The Looming Shadow - Corporate Pathology in the Recession and the Reality of 1977

The Looming Shadow - Corporate Pathology in the Recession and the Reality of 1977

In the late 1970s, Japan's previous "growth miracle" had come to an end, and a shadow of uncertainty was spreading over the country's economic horizon. 1973 saw the first oil shock, which pushed up oil prices several-fold and dealt a serious blow to the manufacturing-oriented Japanese economy. The model of mass production and mass consumption that had been taken for granted during Japan's period of rapid economic growth had come to a standstill, and it was during this period that the country faced "stagflation," a period of simultaneous inflation and economic recession.

In the corporate world, the lifetime employment and seniority system that had been built up since the postwar period supported stability, but on the other hand, it also created rigidity and deprived young workers and front-line workers of vitality. The "corporate pathology" discussed in the article referred to the old structure and slow decision-making preserved within organizations, which were unable to adapt to declining sales and profits, and which were eroding them like a disease. In large companies in particular, the bureaucratic system was growing stronger, managers were inclined to maintain the status quo, and the will to innovate had atrophied.

The recession was also deeply felt throughout society at the time, with the pollution problems of the early 1970s followed by rising consumer prices and job insecurity directly affecting people's lives, and there was widespread concern that growth would not continue. In the political arena, economic policy was difficult to steer, and on the labor front, the clash between demands for higher wages and rationalization intensified.

Against this backdrop, the term "corporate pathology" was not merely an economics metaphor, but symbolized the sense of stagnation of the times themselves. The sense of a full-blown recession, which the generation that had known the exuberance of rapid economic growth was experiencing for the first time, was spreading like a shadow over society as a whole.