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‘Rugged Individualism’ Hurting American Business, Specialist Says

February 16, 1989

KNOXVILLE, Tenn. (AP) _ An American management guru credited with helping to pull Japan’s business out of the rubble of World War II said Wednesday he wished his own country would adopt his methods.

W. Edwards Deming, an 88-year-old statistician and scientist who built a management style stressing quality and worker happiness, said America is headed for more trade woes if it clings to the ″rugged individualism, win- lose″ approach in running business.

″It’s short-term thinking. Much of our talent is spent churning money, looking for a takeover,″ Deming told about 500 students, faculty and business leaders at the University of Tennessee.

″It’s a win-lose system. It’s rugged individualism out of which comes the so-called merit system. Competition means increase your share of the market - ’I win, you lose.‴

Snubbed by American companies in the 1950s, Deming took his ideas to Japan, where businesses decided they had nothing to lose and adopted his theories. Since then, Japan created the Deming Prizes, based on a medal of honor he received from Emperor Hirohito.

Some of the Deming Prize winners, such as Fuji Photo and Mitsubishi Electronic, are among the most successful in penetrating American markets.

Starting about 1980, some U.S. businesses began expressing interest in the Deming method, but significant commitment has yet to jell, said Deming, who jets around to various corporations to teach his methods.

Some of his main points:

-Don’t make quick profits and stock prices the main corporate objectives.

-Make quality control, from the procurement of materials on up, a high priority, since it actually brings down the cost of production.

-Work closely with as few suppliers as possible and don’t automatically sign contracts with the lowest bidder.

-Assign responsibility for good product design at the top management echelon.

Deming likened the United States to a colony, selling off its metal, real estate and other raw materials while buying finished goods from other countries.

″Forty-four percent of the real estate in downtown Los Angeles is owned by the Japanese,″ he said. ″Our natural resources are petering out. How can this be? Things were so good,″ he said of the country’s prosperous post-war years.

″We ship out aluminum, nickel, coal, real estate, scrap metal. A colony ships out raw materials and buys back manufactured goods,″ he said. ″We’ve become a colony.″

He also decried the grading and evaluations systems used by American managers and educators.

″The so-called merit system has destroyed us,″ he said. ″What are grades? They are predictions. A high grade is a prediction that (a worker) will perform well 10 years from now under conditions nobody would dare foretell.

″People are entitled to joy in learning ... joy in work,″ he said.

″Rugged individualism - the days when it could work passed about three decades ago. We must change our economics to cooperation. Everybody wins. Equally? No, but everybody (is) better.″

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