William G Ouchi (1943-)


William Ouchi in
his college days

William G Ouchi is an American academic and consultant, best known for identifying a style of management which he termed 'Theory Z'. He described these concepts in a best-selling book published in 1981. Latterly Ouchi turned his attention to improving the administration of local government and of schools.

Early life

William George Ouchi was born on 28 June 1943 in Honolulu to dentist Sugao Ouchi and his teacher wife Nakano. Sugao's father Shigezo Ouchi had originally come from Japan to Hawaii to work in the sugar plantations.

Ouchi received all his early education in Honolulu, culminating in a spell at the prestigious English-speaking Punahou School. He excelled in his academic studies and helped overhaul the constitution and byelaws of the Punahou Student Association. But at this time of his life, Ouchi was more concerned with surfing, tennis and pursuing the social opportunities that the mixed school had to offer.

Ouchi's parents then paid for their son to attend the exclusive Williams College in Massachusetts. One of his tutors at Williams, encouraged the rather playful young man to take a more serious attitude to world problems.

After gaining a BA degree in Political Economy at Williams, Ouchi returned to Honolulu and married former school friend Carol Kagawa. Carol's father, Lawrence Kagawa had set up the Hawaiian branch of a US insurance company and was a regular business visitor to both the US and to Japan. As well as giving his new son-in-law insights to differing business practices in the two countries, through his brother, Kagawa was able to introduce Ouchi to Sony founder, Akio Morita.

Ouchi and his wife moved to California where he enrolled at Stanford University in San Francisco to study for his MBA. After gaining this qualification in 1967, the couple moved on to Illinois where after five years at the University of Chicago, Ouchi was awarded his doctorate in business administration.

In 1973 with his PhD and enhanced C.V., Ouchi returned to San Francisco with his wife to take up a research/lecturing post at Stanford Graduate Business School (SGBS). This time the couple was accompanied by their 2 year-old daughter Sarah Ayako. Their family would shortly be further extended by the arrival of another daughter, Jennifer Nakano and a year later with a son, Andrew Sugao. Ouchi commenced his career at SGBS, lecturing on a first year MBA course on organisational behaviour.

Collaboration with Richard Tanner Johnson

One of Ouchi's new colleagues at SGBS was another Assistant Professor, Richard Tanner Johnson. Soon after their first meeting, Johnson and Ouchi embarked on a programme of external work. Making use of Ouchi's language skills and contacts, this involved them carrying out interviews at the US plants and offices of twenty Japanese firms. In 1974 the pair published a short paper entitled Made in America (Under Japanese Management). The authors suggested the paper was "for discussion purposes only" and made the unusual request that it "should not be quoted in any form". The paper is full of anecdotes and opinions with little in the way of analysis or bibliography. Its "tentative" conclusions included:

The collaboration ended with the paper's publication and Johnson would subsequently gain much greater fame under the new name of Richard Tanner Pascale.

Seven years later, in the introduction to his Theory Z best seller, Ouchi gave an account of the collaboration referring to Johnson by his new name and saying: A colleague, Richard T. Pascale, and I designed a two-phase study to compare Japanese and American management. In the first phase, which was conducted during 1973 and 1974, Pascale and I visited the Japanese and American operations of more than twenty companies, each having a plant or an office in both countries. The second phase, which involved a more detailed collection of data, was carried on subsequently by Pascale and others, and is not reported here.

The New York Times was later to suggest that, following accusations of plagiarism, Ouchi and Pascale had now become bitter enemies.

Type A, Type J and Type Z companies

The style and content of Ouchi's paper with Johnson/Pascale contrasts with Ouchi's other academic work at this time. Five of his next six papers dealt with organisational control making little reference to Japan and the Japanese, (and none to Johnson/Pascale). It was at this time that Ouchi became particularly interested in the work of American academic economist, Oliver Williamson.

In 1976 Ouchi published a paper in which he first introduced the idea of the stereotypical US and Japanese companies which he referred to as Type A and Type J. He also identified some US companies with a high state of consistency in their internal relationships resembling those of a clan or tribe. He felt that these organisations which he classified as Type Z successfully blended American individualism with the cooperative style of the Japanese.

This paper also gave an insight into Ouchi's own values, with statements such as American society, which has been in a constant process of change during its turbulent 200 years, has reached a critical point. Church membership is declining; violent crimes increasingly involve a victim who is completely unknown to the assailant, workers feel less commitment to employers; all of us long for stability and structure in our lives.

Theory Z Best-Seller

In 1979 Ouchi left SGBS to take up a post with the Anderson School of Management at the University of California, Los Angeles (UCLA) to teach courses in management and organisation design, while conducting research on the structure of large organisations. This involved the Ouchi family moving 350 miles south to the beachfront Los Angeles suburb of Santa Monica.

Two years later in 1981, Ouchi's keynote work - Theory Z: How American Business Can Meet the Japanese Challenge was published. In this book Ouchi expanded on the themes he had first unveiled five years earlier in his Type Z organisation paper, and introduced the term Theory Z for the first time. He described this as an emerging management philosophy, which allowed organisations to enjoy many of the advantages of both American and Japanese systems. The book remained in the 'best-seller' lists for five months and elevated Ouchi to national celebrity status. It went on to be published in 16 foreign editions and at one stage ranked as the seventh most widely held book of the 12 million titles held in 4,000 U.S. libraries.

Within weeks of the publication of Ouchi's book, his former Stanford colleague and co-worker Richard Pascale also had a book published. Its title was The Art of Japanese Management and it too was a best-seller.

The reason for the popularity of the books lay in the economic context of the time and a widely held view in the USA was that the Japanese know how to manage better than we do. The Japanese economy was growing strongly and in 1981 had become the second largest economy in the world. By contrast, the US economy had slipped into recession with high levels of inflation and unemployment. A contributory factor had been the OPEC oil embargo (October 1973 - March 1974) against the USA and other Western nations who had supported Israel after it had been attacked by Arab nations in the 'Yom Kippur War' (October 1973). The embargo had led to a 300% increase in global oil prices and a recession in the USA and elsewhere.

A Focus on Schools

After 1981 Ouchi continued to lecture at UCLA and continued to write books. Ouchi's mother, Nakano and sister, Carol, were both schoolteachers throughout their working careers and in 1982 a more modest publication Theory Z and the Schools revealed Ouchi's own abiding interest in education. His follow-up book for Addison-Wesley The M-form society: how American teamwork can recapture the competitive edge was published in 1984. In it Ouchi took the managerial and organisational thinking that he had unveiled in his Theory Z book and ambitiously extended it into an analysis of economic society and the laws that governed it, both in Japan and in the USA.

As a committed Republican, his preference was for the removal of legal restraints on the business sector; in particular antitrust barriers to industry-collaboration and the 50-year old Glass-Steagall Act which imposed a separation of investment and commercial banking. He argued for the industry-wide teamwork between companies that had helped Japanese technology companies achieve such success. Ouchi took leave from UCLA from 1993 to 1995 to serve as advisor and chief of staff to the then Los Angeles Mayor, Richard Riordan.

Ouchi's next book detailed a study of 223 schools in six cities across North America and concluded that schools with the most decentralised management systems performed best.

Ouchi's most recent book covers similar ground, reporting on a study of 442 schools in eight urban districts. Ouchi advocates choice, empowerment, effective principals, accountability and weighted student formula budgeting.

Ouchi and his wife at the opening of the
William and Carol Ouchi High School in 2010

Other Interests

Ouchi is co-founder and chairman of The Riordan Programs, which encourage and prepare individuals from diverse and disadvantaged backgrounds to pursue higher education and careers in management. He serves as Chair of the Nozawa Endowment which supports students from Japan who are studying at the Anderson School and also on the Boards of the Conrad N. Hilton Foundation, the California Heart Center Foundation, and The Alliance for College-Ready Public Schools. In this latter capacity Ouchi and his wife Carol have given their names to a local high school.

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