity to change and adapt quick enough while the other didn’t.
China and India both have ponderous bureaucracy systems created by history and tradition. Since the opening of China’s market to foreign investors in 1978 and India in 1991, they have been gradually moving from centrally planned economic system towards decentralisation. However, besides their continuous movements in order to provide businesses a better environment, significant problems still exist.
During the 1990s, Japan has been exposed to one of the most difficult structural transition periods in its post-war history, in terms of social and economic conditions. There have been two major changes: one is a substantial decline in economic growth in real terms, and the other is a changing social structure characterized by the declining birth rate and the ageing population. Under the pressure of changes in the economic environment caused by globalization and innovations in information technology, Japanese business corporations are forced to adapt to the new situation. While companies faced with fierce international competition, it became more critical to understand the basic knowledge of complicated legal, cultural, economic, and social issues. Engaging in international trade also requires attention to international regulations, international business planning, international market research, funding, distribution and other areas that must be considered separately from domestic business issues. The paper suggests some of the basic tools that can apply to solve the problem or to bring the business opportunity to fruition in today's Japanese business environment
And as China transforms its economy into a ‘socialist market economy’ it is held that the attendant social, economic, and political transformations necessitate that its state controlled IRs system is decentralized and more so, it should be converge with international best practice IR standards (Zhu, Warner, & Feng, 2011). Although the Chinese government has endeavored to reform its labor market, the “deep-rooted national culture and its long history of centralized state power” as exhibited by the tenets of the all-powerful All-China Federation of Trade Unions1925 (ACFTU), has meant that any initiated IRs reform should be “with Chinese Characteristics” (p.128). It is important to note in the 1980/90s most countries in the Western hemisphere and Asia restructured their IRs systems. This episode can be attributed to factors specific to these countries; but owing to the fact that most of Asia’s economies are linked to the global economy, it is posited that this process may not have been coincidental but it was occasioned by competitive pressures in the global labor market (Kuruvilla & Erickson,
When the new Chinese Government was set up in 1949, the new government faced a lot of problems. First on their agenda was how to re-build the country. As Communist Party of China (CPC) is a socialist party, their policies at the time were similar to that of the Soviet Union’s. Consequently, the CPC used a centrally planned strategy as its economic strategy when it first began. For a long time, the Chinese economy was a centrally planned economy in which none other than the state owned all companies. In fact, there were absolutely no entrepreneurs. As time went on, the problems of a centrally planned economy started to appear, such as low productivity, which was the key reason for restricting the development of China. With the population growing, the limitations of the centrally planned economy were clear. In 1978 China started its economic reform whose goal was to generate sufficient surplus value to finance the modernization of the Chinese economy. In the beginning, in the late 1970s and early 19...
...st and stand in the world. It is predicted that China will one day be the largest economy growing country in world. They continually growing and rebalancing their world to be the best. The growth of economy will depend on the Chinese government comprehensive economic reforms that more quickly accelerate in China transition to a free market economy. The consumer demand, rather than exporting the main engine of economic growth; boost productivity and innovation; address growing income disparities; and enhance environmental. (Morrison, 2014,para2)
China and Russia's approach to change are vastly different, almost like night and day. China's political and economic policy has always been to do things gradually. Whereas Russia believed in going through the necessary changes quickly, so that the hardship would in turn pass just as quickly. In the implementation of their policies, we have seen that China's approach has led to a 29% of growth in their industrial field. But in comparison, Russia only yielded 15% with their approach. But one must keep in mind that China has more industrial sectors than does Russia, so their job in improving industry is notably easier than Russia's feat in developing an industry.