2000 Volume 52 Issue 5 Pages 447-466
This research examines how electronics producers locate their factories in Japan as well as the production linkages of each factory. The company that the research uses as an example is Sony. In Japan, production sites for electronics products expanded and spread outside of the traditional industrial belts of Kei-Hin (Tokyo-Yokohama) and Han-Shin (Osaka-Kobe) from the beginning of the period of high economic growth. Electronics manufacturers tried to disperse factory locations but different locational approaches were undertaken by each company. Sony created an independent subsidiary of each factory, while Matsushita Denki, Hitachi, etc., had many of their factories under their direct control. In addition, Sony does not necessarily have many factories in the neighborhood of its head office, while Matsushita Denki, Hitachi, etc., have concentrated their operations near the head office.
Sony was founded in 1946 and moved its factory to Shinagawa ward, Tokyo, in 1947. Sony then built a factory in Miyagi prefecture to make magnetic tape recorder heads in 1954, a factory in Kanagawa prefecture to make transistors in 1960, and two factories in Aichi prefecture to make televisions and cathode-ray tubes in 1969 and 1970. From 1971, it created subsidiaries in various locations around the country, while making independent subsidiaries out of many of the factories built up to 1970. The factories in Shinagawa ward and Kanagawa Prefecture (the factory in Miyagi Prefecture as well in 1992) were brought under Sony's direct control as research and development centers. Sony's factories were thus made subsidiaries in locations spread nationwide.
The reasons why Sony dispersed its factories are, first, because it implemented a principle of production near consumption, and, second, because it wanted to avoid a total production stoppage if a natural disaster affected any single location. The main rationale for Sony creating subsidiaries of each factory is that it wanted to increase the competitiveness of its factories.
Sony subcontracts the production of parts and finished goods to subsidiaries and Sony itself undertakes the control of subsidiaries and the development of products. Each subsidiary individually sells parts and finished goods to the outside in addition to Sony. Parts and materials brought in by each subsidiary are procured from various parts of Japan as well as from Asian countries. The simple assembly of products is sometimes subcontracted to companies outside which are not necessarily located in the neighborhood. In fact, there are virtually no factories which have a production linkage with a subsidiary located in the same city or town. The regional scope of Sony's production linkage is broad. However, employment in Sony's subsidiaries is localized. The subsidiary hires people in the neighborhood for jobs such as design and engineering, in addition to production.
Traditionally, Sony's subsidiaries were deployed by building a factory in the founder's home town, or through an invitation from a city or town to set up a plant. In this context, each subsidiary, once established, makes much of its interactions with the community, such as supporting the community's economic development, accepting factory tours, participation in town festivals, making its grounds available for sports events, community cleaning activities, etc.
In conclusion, Sony has subsidiaries in broadly scattered locations, with each factory having limited production linkages within the community, but makes much of its human interactions with that community.
