Chihiro Suematsu

Interface from Transaction Cost Approach

Two decades ago, Oliver E. Williamson defined a transaction as the transfer of a good or service across a technologically separable interface, and yet the characteristics of interfaces have not been studied by transaction cost economics researchers. Another related concept is that of the module which is commonly defined as a unit sharing multiple interfaces in order to interact, integrate and combine, or be substituted, redeployed, transferred, and suplanted; but the term interface is referred to in very few studies of modularity. The purpose of this research is to describe and understand further the transaction mechanism related to the notion of interface (transaction interface). The analysis of transaction costs, institutions, and organizations from the perspective of the interface is proposed. We believe that the importance of studying interfaces has been increasing with the proliferation of economic activities over the Internet. Governance mechanisms existing beyond markets and organizations may likewise be explained by focusing on various interface aspects.

Considering Cultural Issues of ERP System Utilization: A Company-Based Perspective

Some data show that the effect of investment in Enterprise Information System (EIS) is not high enough in Japan compared with the levels in the United States and other Western countries. Moreover, Japan is facing major changes in the business and IT environments. With global business expansion, improving operational efficiency at the global level using information technology (IT) has become one of the most important issues for companies. The Enterprise Resource Planning (ERP) packaged system, or ERP system is one of the options used for re-engineering global information systems in many countries. In this paper, the authors present results concerning the effect of implementation of ERP system. The analyses focused on the context of the global expansion of companies and the effects of customization of packaged software functions. Business Process Re-engineering (BPR) issues when implementing ERP systems are also discussed in this paper, regarding cultural issues specific to Japanese companies.

Issues about Inter-organizational Process Flow Adjustment in Business Process Modeling

Expectations of top management regarding information technology (IT) are said to be increasing. However, research results have shown that the dissatisfaction level of top management is high. 52.3% of top management personnel said “rather dissatisfied” and 5.7% answered “definitely dissatisfied” to a question (4-point scale) about the satisfaction with the information system of their companies [1] in Japan. This means about 60% of top management are unhappy with the information systems of their companies. From the survey results analyzed by the authors regarding process defining decisions, it is possible to assume that attempts to adjust and align an appropriate decision with understanding of its difficulty impact on the effect (satisfaction) of the information systems [2]. In this paper, the authors discuss business process modeling methods from the viewpoint of adjusting the needs and requirements of several perspectives (e.g. the satisfaction of top management and end users, efficiency of business process, and maintenance and control), regarding the issues of business process modeling for Japanese companies.

E-Business Process Modeling Issues: From the Viewpoint of Inter-organizational Process Efficiency and Information Sharing

Abstract E-business process modeling is an important factor in developing schemes of e-business. In order to develop schemes of e- business in or among firms, they have to reform their business process and information systems, considering changes that enable the companies to achieve new value. In this paper, the authors overview related works on developing e-business schemes, consider issues concerning e-business process modeling issues especially for Japanese companies bearing in mind their management style, and propose the idea of a modeling tool for supporting inter-organizational process flow adjustment.

Transaction Cost Analysis of the New Drug Application Process A Case Study of a Multinational Pharmaceutical Company in Japan

The aim of this study was to measure the transaction costs of a new drug application (NDA) process in Japan in a case study of a multinational pharmaceutical company. The NDA process was viewed as involving transactions among 3 organizations: the headquarters, the Japanese subsidiary, and the Pharmaceuticals and Medical Devices Agency. Transaction costs were calculated by multiplying the time for each transaction by an hourly wage. Work time for the NDA process totaled 14,710.6 hours and was estimated to cost US

Consideration of the Business Process Re-Engineering Effect: Business Flow Notation Structure and the Management Perspective

558,000 in human resource–related expenditure in the company. The total time for intracompany transactions was 7662.5 hours (52.1% of all transactions), which was similar to that of transactions with the Pharmaceuticals and Medical Devices Agency (7048.1 hours, 47.9%). Also found was a press-and-slack procedure in time course observation. In conclusion, the current NDA system in Japan imposes a considerable time and cost burden behind that of the visible official process on a multinational company.

Inter-organizational Process Flow Adjustment: Applying Multi-layered Process Flow Adjustment Tool

This study considers the manner in which business process modeling (BPM) effect the business process change such as business process reengineering (BPR) or business process improvement. The expectations of top management regarding information technology (IT) are considered to be increasing, therefore BPM with IT implementation is becoming increasingly important. Although Japanese firms tend to spend much more on improving business operational efficiency compared with firms in Western countries, however, the results do not seem to be effective enough [1]. One of the reasons for this situation is considered to be the Japanese style of business process change. The authors analyzed this issue by the results of a survey that the authors had conducted on BPM methods and the effect of business process change.

Methodologies for Designing and Managing Interfaces, Modules, Standards, and Processes

The role of enterprise information systems (EIS) is becoming more and more important, and therefore the expectations of top management regarding information technology (IT) are said to be increasing. However, research results have shown that the satisfaction level of top management is not high enough, actually about 60% of top management are unhappy with the information systems of their companies. One of the reasons for this situation is considered to be the method of business process modeling (BPM) [6]. In this paper, the authors propose a business process modeling tool appropriate for Japanese companies. The concept, architecture of the tool, and evaluation result are also described in this paper.

Transaction Cost in Economics

Throughout this book, the essential commonalities among organizations—interfaces,1 modules, and standards—have been explored. Module structure is determined by interfaces rather than the module body. A standard is defined as a condition under which interfaces are shared by the majority. Processes correspond to interfaces per se. For these managerial devices, which are essentially identical, common design methodologies should be applied. As discussed thus far in this book, transaction costs are reduced by the development of interfaces, but the results would be very different depending upon the technologies of the design and operation of interfaces.

Transaction Interface: Organization, Process, and System

This chapter will set out to explain economists use the concept of a transaction cost. Central to the concept of transaction costs is the field of study that is called transaction cost economics (TCE). It is important to recognize, however, that TCE treats transaction costs in a different manner than this book does. From the title of the study, one might think that TCE is all about measuring and minimizing transaction costs, but this would be quite misleading. TCE does not even deal with transactions and transaction costs per se, as this book has been proposing, but instead addresses the purely economics-oriented question of how governance structures are selected to counter opportunistic behavior. Here governance structures refer to whether a company manufactures internally, manufactures within its family group, vertically integrates, or buys from the market.