To read this content please select one of the options below:

Understanding the erosion of US competitiveness: Managed education and labor in Japanese “corporate castle towns”

Wayne Gordon Macpherson (School of Management, Massey University, Palmerston North, New Zealand)
James C. Lockhart (School of Management, Massey University, Palmerston North, New Zealand)

Journal of Management History

ISSN: 1751-1348

Article publication date: 12 June 2017




For the past three decades, the dominant economic policy environment across the Anglosphere has assumed that industrial performance results from increasing national competitiveness. The US Government and others have extensively used the tools of deregulation that emerged from the influential frameworks of Michael Porter and the Chicago School. That both the contributing analysis and attendant policy environment largely neglected the very source of national disadvantage, mostly Japanese industry in the 1970s and 1980s, remains surprising. What was going on in Japan at the time, and to some extent continues today, remains largely hidden. The aim of this paper is to expose one source of Japan’s influential competitive advantage – the human resource.


This paper, through the translation of a Japanese-language paper by Professor Emeritus Masaki Saruta, introduces the Japanese phenomenon of managed education in Aichi Prefecture, home of the Toyota Motor Corporation, and provides insight into the lifestyles of the Japanese workers who live and work in corporate castle towns that feed Toyota. Inductive content analysis was used to identify four themes that can be identified as the strategies used to produce a homogenous pool of labor that sustains the Toyota Way philosophy and Toyota Production System.


The content analysis identified four major themes: Toyota’s abnormal level of influence over local government, a unique education system of education management, a closed labor market and the homogeneity of labor. It is only now that business leaders in the Anglosphere are able to comprehend the vastness and depth of inculcation and nurturing policies of Toyota and other Japanese industrial giants – something business leaders in the Anglosphere today can only dream. It now becomes evident that Chandler’s visible hand remains alive and well, but critical drivers of its success in Japan and Toyota were largely invisible to the West.

Research limitations/implications

The research required the knowledge of one of Saruta’s works that is only published in Japanese, and therefore, inaccessible to researchers in the Anglosphere. The translation process and development of themes is reported in detail. The findings are then located in the broad context of national competitive advantage.

Practical implications

With the insight presented in this paper, business and government leaders may now be empowered to implement policies and practices to nurture a pool of labor more conducive with the organizational strategic policy. While leaders in the Anglosphere are able to implement policy, there also remains a new threat to economic sovereignty – the nurturing of human resources in the dormitories, refectories and shopping malls of industrial China.

Social implications

The development of a company-focused workforce to support corporate castle towns, one of the sources of national advantage, has been identified in this paper. The social implications are twofold. First, in Japan, the nature and influence of these towns are accepted and heralded by the community. Second, outside of Japan, and especially across the Anglosphere, these towns are a major source of competitive advantage.


Through the translation of original research published in the Japanese-language medium, this research provides otherwise inaccessible insight into the inner workings and effectively the “black box” of what was Japan Inc. in an era when business people in the West were playing catchup. As the debate on globalization extends to sovereignty across the Anglosphere, it is beholden on the academic community to provide effective solutions for industrial competitiveness.



Macpherson, W.G. and Lockhart, J.C. (2017), "Understanding the erosion of US competitiveness: Managed education and labor in Japanese “corporate castle towns”", Journal of Management History, Vol. 23 No. 3, pp. 315-336.



Emerald Publishing Limited

Copyright © 2017, Emerald Publishing Limited

Related articles