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s a comparative evidence of how US companies' productivity averaged at 2.7% in 1960 and decreased at -0.3% at 1980. While at the same time Japan averaged a productivity increase of 9.4%, Germany and France productivity also increased at 5.6% and 5.4% (Buffa 1987). The reasons for US decreasing in their productivity growth in industries and their capability to compete globally are due to many reasons. One factor could be the difference of the work ethics values between US and Japan or Germany showing us how culture can also have an effect on the nation's competitive advantage on various business systems. Bosch and Prooijen (1992) have paid attention to the role of national culture and impact it has on Porter's diamond. Porter agrees in that national culture is an important determinant in the competitive advantage of nations, but does not include national culture in his descriptive framework of the diamond. National culture has an important impact on relations between related and supporting industries (Bosch and Prooijen 1992) therefore to an extent Porter's theory doesn't account how culture is another explanation for the variations in national business systems and comparative economic performance for a nation. For example, Hofstede (1980) found Japan compared to Western and Northern Europe, is a very strong uncertainty avoider. Hofstede (1980) argues that the variations in values between cultures will require the difference organisational responses. The economic environment of a nation can be determined by the cultural values.

Gerschenkron (1962) theory also states that history is important in measuring economic success and performance for a nation. Porter (1990) neglects the role of historical cause in his diamond model. In the case of Germany and Japan for example, there is probably a direct connection between past militarism and the present industrial domination. Militarism has contributed to industrial excellence by creating a tradition of discipline in the labour force for both of these nations. Germany's and Japan's competitiveness owes a great deal to its amoral military past (O' Shaughnessy 1997). Particular historical events can be unique to a country which can determine its character (Saunders et al 1986). The occurrence of invasion and revolution is a shared experience amongst many successful nations in history. O' Shaughnessy (1997) argues that there are limitations to Porters (1990) methods. For example the diamond conditions emerged from examining the history of 100 industries, but to do this thoroughly histories would have to be written in the form that would allow such analysis. The detail would require the company histories. Neither the references nor the acknowledgements suggest any such documented histories of 100 industries. The four histories quoted from Porter's are just sketches that illustrate rather than test the theory (O' Shaughnessy 1997). Chandler (1992) also agrees that the history is important for any organisation and industry. He argues that significant analysis of a business or nation today must be based on the understanding of its past.

Reich (1991) agrees on the concept that Porter theory on national competitiveness (1990) to an extent doesn't account for various business systems and comparative economic performance. He argues that economic success or performance is due to national purpose rather than national competitiveness. Nation competitiveness depends on globalisation and the