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Wesley Bedrosian

D. Hurst/Alamy (money)

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Shop at the Company Store, Please

As Japan stalls out, some Japanese companies are asking employees to consume where they work. Electronics giant Panasonic (PC) kicked off its campaign in February, asking 10,000 midlevel and senior managers to spend at least $1,050 on its products by July 31. At Toyota (TM), bracing for its first annual loss in nearly five decades, 2,200 managers are being encouraged to buy new cars. And tech conglomerate NEC's president, Kaoru Yano, has urged employees to demonstrate their loyalty via their wallets in a message on NEC's internal Web site. It's not a bottom-line tactic. Toyota's selling an extra 2,200 cars—it sold 8.9 million last year—couldn't plug the $3.9 billion loss the company projects for the fiscal year ending in March. But such buy-at-the-office programs create "a real sense of crisis for employees," says Chiaki Nakano, a management professor at Reitaku University near Tokyo. "That's very important in Japan when you are trying to change the company from the inside."

—By Ian Rowley and Kenji Hall in Tokyo, Edited by Deborah Stead

Tiny Homes for Tough Times

In this brutal housing market, homebuilders are thinking smaller. And Los Angeles-based KB Home (KBH) is thinking really small: 880 square feet. It's offering such compact two-bedroom, one-and-a-half-bath houses for $64,000 in three suburban Houston subdivisions. The idea is to compete with low-cost, bank-owned properties, which account for one of every three homes sold in Houston (and nationally). If the houses sell, KB will build them in other cities, targeting renters in all markets. The houses will yield higher-than-usual margins, KB says, because they have siding instead of brick and Formica countertops rather than stone. Bathrooms are lined up vertically to save copper pipe. Will the homes lure renters anticipating further home-price declines and a weak job market? KB chief Jeffrey Mezger says the mini-houses are a return to his industry's roots in post-World War II communities such as Levittown, N.Y., where 800 square feet was a typical home size. "Any time there's been an age of exuberance and then the economy turns," he says, "people get back to 'What do I need?' rather than 'What could I buy?'"

—By Christopher Palmeri, Edited by Deborah Stead