Japanese Executives Flock to U.S. to Gain Expertise in Service Industries

WASHINGTON — Driving her Toyota into a filling station not long ago, a Washington woman was surprised to find about 50 Asian men crowding its pavement, some armed with cameras.

As she hefted a self-service hose and pumped $5 of regular unleaded, they moved close, snapped photos and watched her every move with fascination.

Who were they? A Japanese study delegation, of course, hot on the trail of American wisdom on gas station management.

Carl Lotto, owner of Embassy Chevron Service, hosted three busloads of the energetic researchers that day. They wanted to know how much rent he paid, how much pay he took home and the split between full- and self-service sales.

With an interpreter, they interviewed customers at the pumps. Combined with the usual activity of a business day, Lotto recalls, “it was a pretty hairy experience.”

As surprising as it may seem, the new economic superpower thinks it still has lots to learn from its post-war mentor, the United States.

Although in places Japan has acquired an arrogant disregard for things American, the continuing flow across the Pacific of teams like this (its members were gas-station owners) proves that most people there continue to view this country as the world’s great marketplace of business ideas.

In decades past, the Japanese focus was manufacturing--steel, automobiles and other areas in which the United States was once world-envied. Today, having assumed leadership in many of these fields themselves, the Japanese appear to be giving increasing attention to service industries, in which they continue to lag.

Much to Learn

The areas being studied in that field range from mannequin displays in Bloomingdale’s department store to airline ticket discounting to the trading of arcane financial instruments on Wall Street.

“There is still much to learn from the United States,” said Konomu Matsui, a professor at Tokyo’s Rikkyo University, who arrived here last month as part of a 25-member team that will study how the United States manages research and development programs. The group will also brief Americans on Japan’s approach to this subject.

In recent visits, groups of Japanese business executives have focused on a wide range of industries and subjects:

Financial markets. The Tokyo Stock Exchange has sent officials here to study trade, regulation and price dissemination for those controversial new financial instruments known as stock index options, which the Tokyo exchange plans to introduce.

Airline travel. A senior official from the Japanese government’s Economic Planning Agency recently called on the airline group Air Transport Assn. with a series of highly technical questions on such subjects as U.S. airlines’ financial condition, ticket discounting practices, seat occupancy rates and methods of financing airport construction.

Shareholder relations. Relying on banks for much of their capital, Japanese companies have traditionally given short shrift to ties with shareholders. Annual meetings typically are over in minutes, with no dialogue between owners and managers. Traveling to various U.S. companies, this group sought guidance on how to open the channels of communication.

Corporate citizenship. In September, 15 senior corporate leaders called on various U.S. companies for advice on how to get involved with local communities. Their gleanings were intended both for use in Japan and at Japanese companies in the United States, which have been criticized for not becoming involved in their communities.

Government regulation. Recently, a group of Japanese bankers, academics and government officials conducted extensive interviews on the Glass-Steagall Act, the federal law that sets up walls between investment and commercial banking. Japan has a similar version of the law and is considering changing it.

From time to time, concern arises in the United States that too much know-how is being given to Japan. Japanese groups have occasionally been turned down by people and institutions they want to visit, and the U.S. government has begun to insist on better access to Japanese scientific facilities. But in general, this country is sticking with its tradition of openness, offering knowledge to most anyone who wants it.

2,000-Year Tradition

Overseas-study delegations have a long and venerable history in Japan. Starting in the year 607, it sent a series of “embassies” to China. In recent times it has focused on the West.

After it was forced out of feudal isolation in 1854, Japan began dispatching teams to Europe and the United States. Notes Arthur E. Klauser, senior vice president of Mitsui & Co. USA Inc., an affiliate of the giant Japanese trading house Mitsui & Co., “They’ve done this for 2,000 years, using selectively what they feel can be applied and changed into a Japanese form.”

Living in a society that is more hierarchical than most, the Japanese are forever ranking their own standing in particular fields of learning against those of foreign countries and moving toward filling the gaps.

While Japan has made stellar progress in research and innovation in recent years, many Japanese feel their society’s strong conformist ethic still tends to discourage creativity.

“In their minds,” said one Japanese of his fellow citizens, “there would be no such idea coming out as sending people to the moon. But if another person did it, maybe they would try to do the same.”

Much of the learning process proceeds through Japanese students at U.S. universities (about 18,050 are enrolled this academic year, according to the New York-based Institute for International Education) and Japanese business executives stationed here.

But the two-week U.S. study tour, launched from Tokyo’s Narita airport, remains a much-valued conduit as well. Part of the attraction for members is old-fashioned junketeering, the chance to see the great skylines of America, drink a bit and sample food in world-famous restaurants. But the Japanese are committed to work with uncommon intensity and make the most of the trips.

Forced Change in U.S.

Japan’s skill at identifying and commercializing promising foreign technologies has been long noted. Less well known is that they are great students of organization, the arts by which people and resources are brought together for the greatest output.

In the 1970s, it was competition from Japanese companies that forced many U.S. companies to implement painful restructurings to remain in business. Now with a near 100% rise in the value of the yen that has made Japanese exports more expensive, many of those same Japanese firms have had to undergo similar surgery to retain their global market shares.

The challenge has sent Japanese executives to study the mechanics of corporate restructuring. One group organized by the Japan Productivity Center in September called on such made-over American firms as Xerox Corp. and Aluminum Co. of America (Alcoa).

And recently a wing of Japan’s largest securities firm, Nomura Securities Co., organized a delegation of executives from Japanese computer makers that visited American banks and insurance companies to study how they use huge computer systems.

Management is not the only focus of recent Japanese inquiry. Matsui said that in the 1970s, many Japanese believed that the United States had nothing more to offer it in the crucial fields known as production and process engineering. In the 1980s, having seen how tough it is to go it alone in that field and growing worried about competition from emerging economies like South Korea and Taiwan, the old interest has revived. His team was evidence of that.

Service businesses, however, are the focus these days of many visiting delegations as the service sector gains increasing importance in the Japanese economy.

Bloomingdale’s Admired

Retailing is a case in point. The Japanese concede that their distribution network has far too many layers of middlemen and that Japanese stores are often short on creative flair. So they continue to look to America for help.

The Bloomingdale’s chain, for instance, remains the great ideal to which Japanese department stores aspire. Thus it is that Bloomie’s hosts an unending stream of visitors from Japan.

“They study the clothes,” said publicity director Miraed Smith. “They study the displays. They study the windows. They are curious about our cash registers, our inventory control. I would say there is nothing about Bloomingdale’s that they’re not interested in.”

Japanese visitors to the United States do not always receive carte blanche.

In organizing study trips, Nomura occasionally finds that American companies decline to receive guests from companies that are direct competitors. And Bloomingdale’s has a firm policy against photographs, to safeguard the time and creative energy that go into its much-envied displays and mannequins.

How much does the United States learn from Japan? In the early 1980s, Japan began receiving large numbers of U.S. delegations, as the idea took hold in this country that Japanese management techniques were a key to reversing America’s economic troubles.

That traffic continues today, in other fields as well. American teachers have toured Japanese schools. The National Assn. of Broadcasters has sent a group to study Japan’s development of a new generation of high-clarity TV equipment.

But in general, the flow of information appears to remain heavily in favor of Japan. Part of that is due to the closed nature of its society. And few Americans have made the years-long commitment of language study required to tap into the Japanese research community. But other reasons appear to be a continuing American belief that there is not much to learn from Japan.

Learning the Language

Nonetheless, things are changing slowly. The United States and Japan earlier this year signed a scientific cooperation agreement that is supposed to give American researchers better access to Japanese facilities.

More U.S. companies are setting up permanent facilities in Japan. And as Pacific trade continues to grow, Japanese studies programs at U.S. universities are starting to turn out a corps of Americans versed in the hard-to-learn language.

In the meantime, Matsui’s research and development team is making a point of dispensing as well as gathering information. At MIT on Nov. 1, for instance, the group will meet with American counterparts and give briefings on Japanese ways of doing things.

According to Daisaku Harada, head of the U.S. office of the Japan Productivity Center, which organized the delegation, “Exchange has become more two-way.”