JAPAN AS NUMBER 2 - COMPETITIVE PROBLEMS AND THE FUTURE OF ALLIANCE CAPITALISM AFTER THE BURST OF THE BUBBLE BOOM

The Japanese onslaught in export markets in the 1970s and 1980s evoked an enormous interest from academics of all kinds, who attempted to lo cate the cases of Japanese supremacy in production management, supplie r relations and employment practices as well as in its forms of corpor ate control. Recently, the predictions of Japan as Number One have tur ned out to be wrong, and the United States has emerged as a pre-eminen t competitor, not only in computers and multimedia, but also in tradit ional industries, such as autos. This article confronts the 'Japan as Number One' literature with current dilemmas in the Japanese economy i n general, and in autos and software in particular. Toyota's recent de parture from important principles in its famous production system are also analysed. Further, this article deals with how employment practic es in large companies are affected by the protracted recession. In the conclusion it is stressed that, although under severe pressure, Japan is not simply convering with Western 'normalcy'. Its 'alliance capita lism' is eroded but not eliminated and future studies of Japan must gr asp its contradictions and contrasts in a very different way from the studies of the previous decade.