Long range planning— Japan-USA— A comparative study

Abstract

This article reports on a comparative study carried out in the U.S.A. and Japan. He concludes that in the U.S.A. long range planning is used to integrate the strategies of divisions and to control the divisions. The planning process is usually bottom-up rather than top-down. In Japan, long range planning is used for improving strategic decisions of top management, so the planning process is a centralized interactive process. Project emphasis rather than quantitative planning is a common characteristic in both the U.S.A. and Japan. However American corporations are more advanced in this respect. Many Japanese corporations suggest that project emphasis is the key success factor for planning. To cope with uncertainty, American corporations tend to update their plans every year or even at shorter intervals, while adopting contingency plans. To the same end, Japanese corporations are using two time horizon plans which are composed of a long range strategy and a medium range plan. With respect to follow-up and implementation, American corporations follow-up more closely and long range planning is used for the evaluation of managers of divisions. The quality of plan and accomplishment are reflected to the economic rewards. Japanese corporations are less inclined to follow up the long range plan itself, but it is considered as important to implement it through the budget and also through the project plan. Project teams are quite frequently used.