Market Adaptation by Foreign-Owned Subsidiary:

Hybrid Management System for Innovation

Abstract

The aim of this paper is to examine the management systems of foreign-owned Japanese subsidiaries. When entering the Japanese market, foreign-owned companies need to acquire the social capital to become collaborators, but this requires a great deal of effort. This is because domestic rivals have already established relationships with such external actors. This paper examined the management system that foreign-owned Japanese subsidiaries have in place, how it functions, and how they utilize social capital. The research method is based on a organize and analysis of publicly available secondary source. The target of the research is Johnson & Johnson. By unraveling a case study of their business expansion into the Japanese market, I examined whether a hybrid U.S.-Japanese management system functions and acquires resources that belong to social capital. As a result, I argued that foreign-affiliated Japanese subsidiaries can utilize the social capital necessary for business expansion through their unique management system that combines the “characteristics of capturing and meticulously responding to external information” of Japanese companies and the “characteristics of targeted and rapid investment” seen in American companies.