James R. Lincoln

Organizational Learning and Purchase-Supply Relations in Japan: Hitachi, Matsushita, and Toyota Compared

This article deals with the role of purchase-supply relations in organizational learning and knowledge-creation in Japan and how such relations are currently undergoing change. Drawing on interviews with managers, it presents case studies of the customer-supplier partnerships of three prominent Japanese manufacturing firms: Hitachi, Matsushita, and Toyota. The Hitachi case illustrates in a somewhat novel way the prevailing paradigm of how long-term, high-trust supply relations in Japan enhance organizational knowledge creation, learning, and innovation. The Toyota and Matsushita cases demonstrate that the dynamics of learning are behind two very different kinds of change in keiretsu supply networks. Toyotas evolving relationship with long-term partner, Denso Corporation, appears to fit the popular view that globalization and technological change are eroding Japanese keiretsu ties. The Matsushita case, by contrast, demonstrates that these same forces of change in other industrial settings may in fact be strengthening keiretsu-style partnerships.

Japan's network economy : structure, persistence, and change

Japan’s economy has long been described as organized around or embedded in networks. In times past, the web of stable, reciprocated relations among Japanese banks, firms, and ministries was thought to play an important role in Japan’s ability to navigate smoothly around economic shocks. Now those networks are widely blamed for Japan’s faltering competitiveness. This book applies the perspective of structural sociology to a study of how the form and functioning of the Japanese network economy has evolved from the pre-war era to the late 1990s. It asks in particular whether, in the face of deregulation, globalization, and financial disintermediation, Japan’s corporate networks – the keiretsu groupings in particular – have withered away in terms both of lost cohesion and their historical function of supporting member firms in hard times. Based on detailed quantitative and qualitative analysis, the book’s answer is a qualified “yes.” Relationships remain central to the Japanese way of business, but they are much more subordinated to the competitive strategy of the enterprise than was true of the network economy of the past.

The Transformation of the Japanese Employment System Nature, Depth, and Origins

The 1990s have witnessed significant change in the Japanese employment system and in the work organization of Japanese firms. This article gives a broad overview of the changes taking place in Japanese employment and compensation practice, recruiting and promotion, and corporate organization. More than in previous postwar downturns, Japanese firms are going to great and creative lengths to reduce workforce size and costs without resorting to formal layoffs. Yet the restructurings and adjustments designed to provide this flexibility often prove under scrutiny to be less substantial than media accounts or public corporate pronouncements suggest. Frequently the changes seem in large part symbolic—signaling to the workforce the need for change in the corporate culture and for diminished expectations in a more severe economic environment.

Commitment, Quits, and Work Organization in Japanese and U.S. Plants

This comparative analysis, using early 1980s data from management interviews, employee questionnaire surveys, and personnel office employment records in 41 manufacturing plants in Japan and 45 in the United States, explores how employee commitment to the firm is shaped by organizational structure, employment practice, and other attributes of factories. The authors investigate both behavioral and attitudinal dimensions of commitment, measured respectively by quit records and survey responses. The results for both dimensions generally support the model of “welfare corporatism” as a commitment-maximizing organizational form in Japanese and American industrial capitalism. Qualifying that conclusion, however, are several noteworthy differences between the countries: unionization, formal work rules, and on-the-job training, for example, appear to have negative effects on the commitment of U.S. workers that are absent in Japan.

Rationality and Equity in Professional Networks: Gender and Race as Factors in the Stratification of Interorganizational Systems

The organizational principles of rationality and equity account for the bureaucratic leveling effect on social differences posited by Weber. An inference from this framework, that organizational systems will neither create nor reinforce inequality based on gender or race, was examined with data provided by the members of six multiagency social service delivery systems. The dependent variable was a measure of access to the networks of interorganizational exchange that tied together the agencies in these systems. This measure, called centraliy, did not vary by race or gender. However, an analysis of first-and second-order interaction effects indicated that the combinations of investments and contributions that were predictive of centrality were very different for white men, white women, nonwhite men, and nonwhite women. A complicated process of negotiation for resource and advantages was indicated that is not easily reconciled with deductions from classical organizational theory.

Power and Mobilization in the Urban Community: Reconsidering the Ecological Approach

Hawleys theory that the distribution of system power in the urban community is related to its capacity for mobilization on public issues is examined in the framework of a model specifying mobilization, the scope of municipal government, the MPO ratio and organizational dimensions of system power (employment concentration and absentee-ownership) as consequences of the citys functional role in an urban division of labor. The model treats mobilization as an unobserved variable mediating the effects of community structure on three policy variables: municipal government expenditures, urban renewal and poverty program funding. Coefficients estimated under the model suggest that, while the MPO ratio is strongly dependent on urban function and organizational structure, its direct effect on mobilization is stronger than effects produced by these factors. The model postulating mobilization is then compared with the results of separate regressions calculated for each policy variable. The data indicate that it constitutes a reasonably good fit to regression estimates where municipal expenditures and urban renewal success are dependent variables but not in the case of poverty funds. With regard to the latter, the organizational measures of system power prove more important than the MPO ratio. Furthermore, governmental scope is found to be a moderately important variable intervening between elements of community structure and policy consequences, but its influence is considerably less than that of other variables in the model. In conclusion, general support is claimed for an ecological approach which views urban public policy as the end result of a sequence of conditions originating with city size and economic function.

Economic Organization and Innovation in Japan: Networks, Spin-offs and the Creation of Enterprise

Among the many extraordinary aspects of Japan’s postwar economic growth, perhaps none is more dramatic than the nation’s move from technological follower to technological leader. Overall rates of patenting in Japan rose faster than in any other advanced economy over the past several decades, such that Japanese inventors collectively rank at or near the top of national lists of new patent holders (Okimoto and Saxonhouse, 1987; National Science Foundation, 1997). Japanese companies have also rapidly increased their technology exports. These exports first exceeded imports in 1972, and by the mid-1980s, the technology export: import ratio was approaching 2:1 (Okimoto and Saxonhouse, 1987). Even in 1994, with Japan in the middle of a recession, technology exports to the US exceeded imports by over

Dyad and Network: Models of Manufacturer-Supplier Collaboration in the Japanese TV Manufacturing Industry

14 billion (National Science Foundation, 1997).

Changing firm boundaries in Japanese auto parts supply networks

The analysis of manufacturer-supplier relationships in Japan has contributed significantly to the advancement of interorganizational theory. It has yielded broad evidence that long-term collaborative partnerships enable firms to exploit the incentive benefits of market-based exchange while reaping the learning and coordination benefits of internalization within a corporate hierarchy. In this paper, we go beyond the issues of trust and cooperation that have occupied much prior theory and research on supplier relations in considering another dimension along which collaborative agreements may be arrayed. We build on transaction and network theories respectively to propose two types of long-term collaborative ties: dyadic or bilateral governance and network embeddedness. A comparative analysis of collaborative relationships in product and process development between two Japanese TV manufacturing companies and their suppliers provides empirical evidence for the distinctive effect of network ties over dyadic relationships for collaborative knowledge-sharing.

Social Structures: A Network Approach.

The Japanese and the US business presses are full of articles about change in Japanese business practices—in particular, changes in relationships between customers and suppliers. Are closely knit networks of customers and suppliers—the keiretsu—breaking down? We argue that while there is no sign of a dramatic, abrupt breakdown in the system, Japanese automakers are beginning to rethink the make versus buy decision. Automakers are taking firmer control over some transactions while allowing others to become more arms-length. These changes are traceable to some basic changes in the transactions themselves—increased power on the part of suppliers due to changes in technology and globalization, and decreased need for customer-specific investments due to standardization. Furthermore, a sense of economic crisis has caused Japanese firms to question the value of certain business practices, and has made it easier for automakers to rethink their contracting relationships.