Takashi Hikino

The Bark Is Worse Than the Bite: New WTO Law and Late Industrialization

In spite of (or because of?) the successful industrialization of leading latecomers under a set of institutions that had deviated from free-market norms, by the 1990s the global economic order had formed around rather orthodox neoliberal principles. At close examination, however, the new rules of the World Trade Organization, a symbol of neoliberalism, are flexible and allow countries to continue to promote their industries under the banner of promoting science and technology. The success formula of late industrialization—allocating subsidies in exchange for monitorable, result-oriented performance standards—is still condoned. The problems bedeviling latecomers today are not formal legal constraints but informal political pressures exerted by North Atlantic economies in favor of radical market opening. Latecomers lack a vision to guide them in responding to this pressure.

Corporate Groups and Open Innovation: The Case of Panasonic in Japan

This chapter examines the struggling transformation process of a Japanese corporate group from its conventionally adopted closed technological innovation model to open innovation. The chapter incorporates the structural feature of corporate groups, an operational model characteristic of large Japanese companies, as the critical mediating variable that influences the organizational choice of conventional closed and novel open innovation processes. The corporate group is the organizational design implemented by a firm with the strategy of related diversification that adopts the consequential structure of multidivisional form but recognizes the strategic and operational autonomy of those operating divisions.

Changing Ownership and Governance Innovation

The corporate governance practices of large Japanese enterprises were a focus of controversy during and after the rapid rise of these enterprises to international prominence in the 1980s. The perception of Japanese governance mechanisms at that time stands out as the antipodal opposite of the current thrust for the ‘global’ standards. The popular view at the height of Japan’s economic power was that top executives in Japan, with no distracting interventions from pesky shareholders, exercised their discretion to target long-term efficiency-enhancing goals, to the profit of employees, shareholders, and other stakeholders. According to this view, the agency costs of managerial autonomy should be adequately compensated by the knowledge capital accumulated in and utilized by salaried management. In the US, on the other hand — according to the conventional view at the time — shareholders pressured salaried managers to maximize short-term returns at the expense of their firms’ economic health, thus ultimately harming the competitiveness of US industry in the 1980s.