Does nationality continue to matter?

Our study of the evolution of Japanese and US production networks in theelectronics industry in East Asia in the 1990s has enabled us to identify how various forces that we associate with globalization—technological change, technology transfer, the shortening of product life cycles, trade liberalization, and the development of local centers of expertise—have shaped corporate decision-making. By focusing on change in one sector over a period...

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The impact of the Asian financial crises

How have the financial crises that beset East Asia in 1997–8 affected the evolution of IPNs in electronics? It is too soon to discern the longer term effects that the crises may have on the evolution of local industries. Some immediateeffects that may have an impact over the medium term are, however, apparent. Most worrisome is a significant erosion of the region’s small and medium-sized suppliers  Global OEM customers such as Compaq...

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Imitation and convergence

A final reason for the gradual opening-up of Japanese production networks is that some Japanese firms have consciously set out to imitate what they perceive to be successful strategies by their American counterparts. This desire for emulation not only characterizes the large, diversified business groups like Matsushita, Hitachi, Toshiba, NEC and Fujitsu but also medium-sized companies that have become global competitors like Kyocera, Canon,...

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MNC affiliate behavior in Malaysia

In this section, we will review the available data on affiliate behaviors on five dimensions: linkages to local firms, human resources development, higher valueadded activities, capital deepening, and management autonomy. Each subsection will provide background on relevant Malaysian policies, after which the available evidence will be used to provide a preliminary evaluation of the hypothesis of national differences between investors. Capital...

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Explaining national differences in production networks

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...

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The opening up of Japanese production networks

Some of the observed differences in organization of production networks are explained by the very different product mix that Japanese and American electronics firms  shifted to Asia. From the late 1960s, American firms in Asia concentrated on ICs and PC-related products, whereas Japanese firms, almost without exception, focused on lower end consumer electronics and related components. Microprocessors and PCrelated products are highly differentiated...

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Competitive performance of US versus Japanese electronics firms

As argued by Michael Borrus in older article, the different production network strategies of US and Japanese electronics firms in East Asia are likely to have had a causal impact on their global competitive performance. Although it is not possible to make causal inferences about competitive performance at the global level from financial performance at the level of subsidiary operations in Singapore, it is interesting to note that US electronics...

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Management localization and autonomy

In the early 1990s, Japanese subsidiaries in other parts of Asia were far less likely than their US counterparts to employ local managers, to employ local personnel in senior technical roles, or to have nationals of the host country on their boards. Even where firms employed local managers, they were often “shadowed” by Japanese personnel and relegated primarily to the performance of public relations roles for the company. In their study of...

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Growth of Singapore’s electronics industry

As described elsewhere in this article, several East Asian countries outside Japan have emerged as major production platforms for the global electronics industry since the 1970s. Driven by global competition, firms from advanced countries in general and US and Japanese firms in particular have increasingly extended their supplier bases and production networks to the various countries in East Asia. In 1993, the four Asian NIEs, ASEAN, and China together...

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Samsung’s network in China

Samsung’s network in China is actually divided into two relatively separate pieces, one of which is located at Tianjin, and the other in Guangdong Province. A new electronics complex has recently been announced for the Singaporesponsored Suzhou Township, located about halfway between Samsung’s southern and northern China plants. In the early 1990s, Samsung selected Tianjin, which is close to Korea, as a strategic FDI location. SEC rapidly set up...

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Samsung’s production networks in Asia

Asia has been an important destination for Samsung’s direct investment for a number of reasons. In addition to the company’s interest in recovering cost competitiveness by utilizing the low-cost resources available in Southeast Asia, it was also pursuing some of the major customers for its components as well as some of the world’s most dynamic markets. A Singapore based purchasing office was established in 1991 to speed up the internationalization...

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Internationalization of production

Although Samsung’s organizational strategy for the 1990s revolves around consolidation, the strategy for its physical production facilities involves increasing movement offshore Samsung’s earliest overseas production efforts were a Portuguese joint venture  operation started in 1982, a US subsidiary established in 1984, and a subsidiary set up in Mexico in 1988. They had competencies in the production of CTV sets and many core components....

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Samsung in the 1990s: challenge and response

The 1990s have presented Samsung with a number of challenges requiring adaptive strategies. The key strategic shift is from “quantitative” to” ‘qualitative” growth. This has been manifested in a series of organizational reforms and in new approaches to technology management. Another major thrust of recent years has been an increasingly aggressive globalization of production. Declining competitive advantage leads to organizational Restructuring In...

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