Academic journal article Management International Review

A Comparison of Japanese "Hybrid Factories" in U.S., Europe, and Asia

Academic journal article Management International Review

A Comparison of Japanese "Hybrid Factories" in U.S., Europe, and Asia

Article excerpt

Introduction

The leading Japanese auto and electronics multinational firms established their world-wide network of local production activities by the early 1990s in particular in the three major regions i.e. North America, Europe and Asia. It is especially interesting to see how earnestly these Japanese firms have been trying, with several dynamic waves of foreign direct investments (FDI) strongly urged by the trade frictions and the volatile but "endless" yen-application, to transplant their management and production systems to the local plants abroad. This means that for only the past ten years the Japanese-style production technologies have been transferred and are spreading out almost everywhere in the world.

It could be safely said that we have never seen in the world's economic history this kind of concentrated global technology transfer from one country to the rest of the world: as many as ten assembly makers each, and more than ten parts makers each, in the auto and electronics industries are all at once operating their important overseas plants in many countries, at least in the major three regions. Of course, we know the American multinationals have spread out to various countries in large scale since the end of 19th century, particularly after World War II. But, in terms of number of firms in an industry and range of region, only a few American and European auto and electronics multinationals have been comparable to Japanese ones: GM, Ford and Volkswagen, and IBM and Philips are among a few special cases which have more or less set up manufacturing bases globally (Annual Reports, News, and so on, of each company), but most of them do not have important production plants in developing countries, compared with Nissan, Toyota, Mitsubishi Motor and Suzuki, and NEC, Fujitsu, or Matsushita, Sanyo, Toshiba, and so on.

Our joint research group, Japanese Multinational Enterprise Study Group (JMNESG), has been implementing the research on transferability problems of Japanese style production system at the subsidiary (and joint venture and technology cooperation agreement) plants abroad, mainly in the U.S. (Abo 1994a), and recently in the South East Asian countries. Some of its members, including myself, have conducted research in Europe as well (Abo 1992, Itagaki 1994, Kumon 1992 and 1994). Since the 1980s, Japanese management and production systems have attracted world-wide attention as techniques and methods that can be introduced to foreign countries in order to outperform the existing U.S. or European type technologies.

Analytical Framework and Methodology

The focal point of our research is that the human factor, that underlies and provides strength to these systems is intimately related to historical and cultural characteristics of Japanese society (Abo 1994a, Ch. 1, 2). This raises the legitimate question of whether such systems are able to survive the transfer to a foreign environment. We have tried to reveal the precise extent to which production systems observed at the parent plants in Japan are implemented at the subsidiaries located in foreign countries. In this paper, I will compare such evaluations in the above three regions by using the data on the cases of three companies (see Note 2 of Table 1).

The international transfer model constructed in order to determine the extent to which these systems are introduced and applied at the foreign subsidiaries is the application-adaptation ("Hybrid") model. The application-adaptation model emphasizes aspects of the production system related to vital elements for achieving high product quality and efficient production over a wide range of operations, through a strong sense of identity that employees feel with the company, and through flexibility deriving from "worksite-oriented operations". Our hypothesis is that, when Japanese firms "apply" their technological advantages to foreign countries, they will face problems in "adapting" to local environment. …

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