"theory F"

All those studies on Japanese management overlook the one ingredient that makes it all work: Fear.

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BACK IN 1972, AS JAPAN WAS WELL along in its drive to dominate the world's economy, Masanori Fujimoto left the green fields of his native Hokkaido to seek his fortune. With a degree in international economics earned at a local university, Fujimoto secured himself a job in Tokyo with Mitsubishi Corp., part of one of Japan's most venerable and powerful industrial groups. Hardworking and intelligent, Fujimoto did well at Mitsubishi, and in 1979 earned his M.B.A. from Stanford University under a company-sponsored scholarship. Now fully fluent in English and acquainted with the latest in American business practices, the lean, handsome executive returned to Japan with all the accountrements necessary for a highly successful career in the elite ranks of Japanese business.

Yet today, Fujimoto, like a growing number of other highly qualified Japanese managers, finds the path to success so clogged as to be virtually impassable. With corporate growth slowing appreciably and a mounting oversupply of qualified executives, giant corporations such as Mitsubishi no longer generate enough executive positions to satisfy ambitious young sarariman.

"We don't have a very good dream anymore," Fujimoto said over lunch in the small apartment he shares with his wife and two children in a quiet Tokyo residential district. "We know that there will probably not be the promotions, the rise in position we expected. It's a gloomy reality."

Fujimoto's pessimism is surprising in a country that has enjoyed so much growth and prosperity. And it is in startling contrast to all the mythology about the Japanese miracle, especially the unique loyalty that is said to flow between the Japanese corporation and its employees.

"It's not really a question of loyalty," explains Fujimoto, who works an average of 60 to 70 hours each week selling large-scale power and electrical systems to North American customers. "The reason you don't go is there is nowhere to go."

"Nowhere," because switching firms or even starting your own company is not a realistic alternative. In the business culture of Japan, bigness denotes status, and changing jobs suggests personal failure. "Here you learn to live the frustration because everything else is too risky," Fujimoto complains. "You are a prisoner of society and the rules that govern your life."

To William G. Ouchi, the UCLA management professor whose book Theory Z has probably done the most to popularize the notion of Japanese managerial supremacy, Fujimoto's frustration is merely the necessary trade-off in a culture that prefers to sacrifice a measure of individual freedom for professional security, to trade personal fulfillment for economic prosperity. "If you want a system that's supportive, it's also likely to be constraining," Ouchi argues.

But others are beginning to wonder if these trade-offs are now leading Japan in the wrong direction -- toward institutional rigidity among corporations, unhealthy competition among workers, and stifled creativity. One such skeptic is Michael L. Jablow, an American who founded an electronics marketing firm in Tokyo. Jablow finds that negative factors now play a far more important role inside Japanese companies than humanistic principles stressed by Japan-boosters like Ouchi. After 15 years of living with the Japanese and competing against their firms, Jablow has come up with his own, somewhat unconventional theory, "Theory F":

"Theory Z-type theories don't talk about how the system actually works," he says. "It is actually fear that moves those managers. There is no tolerance for failure. The penalty for failure is out, finished. It's the powerful motivation."

According to Jablow, the only executives who reach the top of Japanese companies are those who succeed at every step in their careers. "The people who make it in those companies are tough sons of bitches. Their rivals are always willing to give them enough rope to hang themselves. And they better not fail, because there are no second chances." Not in that company. Not in any Japanese company. The choice for an executive who fails, Jablow notes, is either a one-way ticket to oblivion in some remote subsidiary, or early retirement.

JAPAN IS A NATION MEAGER IN natural resources, except for its remarkable and dedicated work force, and since feudal times has thus felt a special need for structure and hierarchy. Only in exceptional times -- most recently during the American occupation -- have large numbers of Japanese individuals been able to break out of fairly well-defined and prescribed societal roles.

It was during the occupation that the remnants of the zaibatsu -- the large corporate grouping that had dominated prewar Japan -- adopted lifetime employment and strict seniority promotions that we have come to think of as uniquely Japanese. The immediate aim was to quell labor unrest and allay the fears of a nation occupied by its former enemies. But partly as a result of such reforms, Japan's economy took off. Annual growth rates reached double-digit levels throughout the 1960s and early '70s. And the reconstituted industrial giants, along with such upstarts as Sony Corp. and Honda Motor Co., were able to create new positions of status and authority for the swelling ranks of sarariman. Impressed with both the successes of these firms and the seeming devotion of their employees, many foreigners began to wonder if Japan had somehow found the ideal system of corporate management.

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