Broadly it was seen as having a tendency to generate

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Unformatted text preview: eve efficient levels of cooperation and team-work, work organization must be structured so as to separate workers who are in direct competition with each other (hence job rotation). 14 11 OXFORD REVIEW OF ECONOMIC POLICY, VOL. 16, NO. 2 (iii) What Are Its Disadvantages? There have been, however, a string of criticisms of the Japanese system even before the problems of the 1990s emerged. Broadly, it was seen as having a tendency to generate barriers to the creation of new business and, therefore, to hamper creativity and innovation. It was also blamed for the apparent tendency to over-investment and resource misallocation which generated poor returns to capital. More specifically, the dominance of large, interconnected firms, together with underdeveloped (and over-protected) financial markets, resulted in poor access to finance for small and medium-sized firms, and little venture capital for risk-takers (OECD, 1996). When this is combined with the strength of internal labour markets and thus the lack of an external labour market for mid-career, managerial workers, it is argued that the system prevented creative new entrepreneurs from starting n...
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This note was uploaded on 02/03/2014 for the course ECON 204 taught by Professor Devero during the Summer '13 term at American University of Sharjah.

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