JAPAN'S ECONOMY EXPERIENCED a bubble, epitomized by stock and real estate speculation, during the second half of the 1980s. It then experienced the collapse of that economic bubble in 1990–91. During the 1990s, the Japanese economy faced an extended period of stagnation evidenced in low growth rates and increased unemployment rates (although there were, of course, alternating phases of good times and bad, i.e. a business cycle). For Japanese firms, too, the 1990s were a difficult decade. The decade caused deterioration in the performance of many firms, and failures affected not only small and medium-sized enterprises but large firms as well. In the retail sector supermarkets and department stores failed, while Hokkaido Takushoku Bank, Yamaichi Securities, and the Long Term Credit Bank of Japan failed one after the other in the financial sector. In the industrial sector or, more specifically, the core automobile sector in which Japanese firms had made world-class achievements, Nissan fell into business difficulties, looked to France's Renault for rescue, and consequently became affiliated with the French automaker.

Japanese firms, which had swept over the world with their direct investment offensive during the 1980s, faced stalemate and failure in their overseas projects during the 1990s and successively pulled back. The Japan that had risen so rapidly as an investment and creditor superpower during the 1980s hit a massive wall in the 1990s. There was a feeling that Japan might experience in only one generation the rise to and fall from the status of investment and creditor power that in Great Britain had taken two centuries to unfold. This drastic change in a relatively brief period of time seems to have baffled Japanese business historians.

There are three problems concerning the Japanese firm that must be worked out for the field of business history, a field of historical research that, like Minerva's owl, always makes its appearance late. These three problems overlap in layers. The first problem relates to the success of Japanese firms. This problem is the explication of the causes for the phenomenal achievements of Japanese firms after the Second World War and especially in the ten years following the first oil crisis in 1973.