489 Japan’s post-war economic success: Deming, quality, and contextual realities

particularly in the 1960s, created a pace of technological leapfrogging hitherto
unseen. The infamous licensing of the “transistor” by AT&T to Japan
catapulted Japan into the modern “electronics age”. This successful “buy-in” to
an infant industry poised for stratospheric rates of growth became the first
large-scale Japanese success story. Similar actions, repeated in a host of
different product lines, demonstrated the Japanese strength to recognize,
assimilate, and commercialize good ideas, whatever their origin. The not
invented here (NIH) syndrome had little applicability in an entrepreneurial
Japan. Japan’s acute ability to recognize commercial opportunities sustained its
economic success. 
A critical byproduct of Japan’s entry into the mass-market electronics sector
and its subsequent migration into the semiconductor or microelectronics
industry was the requirement for quality to be embedded in each stage of the
production process. Electronics production was the first manufacturing
experience, outside of military fuze production, where quality workmanship
was vital to the product’s functionality. The high tolerances, clean-room
conditions, and automated nature of electronics manufacturing infused the
concept of “quality” in the Japanese consciousness in the very sector that was to
be the prime mover in Japan’s resurgent post-war economy. Herein was the
perfect molding of Deming’s teaching with the physical requirements for
quality manufacturing.
In fact, technology lay at the base of the “culture of quality” that began to
pervade Japanese manufacturing. Each stage of the production process – first in
ordnance, then in electronics, and later in microelectronics – is the sine qua non

---

Journal of
Management
History
5,8
492
in manufacturing and inspection/certification standards and is still unequaled
by any other industry. The Japanese adoption of the techniques offered by
Deming and his colleagues helped provide a philosophical basis on which to
infuse the importance of quality as an intrinsic part of the production process. 
Deming’s teachings, assumed embodied in Japanese practice, emphasized the widest possible
diffusion of statistical knowledge throughout the firm, so that those most intimately involved
with production processes would have the tools to root out causes of defects and bring those
processes under tighter control (Bushnell, 1994, p. 206).
Many point to the initial successes of the Japanese automobile industry in
gaining a toehold in US and European markets during the 1970s to illustrate
how quality imported products displaced inferior domestic suppliers. However,
the Japanese prevailed in obtaining a large market share, less because of the
quality of their products than with the exogenous factor of the 1973 Arab oil
embargo and the dramatic rise in gasoline prices. Japanese manufacturers of the
low-end Toyota and Datsun automobiles were the primary beneficiaries of both
the 1973 and 1978 oil price shocks as Americans sought smaller fuel-efficient
automobiles. It was not until the latter half of the 1970s that Japanese
automobiles began to project the image of low cost and high quality. Prior to
that Japanese auto makers were struggling for name recognition in the USA
and were largely competing in the low end of the market against German auto
maker Volkswagen. At that time, quality and Japanese automobiles were not
terms that US consumers associated together.
To understand Japanese acceptance of selected Deming concepts in the post-
war period, as well as their rejection by US industry, it is useful to step back and
consider the sociological, historical, and political currents of the period.