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In the late 1970s, the author read everything he could about Japanese business. But only by working for Japanese companies has he been able to learn about day-to-day management. In the past 11 years, first at Toshiba's U.S. computer business and then at Seiko Instruments USA, he has learned firsthand more than ten Japanese management techniques.

According to a survey the author conducted for the International Women's Forum, women managers are succeeding by drawing on what is unique to their experience as women. Because they have historically been expected to play a supportive and cooperative role, women have learned how to manage effectively without relying on their control of resources and power to motivate others. They tend to be more interactive in their leadership than men.

Small and midsize companies make up 99% of Japanese industry, and are the real foundation of the Japanese economy. The high-quality goods that come bearing a famous maker's name are seldom the product of that company's factory -- in fact, small companies usually designed, assembled, packaged, and shipped it. These subcontractors are like serfs in a highly structured feudal system. The big companies are the daimyo -- feudal overlords who control the fates of their subjects.

To combat poor motivation and lack of commitment, and bridge the gap between performance and potential, the owner of Johnsonville Sausage completely changed his management style and redirected the structure of his company. By giving up his own authority and getting employees to take full responsibility for decisions on production, personnel, quality control, and company expansion, he was able to increase performance standards and market share.

This is an MIT Sloan Management Review article. Ray Stata of Analog Devices put the importance of the learning organization succinctly: "The rate at which organizations learn may become the only sustainable source of competitive advantage." At an MIT-sponsored conference entitled Transforming Organizations, two questions arose again and again: How can we build organizations in which continuous learning occurs? What kind of person can best lead the learning organization? This article, based on Senge's book The Fifth Discipline: The Art and Practice of the Learning Organization, begins to chart the territory, describing roles, skills, and tools for leaders who wish to develop learning organizations.

Conscience explains why most business men and women keep their word and deal fairly with one another. There is no evidence that honesty pays, despite efforts to argue otherwise. As business people, we tell ourselves that dishonesty is punished, but it is hard to find cases in which retaliation is swift and sure, even when wrong has clearly been done.

As 1992 approaches, markets are opening in Western Europe and throughout the world. U.S. experience with the competitive dynamics of deregulation over a ten-year period provides valuable lessons for managers debating whether and how to expand into new markets. To thrive in the competitive environment an open market creates, many executives must exchange their companies' roles as broad-line players for new roles as low-cost entrants, focused segment marketers, and providers of shared utilities. They must also be prepared to make new strategic choices as the structure of the industry changes.

Levi Strauss & Co. chairman and CEO Robert Haas says that, because new economic realities place more complex demands on employees, a company's values are now more important than ever before. At Levi, Haas is using the company's values (codified in the Levi Strauss Aspirations Statement) to reinvent occupational roles and responsibilities, performance evaluations, employee training, work organization, and business decisions.

Many U.S. manufacturers, searching for growth in maturing consumer markets, have shifted their emphasis from advertising to sales promotions. But promotions actually mean price reductions. The loss of profits can be severe. Promotions bring volatile demand, whereas the producer seeks stable demand. Theme advertising that seeks to sustain a brand's image and build customer loyalty can actually help stabilize demand.

How can one company gain access to another's resources or customers without merging ownership or management? New information partnerships can help diverse companies develop strategic coalitions through the sharing of data. This has been made possible by a quantum improvement in hardware and software. Customers benefit from these innovations as well. Their desktop work is made simpler, and the standards by which they compete are made more universal.

The promotions committee at Meeker, Needham & Ames, a long-established law firm, met to discuss the candidacy of three associates up for partner. The vote was split on the candidacy of Julie Ross, who, although she had exceptional skills and an ability to bring in new business, worked only part-time as an associate. The meeting minutes and the expert commentaries that follow discuss the advantages and disadvantages of having a part-time partner.

Companies that aim for "zero defections" (keeping every customer they can profitably serve) can make profits rise. Defection rates are both a measure of service quality and a guide for achieving it. By listening to the reasons why customers defect, managers know exactly where the company is falling short and where to direct their resources.

In many companies, strategic thinking has outdistanced organizational capability. Often these companies make the mistake of adopting elaborate organizational matrices that actually impair their ability to implement sophisticated strategies. Keeping a company strategically agile while still coordinating its activities across divisions, even continents, means eliminating parochialism, improving communication, and weaving the decision-making process into the company's social fabric. The goal is to build a matrix of corporate values and priorities in the minds of managers and let them make the judgments and negotiate the deals that make strategy pay off.

Logistics alliances are becoming commonplace in business today. Each party involves itself in the operations of the other, to the benefit of both. Often one party is a product marketer (sometimes two or more product marketers) and the other is a distributor or warehousing specialist. Fueling the drive toward logistics alliances is the escalating competitive environment that is forcing businesses to become low-cost competitors in order to keep prices down and maintain customer loyalty. To meld parts of two or more organizations into one smooth-running operation is not easy; turf battles rage. But trust is necessary because each party must not only perform its own task efficiently but also act on behalf of the strategic objective.

U.S. and European information technology companies face a choice: cooperate or become design and marketing arms of their Japanese competitors. As digital technology ushers in an era of inexpensive personal systems built from standard, mass-produced components, industries are converging to form a huge information technology sector. Companies able to manufacture components are gaining ground. This trend plays to the strengths of the Japanese; embedded in industrial combines known as keiretsu, they invest in technology and manufacturing, command the supply chain, and coordinate strategy to block foreign competition and penetrate world markets. McKinsey Award Winner.

Companies rarely achieve radical performance improvements when they invest in information technology. Most companies use computers to speed up, not break away from, business processes and rules that are decades, if not centuries, out of date. But the power of computers can be released by "reengineering" work: abandoning old ways of working and creating entirely new ones.

Service companies often cannot prevent mistakes, but they can learn to recover from them and thereby retain an unhappy customer. Recovery begins by identifying the problem, then acting quickly to correct it. Most important, service companies should give front-line employees the authority and responsibility to do what is necessary to correct a service mistake, even if it means deviating from the rules.

At Cypress Semiconductor, management systems track corporate, departmental, and individual performance so regularly and in such detail that no manager can claim to be in the dark about critical problems. The systems give managers the capacity to monitor all levels of the organization, anticipate problems, and intervene when appropriate without creating layers of bureaucracy.

An emerging synthesis of financial strategies, organizational structures, and operating philosophies is revitalizing the publicly held corporation by addressing deep-seated structural weaknesses. This synthesis reflects three insights: the power of entrepreneurial motivation, the impact of balance-sheet restructuring and strict financial discipline, and the benefits of decentralizing authority and ownership.

A paper company whose subsidiary, a mill, was on the verge of bankruptcy turned the mill into a profitable operation within a few years. It used a multiyear learning process in which employees developed four progressively more sophisticated problem-solving loops: fix-as-fail; prevention; root causes; and anticipation.