ANALYSIS: Japan Inc. Needs Competent CEO
Tuesday, March 13, 2001
TOKYO (Nikkei)--As Yoshiro Mori will soon step down as prime minister, the Liberal Democratic Party is seeking a candidate to succeed him as party president for its April election.
The Mori administration failed to implement structural reform, let stock prices fall and revealed a lack of leadership in the aftermath of the sinking of the Ehime Maru.
The markets watched Mori's words and actions closely and behaved accordingly.
The failure of the Mori administration shows that the government is a player in the market economy, making it essential that political leaders be good managers. The business world wants a capable CEO at the helm of Japan Incorporated.
"The problem is the system, including the process of selecting the prime minister and cabinet based on seniority, and the anachronistic thinking of the LDP, which chooses leaders that don't have what it takes," says a source at Standard & Poor's Corp., which downgraded its rating of Japanese government bonds in late February.
Having an able CEO of Japan Inc. is important for Japanese companies because a weak national government impairs their efforts to compete in international markets.
Concerning these issues, The Nikkei Industrial Daily interviewed Chairman Hiroshi Okuda of Toyota Motor Corp. (7203) about his ideal CEO.
Okuda said he thinks more people are dissatisfied with the LDP rather than with Mori himself. The LDP will only reform if it accepts this criticism and cleanses itself from within by changing the major players, he said.
"The LDP has lacked a mechanism for reform for quite a while. I heard an LDP member say, 'We've got 10 prime ministers.' The party doesn't give the prime minister the power to lead," he pointed out.
Okuda also said the government is aware of the problems facing the nation, but lacks speed. The problem is either the lack of a leader that can press for quicker action, or that government organizations are just not functioning, he said.
According to Okuda, there may be too many vested interests, and discussions about procedure and different Diet members with ties to specific industries make drafting a budget a complex process.
What the country needs, Okuda went on, is a strong leader, one who can use the many existing advisory committees and councils as tools and raise questions about their actions.
The prime minister should be able to compile the information generated by these organizations and use it to formulate policy, he suggested. It is important not only to receive information coming up from below, but to issue orders as well, according to Okuda.
"It's a matter of skill. The prime minister chairs the economic and financial advisory council. If he fails to turn recommendations into policy, it means that he lacks leadership," Okuda stressed.
Okuda said that selecting the prime minister through (behind-the scene) talks no longer works and called for an election.
"(If I became prime minister) I would try to create visions of how Japan and the world will look in 2010 and 2050," Okuda said.
According to Okuda, the prime minister has to act fearlessly. When the Finance Ministry drafts a budget, it worries about the political aspects and pressures from influential Diet members, an ineffectual way of creating a budget, he pointed out.
"The ministry should feel free to compile the budget and then let the politicians decide what to do with it," he added. |
