Ken-ichi Imai and Hiroyuki Itami
We have two purposes in this paper. One is to present a general conceptual framework of resource allocation mechanisms which will enable us to analyse resource allocation both in the market and in the organization (i.e., the firm here) from a common vantage point. Our emphasis is on the mixture of market principles and organization principles in allocating resources either in the market or in the organization. Market principles penetrate resource allocation in the organization and organization principles creep into resource allocation in the market. This mixing phenomenon which we call interpenetration is essential to understanding various resource allocation patterns in the real world.
The second purpose of this paper is to apply this conceptual framework to the analysis of the differences of resource allocation patterns between Japan and the US. Our major conclusion is that the patterns of interpenetration are different between the two countries and we will try to explain why such differences emerge. We will also analyse the effects of these different interpenetration patterns on corporate behavior.
Section 2 below presents the basic conceptual framework and section 3
We are indebted to many executives of Japanese corporations whom we interviewed in our project on 'Empirical Study and International Comparison of Firm's Behavior and Organization', at the Department of Commerce. Hitotsubashi University. The project was founded by grants from the Ministry of Education.