The problems Toyota is facing today as a result of an accelerator defect is the aftermath of a common Japanese business model that fails to balance a traditionally tight management style that ensures quality with the changing demands of a globalised economy.
Citing Stefan Lippert, a business professor at Temple University in Japan, Reuters says that Panasonic Corp. is another Japanese company that has failed to break from its traditional roots to fully take advantage of opportunities abroad.
Reuters warns that if Japanese firms don't adapt to globalisation, they may lose market share to competitors from China and South Korea which have been more proactive in developing local talent who are more familiar with their markets and can play an important role in product innovation.
"They have to come to terms with globalisation," Darrel Whitten, managing director of consultancy Investor Networks Inc., told Reuters. "I don't think it's a situation any more where you can run everything from headquarters.