Why did such significant differences exist between
Japanese and US production networks in the first half of the 1990s? Social
scientists naturally assume that organizations, including firms, adopt policies
that enable them to pursue their goals in an efficient manner. A large
literature, however, warns us against such assumptions Historical accidents and
path dependency are pervasive. Such factors certainly played a role in the
differences that we have observed between the production networks. But rational
choices also explain the relatively closed nature of Japanese networks. We suggest
five principal reasons for the differences in approach: the perceived advantages
of the keiretsu networks of Japanese companies; the relatively late
start of Japanese companies in export-oriented manufacture in electronics in
Asian subsidiaries; corporate governance issues especially financial control;
differences in the product mix; and the geographical proximity of Japan to
Southeast Asia and China.
Perceived advantages of Japanese corporate networks
A large literature exists on the potential efficiencies that come from
Japan’scorporate networks In a period when companies faced new challenges in
establishing export-oriented subsidiaries in other parts of Asia, it was
natural that they should rely on familiar methods and linkages. Intra-firm
trade enables corporations to exercise tight control over their subsidiaries,
supply sources, and markets. By encouraging their traditional keiretsu
suppliers to re-locate close to the new plants, the assemblers maintained
linkages of proven worth. They also avoided the potential domestic
embarrassment that may have arisen had they been perceived to be abandoning
their long-standing commercial allies.
Japanese networks as latecomers
The importance of existing network ties was magnified by
the urgency with which Japanese companies had to re-orient their production in
the mid-1980s faced, as they were, by rapidly escalating costs and by an
increase in non-tariff barriers in the United States and Western Europe.
Although Japanese electronics companies began overseas production in East Asia
much earlier than their US counterparts, domestic market-oriented, rent-seeking
production rather than export platform production remained the dominant focus
until the mid-1980s. A quick response on a massive scale then became necessary
to meet the challenge not only of the rapidly appreciating yen, but also of new
competitors from Korea and Taiwan. We know from
innovation theory that firms need time to develop
their capabilities.15 Time is of even greater importance for developing a firm’s capacity
to manage international production, hence the importance of the “vintage
factor.” Stopford for instance, argues that firms progress over time from the
simplest to more complex forms of international production networks as they
learn how to manage them. Such learning also takes place in the foreign
affiliates: as skills and resources accumulate within the various foreign units,
new options and more complex projects can be undertaken without relying
heavily on the parent
organization for help and guidance 16 Developing local capabilities and
linkages through “trial-and-error” is a timeconsuming process. Latecomers to
international production are likely to differ in their organizational
approaches from firms that have had a much longer learning experience. As latecomers to international production for export,
Japanese firms minimized risks by centralizing management control in the parent
company, and by relying heavily on the parent and other long-standing partners
for the supply of capital goods and components. They did not have the luxury of
engaging in the timeconsumingprocess of developing local capabilities and
linkages through “trial and error” procedures. The then relatively low levels of
technological and productive capabilities of most Southeast Asian economies magnified
the risks of doing so. As production was to be for the global market, quality-control
considerations were paramount. With the switch to export-oriented production
in the late 1980s, Japanese networks became more closed than previously. As
noted, the share of components sourced from Japan increased. On one
dimension, however, the move to export-oriented production brought Japanese
networks closer to their US counterparts: Japanese companies increasingly insisted
on majority control of their ventures. Previously, pioneering Japanese investors
in the region, such as Matsushita, had been willing to enter minority joint
ventures.
0 comments:
Post a Comment