The dependence of Japanese multinational corporations on overseas operations has been steeply increasing in terms of growth and profitability since the beginning of the 21st century. Especially Asia, including China, has a greater influence than ever before. This paper is designed to review the top twenty companies of each year in terms of operating profit in Asia for the past ten years (fiscal years 1996-2005) and to focus, as case studies, on the representative fifteen companies that have been showing sustained growth and firm profitability. These fifteen companies have strength of their own in Japan, their home country, and/or in host countries of Asia in the fields of production engineering, cost competitiveness, procurement, research and development, marketing and sales, finance, strategy regarding international division of labor and so on. The key factors for high profitability of these companies are summarized in nine points. Amid the fast growing interdependence between ASEAN countries and China and dynamic changes in Asia's management environment, three basic strategies need to be adopted, namely a strategy for Greater Asia Region integrating ASEAN countries and China, drastic restructuring and integration of existing production bases, and creation of global Supply Chain Management (SCM). The profitability of Japanese multinational corporations in Asia is at the crossroads either to further increase or to decline under the severe international competition.

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The Chinese economy has developed rapidly and its larger presence has been recognized in the world economy in recent years. This paper addresses the growing Chinese economy and its changing relations with East Asian economies. Firstly, we discuss changing composition of goods in Chinese international trade over the last two decades. Secondly, we look at changing trends in foreign direct investment (FDI) into China as well as from China. FDI to overseas by Chinese firms assisted by the Chinese government's “Go global” policy has developed rapidly since the end of the last century. Thirdly, we analyze Chinese economic relations with other East Asian economies in terms of competition and complement of business.

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In this paper, we examine how the Southeast Asian economic structure has changed since the Asian economic crisis. Three aspects are considered: the resurgence of the Chinese economy, upheaval caused by regionalism, and the emergence of civil society. Southeast Asia should face Chinese economic growth and respond to it positively. An ASEAN-China Free Trade Agreement is one of the answers to the question of whether Chinese resurgence can become good news. Southeast Asian countries are attempting FTAs with countries outside of the region. Making FTAs global would generate the seeds of growth. In Southeast Asia, the dominance of civil society is strongly connected with the equalization of income distribution and political democratization. Increasing maturity of civil society will enable Southeast Asian countries to become more democratic and more efficient.

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This paper discusses some aspects of industrial development in India since the 1990s, particularly focusing on the knowledge economy in the context of the global economy. India has been pursuing an economic policy different from that of most of East Asian economies and did not get into a business wave on globalisation until the mid-1990s. As is well known, the share of manufacturing to total GDP has been stagnant at 15-16 per cent during Indias period of high growth since the 1980s. On the other hand, the service (tertiary) sector exceeded 50 per cent of its total GDP. The software and ICT-enabled service (ICTES) sectors are the sectors which are fast growing, earning a large trade surplus and employing more than one million people. One issue this paper is focusing on is the low level of Research & Development expenditure in India. Recently, more and more multinational companies have been entering into various business areas in India and building Research & Development centres there, which is putting Indian firms into more competitive circumstances.

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This paper focuses on innovation strategies used by major automobile makers. Using results of fieldwork in Japan, Korea, and India, it will analyze so-called catch-up generations to consider whether global localization investment has been a condition for being a leading company. Two examples of catch-up generations are considered. Hyundai Motor took about three decades to catch-up with Toyota, after Toyota took about three decades to catch up to Ford Motors. Henry Ford, Sakichi Toyoda and Ju-Yung Chung, as later arrivals to the automobile industry, passed on innovative manufacturing know-how to their family descendants who have cultivated those traditions into new managerial resources. The distinguished traits are entrepreneurial intent to create self-subsistent business, family-owned corporate succession, and well-articulated “management life cycles” of the preceding two factors. Some Japanese and Korean makers under cumulative deficit sought help from foreign investors. This became a turning point for what are now global companies like Toyota and Hyundai. But extraordinary changes have been occurring recently; Tata Motors bought a Daewoo truck plant, while Shanghai Automotive acquired Ssangyong Motor. These cases are worth observing to see what performance they will show both in domestic and foreign markets. The paper suggests that localization investment strategy usually relies on a flexible division of labor anywhere around the world.

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The objective of this paper is to redefine the corporate strategy in terms of corporate theory. These days, Asian countries are making dramatic economic progress, with influence extending all over the world. Common problems, including energy, terrorism, ecological issues, and so on are a concern now and for the future, and must be addressed. However, at the same time, companies have to compete with other companies in the growing market. The economic environment has become complicated. Not only the conventional interested groups but newly powerful organizations have emerged. In situations in which there are a lot of interested parties and influential groups, how should corporations make decisions? Corporations need some criteria for making decisions. The purpose of this paper is to present three criteria for determining corporate action based on corporate theory.

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Based on the analysis of characteristics of the die industry and a field survey in East Asia, this report describes the current state of the international division of production process and products with the Japanese headquarters of a Japanese die company going into East Asia in terms of production process and products, the decision factors regarding international division of labor, and the future role for Japanese companies. For production process, the local factories in East Asia produce CAD as well as NC data that will be transmitted to Japan, whereas when it comes to division of production, the headquarters in Japan remains as an exporter of the die even though the products indicate “Made-In-Market”. However, there has been expansion in the capability to locally develop, design and produce products in East Asia. As a consequence, the die industry in Japan should produce the products that are technically difficult, that require some sensitive works, a limited date of delivery, and integration in design and development with the user industry in Japan.

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This paper demonstrates the application of option-based analysis in the case of a crude oil exploration project. We show that the traditional Net Present Value (NPV) does not capture all the opportunity values. Despite a negative NPV of forecasted cash flows, the projects inherent flexibility and strategic potential justify its undertaking. The Real Option analysis helps to gain a better understanding of the relative importance to project value of various elements of operating flexibility. This paper presents the possibilities and implications of applying option-based analysis for crude oil exploration in Vietnam. We demonstrate the results of an interview survey with company executives of The Nippon Oil Exploration Limited.

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Many research works in the past have shown that the skill formation of workers has been regulated by business management, such as human resource management and production management. Human resource management refers to the wage level, the promotion range, the ways of recruiting laborers, the criteria for promotion, and the turnover rate of workers. It is related to the incentives for laborers to improve their skills. Production management refers to the extent of job rotation, the quality control capability of workers, and the allocation of workers. Both of these kinds of management are expected to upgrade the skills of workers. However it is supposed that attitude, behavior, and consciousness of workers will be closely related to the skill formation. This paper argues about those effects which variables on the worker side such as job satisfaction, commitment to the firm, and attributes of workers exert on skill formation through research sampling workers employed in Japanese and Bangladeshi companies.

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This paper surveys the current status of the screw manufacturing industry in Taiwan. The industry has the following characteristics. First, a screw is a product mainly manufactured by medium and small-sized factories. Second, most of these factories are located in the southern part of Taiwan and form an industrial cluster. Third, the factories trace a similar growth path which could be described by the spin-off model. They share a common original factory established just after World War Ⅱ, and as a whole the industry developed by using a unique production network and horizontal/vertical division of labor. A screw is an essential product for manufacturing and used for a variety of industrial products ranging from home appliances to aircraft. Faced with a rapid catch-up from China, the screw manufacturing industry currently strives for structural transformation from quantity to quality. This paper also considers new challenges to further development of the screw manufacturing industry, which is at a crossroads.

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In recent years, the relationship between Business and Society has been reconsidered all over the world. It has been discussed with a focus on Corporate Social Responsibility, so-called CSR. Generally speaking, arguments regarding CSR do not have a common background, but rather various backgrounds according to country or region. However, Japan and South Korea have a common background about CSR. First, business ethics associations were established in the 1990's. Second, Japanese and South Korean executives are interested in business ethics. Third, in Japan and South Korea, globalization progressed in the 1990's, and a lot of corporate scandals were revealed along with the globalization. The purpose of this paper is to consider what kinds of differences exist in the features of corporate scandals in Japan and South Korea.

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Recognizing the increasing need for performance-based pay systems in the 21st century, a lot of companies have already introduced “performance pay systems” in Japan. Quite a number of companies are really interested in using a performance pay system, but they are still continuing a process of trial and error in introducing the system. In Korea there seems to be the same situation as in Japan. Therefore, I would like to focus on the actual conditions of the annual salary system that is the most popular type of performance pay system by making a comparative study of Japanese and Korean systems. Through this study, I would like to clarify the characteristics of the annual salary system in Japan. Trying to compare Japan and Korea in terms of the annual salary system, I will show some similarities between the two countries as follows: ① a series of reviews and streamlining of the seniority pay system have lead to the introduction of the annual salary system, ② economic crises in the two countries were good chances to start introducing the annual salary system, ③ the annual salary system has caused some problems because of poor execution of performance evaluation systems. Thus, a lot of similarities between the two countries can be indicated, while it is difficult to point out any remarkable points of difference. Though, since the Asian economic crisis, there has been a strong tendency in Korea to focus on personnel management techniques coming from the U.S.A., I recognize in this comparative study that the annual salary system of Korea is quite similar to that of Japan. I think that the wage systems of the two countries will become more similar with each other in the future.

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Since the 1990s, there has been U.S.-led globalization leading to development of an “American type of market economy.” The purpose of this paper is to clarify the global influences of such a system transplant by the U.S. In particular, this paper clarifies the economic influences of bureaucracy, the Meiji Restoration, and world political strategy toward other countries of the U.S. in the 1950s. Seemingly these factors are unrelated, but in fact they all had remarkable influence on the establishment of Japanese and Korean corporate governance structures. Assuming the above, this paper advocates the significance of analyzing the “system transplant” by the U.S. to other countries such as Japan and Korea, especially from the viewpoint of political and economic history.

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Many franchise chain retailers have been globally expanding their business, and are now targeting China as their new market. However, the Chinese market is quite complex due to its large land and population, therefore marketing strategies for the Chinese market must have adaptability. In this article, the author focuses on “Master franchise” as the marketing strategy which can adapt to the complexity of the market situation. From this point of view, the author explains some important points which may influence marketing strategy decision making by clarifying the diversity and barriers of the Chinese market. By selecting Starbucks coffee company as the company who conducts business in Chinese market, and focusing on their strategy, the author tries to clarify the effectiveness of the master franchise strategy for complex markets. Through these studies, the author tries to generate a model for international chain retailers' entry into the Chinese market.

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In recent years the air conditioner makers in China have rapidly elevated their competitive strength. I would like to point out that their competitive edge depends on not only low labor cost but also a unique procurement system. First, this paper considers how the Chinese air conditioner makers procure basic parts such as compressors, and how the procurement system has contributed to the cost advantage of Chinese firms in domestic and global markets. Secondly, this paper compares Chinese firms with Japanese firms by focusing on differences in the procurement system. Through this analysis it will be possible to clarify that the key competitive advantage of Chinese air conditioner makers is their low-cost procurement system, which is open to all basic air conditioner part makers and has relatively short transaction periods.

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This paper describes what has been happening to the automobile industry of China. It analyzes the Chinese automobile industry and its management system in the 1990s and explores its rapid growth since 2000. It also clarifies the huge influence on the industry brought on by the accelerated development of the module system in assembly industries (both state-owned and private enterprises). Based on the above, the paper will demonstrate the gradual change of strategy in the multi-national industry that has affected various manufacturing industries.

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This paper attempts to clarify the relations between Chinese auto-product management system and the entry into the automobile industry of two domestic companies, Chery and Geely. It also tries to identify those factors that impeded the development of the Chinese automobile industry and those that stimulated the sustained auto mobilization of China by the end of the 1990s. For example, the List of Company and Product (LCP) which was used to control the number of car manufacturers in China was based on an old standard of GB9417-85 which was laid down in 1989. It employed a tacit understanding of the Sedan as the standard for passenger cars without giving an exact definition of it. As a result, the mismatch between the prescribed standard and the understanding of passenger cars gave domestic companies an opportunity to sell passenger cars under registration as micro-buses. In conclusion, we will show that the LCP impeded the entry of Chery and Geely into the market, while it greatly helped them in generating their own independent R & D capacity.

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This paper attempts to analyze the corporate governance of Chinese state-owned listed companies from the following two viewpoints: 1. To clarify the reality of current corporate governance specific to Chinese state-owned companies (a mixture of internal and external governance) along with its historical background. 2. To look for new directions in the reorganization of corporate governance in China, thoroughly reviewing the problems that need to be overcome.

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