Israel & Japan

Question 1

State the 8 clusters of mapping the business systems of major economies (with examples)!

Answer 1

1. Coordinated and Liberal Market Economies (Germany, Sweden)
2. Highly Coordinated Economies (Japan; because of the Duda-Hart stopping rule)
3. European Peripheral Economies (Spain, Croatia)
4. Advanced Emerging Economies (Israel, Chile, South Africa)
5. Advanced City Economies (HK, Singapore)
6. Emerging Economies (Russia, China)
7. Arab Oil-Based Economies (Qatar)
8. Socialist Economies (Venezuela)

Question 2

What can we learn from the mapping of the business systems of major economies?

Answer 2

• Better understand economic outcomes such as comparative advantages, growth, or inequality
• Late-developing economies leveraged institutional innovations to catch up
• Abstract rules and regulations have not yet superseded the patrimonial structures typical of traditional societies leading to low levels of institutional trust in emerging markets

Question 3

Japanese institutions focus on … ?

Answer 3

“Kaizen” = continuous small improvements of the existing framework

Question 4

Why is Japan considered very conservative with no risk appetite?

Answer 4

• Life-time employment: salary and position not performance based but rather age based (Dictates japanese society status)
• No-Entrepreneurship: even though very creative people no support and lots of barriers for new companies
• close to 0% interest rate for decades

Question 5

Explain: Japanese Business Knowledge

Answer 5

• Strict seperation of business and social
• Small talk before business
• High-context culture (rude to say no)
• Hierarchical but consensual leading to hight coordination costs
• Distribution via trading company
• Market-entry via networks/partners

Question 6

What are the cultural characteristisc of Israel?

Answer 6

• Institutions focus on creating radical new innovations and cultural changes
• Only country where tradition and innovation is living in a synergy
• 10% modern surface (IT), 90% messy underneath (all other industries)
• Solution: Outsourcing to other countries

Question 7

What are Elite business models?

Answer 7

Elite business models are the business models that positively or negatively impact the institutions of a country and therby influence its economic development.
It is a great indicator for sustainable value creation and shows if a country will grow or not.

Question 8

Explain: Good vs Bad Elites

Answer 8

Good Elites= Value producing business models that add value for the whole economy and therefore enlargen the whole pie

Bad Elites= Value extracting business models that increase their own share of the pie through corruption, trade barriers, etc.

Question 9

What is Hambrick’s “Upper echelon theory”?

Answer 9

Claims that diversity among top managers and members are an important condition for the successful utilization of the various assets a firm has at its disposal.

Question 10

Explain: “Emic-as-etic”

Answer 10

Belief that what works in the west universally works everywhere

Question 11

Explain: “Etic-to-emic”

Answer 11

Opening up to local varieties

Question 12

Explain: “Emic-as-emic”

Answer 12

Recognize local uniqueness