Abstract
This paper describes the strategies taken by Japanese manufacturing companies in response to the transitions underway in China. Japanese manufacturing companies in south China had been operating with a labor intensive production system. However, these "monozukuri" companies now face a transitional stage due to rising labor costs and the requirements of a high value-added production system. This paper reveals the current situation of eight companies and their strategies and direction of management through an analysis of interviews with management executives from eight Japanese manufacturing companies in south China. Four characteristic actions were isolated in the results of interviews. These are 1) securement and cultivation of cross-trained workers or skilled workers, 2) promotion of mechanization for a high value-added production, 3) promotion of mechanization for labor cost reductions, and 4) semimechanization and improvement of operation. The results further indicate two essential points that drive these strategic decisions. The first is whether they focus on high value-added production or reduction of labor cost. The second is the temporal amount of capital investment for the transition. These two essential points enable the classification of the four actions from the interview data.
