Corporate Governance: Us Model? Japan Model?
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Corporate governance is defined as the distribution of power in the company. In the 1990s, the great success of US economy let to the efforts to understand and copy American management methods.

The Anglo-American view of corporate governance derives from generating long term economic gain to enhance shareholder value. An outside board of directors is hired. The boards of US companies are made up of friends and acquaintances of the CEO. The use of stock options is another feature introduced so that management would focus on the shareholders interest in a high share price by allowing managers to benefit from the share price increase as well. Compensation programs for US CEOs are elaborate and include tax reimbursements, housing allowances, access to company cars and aircraft, bonuses, huge pension benefits. All these serve to demonstrate the powers of the “imperial CEO.” One major effect of stock options on governance is a large overstatement of the actual profit level of US companies. The second effect is that stock options act as a powerful incentive for the CEO to manipulate revenues and earnings in order to increase share price and for this a number of tactics are frequently employed. Transparency in corporate accounts is a prerequisite to establishing credible and effective governance.

The Japanese management system, with inside directors, promotions from within, career employment, egalitarian compensation, enterprise unions, long-term supplier relations, etc. have made for highly competent companies. The system is not perfect but Japanese companies continue to provide the economy with a large surplus on the trade account and are competitive without putting a cost to employment practices such as mass layoffs

Comparing Japanese governance systems with those of the other major economies it is evident that although profit is important, the long-term preservation and prosperity of the family should be the basic the aim of all concerned and not profit maximization or shareholders immediate values. In Japanese management systems, the employees come first.

A great many of the most successful US companies are in fact governed much as Japanese companies, with strong family-like structures and an emphasis on long-term continuity. These Family, Inc. indicate that the basic Japanese approach to the corporation as a social organization, for mutual self-interest and with controls against malfeasance, provide for the most effective system of corporate governance.

Analysis/Critique
The main criticism on the the US governance ideology starts with the core objective of the companys existence – proft maximization through increased share prices. US management charateristics which have proved to be flawed and have thus, resulted in failure for the firms that are based on them include the case for “crony capitalism” in US corporations where the CEO elects outside directors, ensures board support for the proposals advanced by the CEO. Many directors serve on several boards and are unable to contribute enough time to the board of an outside company.

The CEO in US corporations reigns supreme – “the imperial CEO” with little limits on his authority. He is allowed many forms of compensation schemes including stock options results in what is called corporate theft – executives stealing money from

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Great Success Of Us Economy And Japanese Management System. (July 2, 2021). Retrieved from https://www.freeessays.education/great-success-of-us-economy-and-japanese-management-system-essay/