Government-Business Relations Since the End Essay

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(Reich, 2009)

The Japanese Government to Business Model

The Japanese government has more direct control of private business. The difference is that it is doing so, as a partner to ensure that the business is able to maintain successful long-term economic growth. The government does not offer subsidies or any kind of bail outs. Instead, they help companies through loans, tax breaks and other forms of assistance. This helped to contribute to the success of the Japanese auto industry by allowing executives to focus on how their organization can grow in the future. (Johnson, 1985)

Business, government and the Liberal Democratic Party in Japan

The Liberal Democratic Party helped to liberalize the relationship that the government would have with the auto industry. As it would be successful in helping Japan to eliminate protectionism; this is something that would allow Japanese cars to become more competitive in markets around the world. (Johnson, 1985) at which point, many of the large auto makers were able to build their own factories in key markets such as North America. This is significant because this liberalized policy would spread to the auto industry, as they were able to lower trade barriers and costs by producing cars in these markets.

Automobile Industry of Japan

The auto industry of Japan is known for building high quality cars and trucks that are competitively priced. This is because the industry was forced to rebuild after World War II, part of the process of rebuilding was to improve the overall quality of automobiles that were being produced. Over the course of time, the Japanese became known as experts on quality and efficiency. ("Japanese Auto Industry," 2010)

Japanese Environmental Regulations

The Japanese government is concerned about working in line with the different provisions of the Kyoto Protocol. This is because they are struggling to cut the overall amount of green houses gases that are being released into the atmosphere. The obvious concerns that the government has are different than in the U.S. because such provisions do not apply. This means that there was less emphasis on forcing automobile manufacturers to increase fuel economy standards in the United States. ("G8's Gradual Move," 2008)

Steps Japanese Automakers are Using to Address Environmental Issues

The Japanese automakers have been designing automobiles that are at the cutting edge of performance and fuel economy standards. Where, the industry has been aggressively developing mainstream hybrid cars and has been designing other cars that do not rely on the gasoline powered engine. ("Japanese Auto Industry," n.d.)

Effects of the Stimulus

The effects of the stimulus package have been disappointing. This is because it was assumed that the effect of encouraging consumers to purchase eco friendly cars would increase sales. Instead, the reaction has been muted and when the stimulus wears off later this year, there are concerns that this could cause further pain. The reason why eco friendly cars were targeted; was to help reduce the number of cars that are polluting large amounts of carbon, as the country is having trouble maintaining the Kyoto caps. (Schmidt, 2010)

Benefits of the Japanese Government Business Model

The benefit of the Japanese government to business model is that it allows businesses the ability to focus on the long-term objectives. This is because the government does not try to dictate what businesses must do, instead it encourages them. Over the course of time, this allows executives to see beyond the short-term, as this encouragement becomes a part of their long-term thinking on building for the future. At which point, designs and models are developed that could be used to benefit the company down the road. (Johnson, 1985)

The Drawbacks of the Japanese Model

The biggest drawback of the Japanese model is that it allows failing businesses to remain open, when they should be forced into bankruptcy. This is because the government believes that if they work with the business, it can be able to fix it various financial problems. This is troubling because in order for some businesses to become stronger, they must be forced into bankruptcy, where they are allowed to reorganize. ("Japanese Auto Industry," n.d.)

Clearly, the Japanese model is superior to the American model because it allows the industry to adapt quicker to changes that are taking place. In the area of fuel efficiency standards, this has allowed the different manufacturers to develop cars and trucks that are the most advanced in the world. Combine this with their ability to manufacture and sell cars across the globe, makes this the best model for the auto industry.


Automobile Industry Introduction. (2010). Retrieved May 6, 2010, from Plunkett Research website:

CAFE Overview. (2010). Retrieved May 6, 2010, from NHTSA website:

Federal Motor Vehicle Safety Guidelines. (n.d.). Retrieved May 6, 2010 from NHTSA website:

G8's Gradual Move. (2008, January 25). Retrieved May 6, 2010, Council of Foreign Relations website:

Japanese Auto Industry. (n.d.). Retrieved May 6, 2010, from Economy Watch website:

Obama Issues Memorandum. (2009, January 26). Retreived May 6, 2010 from Fox News website:

US Eclipsed by China in 2009 Auto Sales. (2010, January 6). Retrieved May 6, 2010, from NDTV website:

Cooney, S. (2005, April 25). U.S. Automotive Industry: Policy Overview and Recent History. Retrieved May 6, 2010, from NCES Online website:

Johnson, C. (1985). The Institutional Foundations of Japanese Industrial Policy. California Management Review, 27(4), 59-69.

Schmidt, B. (2010). Japanese Auto Industry. Retrieved May 6, 2010 from the Truth About Cars website:

Stoffer, H. (2001). Bush's advisers want less auto regulation. Automotive News, 75(5915), 16.

Reich, R. (2009). Government in Your Business. Harvard Business Review, 87(7/8), 94-99.[continue]

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