A Quasi-Global Mindset: Psychological and Structural Factors That Made Japanese MNCs Succeed in the West and Struggle in China

Abstract

The aim of this study is examining why many Japanese MNCs, which are embedded in Eastern cultures, were successful in the late 1970s and 1980s in Western markets, but have struggled in Eastern emerging markets such as China since the mid-2000s. The success of Japanese MNCs in Western developed countries, whose cultural, institutional, and business environments are very different from the Japanese market, suggests that Japanese managers were developing global mindsets. Thus, their recent struggle in China, which should have more commonalities with Japanese markets than Western markets, is a puzzle and should provide important implications for both researchers and practitioners. Based on the results of exploratory interviews with senior executives of ten large Japanese MNCs, we proposed the idea of a quasi-global mindset, which characterizes Japanese managers’ mindsets that are not truly global but are subjectively global. To the extent that managers erroneously believe they have a global mindset and that traditional organizational structures and systems block opportunities to recognize the problem, managers cannot understand the real problems and thus falsely attribute difficulties to the external environment. This study provides important implications to Japanese MNC managers as well as other MNC managers in terms of articulating the importance as well as the difficulties in obtaining true global mindset.