The production of an automobile requires the assembly of over twenty thousand parts. Automobile manufacturers do not make such a large number of parts within their own firms but purchase, to varying extents, some parts from suppliers. Therefore, the purchasing policies and relationships with their suppliers have considerable effects on the quality and cost of their final products. Japanese automobile manufacturers organise suppliers in a hierarchical order: its first-tier suppliers form a Kyôryoku-kai (Cooperative Association of Suppliers). First-tier suppliers in turn organise second-tier supplier groups. The Japanese automobile manufacturers claim to maintain long-term relationships with their suppliers and tc, cooperate closely. This is often claimed to be the opposite to American automobile manufacturers' approaches to suppliers: they do not organise suppliers in a hierarchical order; and they often purchase parts on a spot-price basis, without developing long-term relationships and close cooperation with suppliers. This paper traces how the existing inter-firm relationships were evolved at Toyota, the largest automobile manufacturer in Japan, and also elucidates what “close cooperation” between an automobile manufacturer and its suppliers means for the suppliers. After presenting the historical evidence. this paper comes to the conclusion that: Toyota's managerial efforts shaped such peculiar inter-firm relations; Toyota developed and refined its own monitoring system over suppliers; confident with its monitoring system, Toyota transferred it to its first-tier suppliers, hoping they in turn could monitor the second-tier supplier group; Toyota and its suppliers cooperated closely. but Toyota always monitors suppliers' performances closely in terms of cost, delivery, quality and other factors; with such a monitoring system, Toyota facilitates competition among suppliers, who compete vigorously against one another to obtain more orders from Toyota and show their superiority over the others.
This paper analyzes business ethics both in the period of the Industrial Revolution and during the decline of the British economy in the late nineteenth century. It begins by discussing the social strata from which businessmen emerged and the kind of opportunities which they made use of in doing their business. There have been lots of arguments on the origin of entrepreneurs and their business performance, but according to recent studies, entreprenuers tended to come not from the bottom but from the middle of society. The motives of entrepreneurs in the Industrial Revolution were described in the works of Samuel Smiles. His most popular book was Self-Help, published in 1859. His idea derived from Adam Smith's concept of laissez-faire. Smiles worked in railway companies as a secretary for more than twenty years, while he wrote various books and articles. It is interesting to compare his ideas as set out in his books with his actual performance, as the companies became larger and their organization more bureaucratic. The question is why businessmen's spirits flagged at the end of the nineteenth century. I analyze first the social structure in the late nineteenth century and then the changing patterns of business ideas, recently well summarized by M. J. Wiener. Indeed his viewpoint is widely accepted in Japan as well, but I criticize it with the help of the arguments of P. Payne and W. D. Rubinstein which pay attention to historical factors neglected by Wiener. This paper examines critically current discussions on the topic of British business ethics, and reconsiders the stereotype of the British businessman which has become a handed-down orthodoxy in the Japanese academic world.