His paper highlighted the remarkable transformation of Japanese business practices. Japanese corporations have adapted the "Choose and Focus" strategy which "enabled Japan's leading corporations, previously diversified to an exceptionally high degree, to become leaner, more nimble, and more competitive at home and in the global economy" (Schaede 2008). They did this by shedding non-core businesses and by repositioning for leadership in targeted technologies. This strategy was said to be completely opposite to Japan's previous industrial architecture but it has surprisingly created fresh market opportunities both for start-up enterprise and for foreign investors (Schaede 2008). It has challenged existing companies out of mediocrity and complacency, through series of mergers, acquisition and hostile take-overs (Schaede 2008). More importantly, this transformation was observed to have been rooted in the component and material industries rather than in consumer products (Schaede 2008). Generally, the more lean Japanese business has proven to be an effective and competitive strategy and this is the fundamental transformation that the author is talking about.
Another social scientist, T.J Pempel mentioned about fundamental transformation in the Japanese economy. It is our goal in this paper to examine if what T.J Pempel refers as a fundamental transformation is the same as that of Schaede's.
Pempel mentioned at least three changes in Japan, things with regard to its political system, to its economy and to its international relations. In the political arena, the noticeable internal fragmentation of the Liberal Democratic Party, its loss of a parliamentary majority and executive control, and the introduction of a new electoral system for the Lower House of the Diet has spelled the end of the party (Pempel, 1998). Second of these changes is the economic slowdown of the once forward-heading economy. These economic turnaround from an unrelenting success was brought by the collapse of both the stock and land prices, five years of almost zero growth, international downgrading of the Japanese bonds and the collapse of numerous financial institutions among others (Pempel 1998). He also mentioned the changes in international relation, with particular focus on an apparent sibling rivalry with the United States primarily triggered by the economic competition. This competition was shown in series of trade and market disputes.
Since the paper of T.J Pempel was written a decade before that of Schaede, we can say that they are talking about different scenarios and different type of transformation. But, it is analytically obvious that the Japanese transformation mentioned by Ulrike Schaede had its origin in the political, economic and international relations changes by Pempel. Therefore, they are not mutually incompatible arguments but are complimentary. In fact, the 2008 paper of Schaede is a support to the premises of Pempel, revealing that Japan was able to move forward from the transformation that it experienced a decade ago. The fundamental business transformation of Japan was a