ABSTRACT
On the surface, it certainly looks as if corporate restructuring is finally under way. Under intense financial pressure, firm after firm has announced reorganization plans. Take the issue of outside corporate directors. Currently, virtually all corporate directors are the same executives that the board is supposedly overseeing, even though some studies show that firms with outside directors do better on sales and profits. Equity strategist Alex Kinmont of Nikko Salomon Smith Barney tells the story of a firm that produced three hundred widely variegated products. Japanese firms’ strategy elevated labor productivity, or sales per worker, at the expense of total factor productivity, or the productivity of labor and capital combined. Just as families are the basic building block of society, firms are the basic building block of the economy. Those who claim that there is rapid reform in Japan point to a remarkable series of changes in the commercial code and other regulations.
