Tsuyoshi Numagami

The evolution of organizational routines among large Western and Japanese firms

Students of innovation and evolutionary economists have long recognized the significance of organizational adaptation, as a consequence of changes in production technology and adoption of technological innovations and in understanding transformation of firms in competitive environments. But changes in organizational structure and procedures of firms remain largely unexplored. The paper explores the adoption and adaptation of new structural and procedural organizational routines and emerging dominant managerial practices, and their relations with technological innovation activities. Drawing on a large-scale survey of organizational characteristics in large European, Japanese and US firms between 1992 and 1996, we map the emergence, diffusion and adaptation of new organizational routines. The analysis identifies firms that show high adoption of organizational routines and firms that leapfrog the leading edge companies. We find a high movement of Western firms toward the frontier previously defined by Japanese managerial practices. We also find a strong association of high R&D intensity with the adoption of new routines in European and American firms, but not in Japan. Overall the analysis supports a dynamic view of adoption of emerging organizational routines and finds an evolutionary pattern of imitation and selection of such routines.

Innovative Forms of Organising in Europe and Japan

Recent writing on contemporary organisations is suggestive of extensive moves to create more responsive and flexible firms. Such claims often rest on studies of exceptional organisations or atypical sectors. Drawing on large-scale surveys of organisational innovations in Europe and Japan, this paper finds widespread but not revolutionary change in terms of organisational structures, processes and boundaries. In comparing innovative forms of organising in 1992 and 1996, the survey results show some similarities in the direction of change between European and Japanese organisations but from different starting points. The pace of innovation is generally much faster in Europe than in Japan. This pattern of more incremental change in Japan and more radical change in Europe is overlaid by a tendency for firms in both regions to seek new forms of organising by simultaneously altering their structures, processes and boundaries. Managing such a complementary change agenda is creating real process challenges for European and Japanese organisations.

Flexibility trap: a case analysis of U.S. and Japanese technological choice in the digital watch industry

Abstract This paper examines the widely shared belief that a flexible system of transactions is faster in adapting to major technological change than an inflexible system. Borrowing some ideas from Elster ( Ulysses and the sirens , 1979; Explaining technical change , 1983; Nuts and bolts for social sciences , 1989, Cambridge University Press, Cambridge), this paper contends that the flexible system may lead to a myopic selection of technology, because it delays the technological turning point if the important part of the technological evolution is generated by the aggregation of the choice patterns of firms. This paper investigates the case history of technological choice in the U.S. and Japanese digital watch industries in the 1970s. The papers conclusions beg a reconsideration of current and previous thinking on industrial policy and technology strategy.

Organizational Deadweight and the Internal Functioning of Japanese Firms: An Explorative Analysis of Organizational Dysfunction

In this chapter we examine a cause of organizational dysfunction from a new perspective. Some researchers have insisted that excessive bureaucratic management such as emphasis on a priori planning is ineffective. In addition, others have discussed that Japanese firms adopt an alternative system which incorporates plenty of “organic” characteristics and promotes proper emergent strategy and innovation. However, the Japanese management system can also have serious side-effects. Massive efforts for coordination among members are required and valuable resources are uselessly dissipated, when organic characteristics are excessive in an organization. For discussing the issue, we propose the concept of “organizational deadweight,” critical interference with efficient and effective management in an organic system. Inside quantitative and qualitative data of business units was collected in some major Japanese firms. The results of the analysis show that the “organizational deadweight” has significant relationship with important organizational characteristics, and imply that a balance between mechanical characteristics and organic ones is the key to manage a business organization.

Boundaries of Innovation and Social Consensus Building: Challenges for Japanese Firms

This paper addresses challenges for Japanese firms in innovation, draw- ing on a framework to categorize innovation by its boundary and our understanding of organizational characteristics of Japanese corporate systems. Innovation can be categorized into four levels by its boundary, that is, the scope of changes to be involved. Four levels are of innovation within component, innovation between components (within product), innovation between products (within market), and innovation between markets (within institution). When the boundary of innovation is limited, necessary coordination could be made within a small group of people. Japanese firms are more likely to succeed in such innovations, since they have advantage in frontline-led consensus building based on long-term employment and inter-firm relations. Once the boundary of innovation exceeds such limited scope, particularly across two or more different markets, however, political reconciliation of different interests or charismatic leadership is necessary to build a consensus among heterogeneous social actors.