THERE was a time when Japan ruled the world. The Land of the Rising Sun did not even fire a shot to gain the position. It manufactured the most popular and durable vehicles. It sold the finest appliances. It produced the records of Barbra Streisand, Bruce Springsteen and Michael Jackson, among others. It even owned the crown jewel of American capitalism, the Rockefeller Center in New York.

Japan Inc. zoomed to become the world’s No. 2 economy next only to the United States of America. From the ashes of war, the Japanese people, through industry, loyalty and creativity turned out superior electronic products that put to shame the once dominant American brands.

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GE and Zenith fell behind Sony, Toshiba, Hitachi, Panasonic and Sharp. Ford and General Motors could not stop the Toyota, Honda, Mitsubishi and Mazda domination of the automotive industry.

Columbia Pictures became Sony Pictures Entertainment that owned film franchises such as “Spiderman” and “Men in Black” and hit television shows such as “Who Wants to be a Millionaire?

Whatever Japan touched turned to gold. Thus, most countries became receptive to investments that came from Japan, with the belief that technology transfer and the fabled Japanese business culture would advance their economies.

One example in Cebu is the largest shipbuilding dockyard in the Philippines, Tsuneishi Heavy Industries (Cebu) Inc. in Balamban that built the biggest vessels in the country.

In 2010, iconic Japanese brands are in trouble. Japan Airlines, the nation’s flag carrier, declared bankruptcy. Toyota is making a huge recall of vehicles for faulty accelerators, while Honda is recalling 646,000 cars worldwide because of faulty window switches.

There’s more. Japan's electronics industry, a key driver of the country's economy, is facing the biggest crisis since 2002 with nine of its leading electronics manufacturers expected to sustain losses, in the fiscal year ending in March, of more than US $22.3 billion. Sony Pictures Entertainment has started laying off 6.5 percent of the company’s 6,800 workforce, due to “online piracy and changing viewer habits.”

What has gone wrong in Japan Inc.? Among the answers put forward are extensive global expansion, satisfaction with the status quo, and even arrogance.

There are not enough Japanese managerial talents to run its businesses overseas, thus, locals are taking critical positions bringing along their own expertise and experiences that may not be in full cadence with the Japanese beat. Why change an efficient system?

Innovation seems to have slowed down among Japanese companies, complacent on being on top of their game for a considerable time. It has not bothered to challenge Microsoft and Apple that have put the USA back in front. Most of its computer products are dependent especially on the software of Bill Gates.

One important element that made Japanese companies successful was the loyalty of its employees who worked until retirement.

This is lacking in the younger generation, resulting in the lack of commitment to companies.

There are strong challengers to Japan’s dominance in business and trade. Foremost is China, which is expected to overtake Japan as the second economic power in the world. South Korea, Taiwan and India have re-engineered their businesses to the changing needs of the times.

The Japanese government came to the rescue of Japan Airline, but has not put its hands forward to help sort out the problems that are currently confronting other branded businesses. Surely, the rest of the world is following developments in Japan Inc. whether it remains to be a model or an institution past its prime.