Success in software development is not simply “a person” or “a team” succeeding in development, but rather the execution of a smooth “shift to the next-generation” of developers, who continuously upgrade a single software product over a long span of time. In this case, different generations of developers share the source code. This paper analyzes this process using “Denshin 8 go,” Japanese free software as one example. Initially, the original creator, Ishioka developed Denshin 8 go single-handed as closed source software and succeeded in motivating users through frequent upgrades. Several years after the initial release of Denshin 8 go Ishioka lagged behind in much needed upgrades, but one user group continued to use Denshin 8 go and was eager to improve the software. He disclosed the source code to the group, which in turn carried forward the process of development. As this case shows, the viewpoint that alternate generation of developers outside of a single company is caused by success in software development is known as “open source” software development. However, the reverse is not necessarily true. That is, simply becoming open source does not guarantee successful development.

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The relationship between innovation and consumption among internet users is not uniform. This research shows different relationships between innovation and consumption in terms of the level of involvement in music from an internet survey of 1,000 music users. We measure the level of involvement in music using the two levels of components of involvement suggested by Lastovicka and Gardner (1979). For the analysis, we divide the samples into the “high involvement” and “low involvement” groups and examine each group for their relationship between innovation, indicated by “making one's own music and posting one's songs or performances on the internet,” and consumption, indicated by “average amount of money spent on music downloads per year.” The results show that there are heterogeneous characteristics among high and low levels of involvement groups in the aspects of consumption and innovation behavior. In the low involvement group, users actively innovating are also actively consuming. However, in the high involvement group, there is no clear relationship between innovation and consumption. To put it concretely, the consumption per innovating user is approximately four times more than that of non-innovating users in the low involvement group, but it is about the same in the high involvement group. In addition, the consumption per innovating user in the low involvement group is approximately two times more than that of innovating users in the high involvement group.

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In modern day Japan, an “organization” often comprises multiple, legally separate firms, although it appears as a single organization to customers and external users and may actually operate as one organization. The concept of an “organization” differs from that of a “firm.” The organization is a network or system functioning in practice, whereas the institution of a firm defines the boundary or partitions off a part of the organization by nature. Acknowledging that firms and organizations are different concepts significantly enhances our understanding and conception of the everyday scene of multiple firms functioning as one organization. Theories based on such a way of viewing organizations and firms are called “transfirm organization theories.” Theories on keiretsu corporate affiliation or supplier system, architecture-based interfirm specialization, value networks, Japanese industrial agglomeration, and transnational companies are a few examples. Transfirm organizations are created for economic reasons; however, transfirm organization theories are not concerned with the reasons to create transfirm organizations, but rather with the performance of the transfirm organization as a whole.

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This paper first presents the following as obstacles to the generational switch of industry standards: (1) magnitude of installed base, (2) ample scope for technological progress based on existing standards, (3) limited applicability of accumulated technology to new standards, and (4) lack of investment capability. Next, we examine strategies to overcome such obstacles and migrate to new standards. Finally, we analyze the cooperation between a company that advocates new standards and one that produces complementary products when implementing those standards through the case study of the family console game industry. The results of analysis demonstrate that Nintendo has a traditional self-reliance strategy, whereas new entrant Sony has a collaborative one.

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