Recent years have seen activist investors, who claim to "reform" Japanese firms' management systems and activities by improving corporate governance, enhancing share-holder discipline, and increasing market value. These investors include investment trusts, pension funds, and private equity funds. They gain their right to make recommendations to the management by accumulating substantial stakes in undervalued firms. The shareholder activism has been studied extensively, but there is little agreement as to its systematic effects on the business activities in general. Xu (2006), for example, pointed out that some activists successfully introduced a new "discipline" into Japanese companies with financial problems. Wahal (1996), however, did not find any positive contribution of the activism to the corporate performance of American firms. This article investigates reactions of nine Japanese companies to a foreign activist investor through interview surveys, and shows that this particular investor has failed to exert any changing force on the management. ROA of seven companies increased after the activist investor had acquired large stakes, but none of the interviewees admitted any direct influence from the activist investor. Even the remaining two companies attributed their lower ROA to other factors. The foreign investor proposed to the management that they should purchase their own shares, terminate unprofitable activities, and increase salaries of the executive officers. However, the management rarely accepted these proposals. Most of the nine companies increased their dividends, but the interviewees stated that the decisions were made independently of the foreign investor. These findings suggest that the nine Japanese companies maintain long-term goals including a reasonable dividend policy and assign a priority to the benefit of their loyal shareholders, their own employees, and other partners.

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This paper's purpose is to examine empirically whether the increase in the number of outside directors positively impacts Japanese firms' long-term performance. Most prior research has analyzed empirically the relationship between outside directors and Japanese firms' performance by conducting cross-sectional regressions. Although those studies show that the percentage of outside directors on Japanese firms' boards is positively related to firms' performance in one year, they do not reveal how that percentage influences those firms' long-term performance. This paper investigates this relationship by using panel data for firms listed on the first section of the Tokyo Stock Exchange. The percentage of outside directors on Japanese companies' boards generally tends to be much lower than on American boards. One reason for this difference is that many Japanese managers have been reluctant to put independent directors on boards. Despite their desire to exclude independent directors, however, such managers recently have faced demands to increase the number of independent directors from foreign institutional investors, such as investment trusts and pension funds, which seem to think that independent directors matter in terms of boards' governance. My empirical result is important for considering whether these foreign investors' demands are reasonable. My empirical analysis shows that the percentage of outside directors does not influence Japanese firms' long-term performance. This result is not consistent with the results of prior research referred to above. This might be because outside directors are not really independent of managers in Japan because those managers, rather than shareholders, actually elect them, or because those outside directors are at a disadvantage when collecting in-house information needed to make managerial decisions, compared to inside directors, who have more firm-specific knowledge. My results do not suggest that outside directors necessarily play an important role in raising firms' long-term performance, or that they are appropriate monitors of Japanese firms' management.

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In this paper, I consider how Japanese Spinning Companies had formed the management of the worker's living process, and developed it during the Meiji and Taisho eras. Kanegafuchi Spinning Co. has the origin of the management of the worker's living process in Japan. In order to cope with the labor problems such as the worker's effectiveness and quality control, Kanegafuchi intervened in the worker's private life by providing 'the facilities for increase of human well-being' and 'the moral management operation.' Then, other spinning companies developed the various management programs that were relevant to the worker's living process. Toyo Spinning Co. employed the programs leading to control the workers as effective and diligent workers, making the workers judge the goodness of their own living attitudes, and investigating the worker's idea. Kurashiki Spinning Co. constructed the small and distributed dormitories for the women workers, and provided the system that the women workers could dine with the management in the dormitory by turns. Teikoku Seima Co. carried out the program that the women workers voluntarily confer about good act and practice it, and prepared the dormitories of self-teaching for the women workers. Then, in many companies, 'the call at the worker's home' was executed, and 'the periodical in-house newsletters to the workers and their families' were published. These management programs were aimed at, in worker's living process, manufacturing industrious workers, reforming worker's living attitude, grasping the worker's life-style and idea, making good communication between the management and the workers, and making managerial ideology penetrate into the workers. As a result, by utilizing these programs, many companies were able to solve a lot of labor problems, and gained high productivity. Therefore these programs became widespread. However these were often criticized from the viewpoint of the manipulation of the worker and worker's autonomy. Finally, I conclude that these management programs led to shape the worker's embodiment on the labor-process suitable to the companies' needs in his/her living process. In other words, they were the control devices on worker's embodiment and living process.

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The objective of this paper is to propose an analytical viewpoint for a product category including multiple product generations, such as for the VCR, TV, PC and others, which relates to consumer durables and household electrical appliances, whose lifetime is measured in decades. Most of these product categories include multiple product generations and do not always experience an alternation. For example, the VCR has three major product generations, Monaural (or standard) VHS, HiFi VHS, and Super VHS. However, the HiFi VHS product generation has been mainstream since 1988. Consumers purchase a product for the first time and the adoption rate accelerates with the passage of time. On the other hand, with the passage of more time, repeat purchases such as a purchase for multiple ownerships and for the replacement of ageing products are activated. Five hypotheses on the adoption (first purchase), multiple ownerships and the replacement of products were established and verified. Inspecting these hypotheses is the analytical view point proposed in this paper. It explains the movement of the VCR demand through its life time and it is applicable to other product categories belonging to consumer durables and household electrical appliances. This approach is very unique because recent research tends to restrict an object of study by limiting the time duration and concentrating on a certain generation, series or product for the sake of accuracy. The proposed approach in this paper can take account of the product progress and the change in consumer behavior during the product's lifetime and contribute to long range planning.

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In this paper, I clarify how firms develop products or services to cope with institutional changes and what is important for firms to be competitive through product development in a regulated industry. It is important to consider technical and market factors in product development. However in regulated industries, firms must also consider institutional factors. Nonetheless, little attention has been given to the relationship between institutional factors and product development processes. The framework of this study is based on previous studies that discuss the relationship between organizations and institutions. From these studies, I show two strategies that cope with institutional factors in product development. The first is an effective coping strategy, and the second is an institutional environment design strategy. This paper focuses on the product development of a Defined Contribution Pension to cope with changes in the legal system by a general insurance company. One of the notable features of this case is that the entry into the Defined Contribution Pension business and product development process overlap with changes in legislative processes. To describe the development process, I collected data from interviews with a product planner and project, manager of general insurance company A. The company embraced effective coping strategy and an institutional environment design strategy in this case. Consequently, the firm completed the development of the product around the same time as the implementation of the law. The main contribution of this study is it shows the importance of the strong project leader to execute these strategies. In order to develop a product rapidly under strong institutional pressure, it is necessary to cope with the institutional pressure, in addition to developing a clear product concept and coordinating a development team. For this, the firm needs a strong project leader who creates a vision of institution based on the perspectives of governments and rival companies.

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This paper explains the mechanisms how cost planning, which is the activity to achieve target costs, accelerates incremental innovations to increase the value defined as cost/function. These incremental innovations made Japanese manufacturers globally competitive. In order for cost planning to accelerate incremental innovations, function conscious engineers need to pursue strict target costs based on market price. However, excessively strict targets prevent engineers from developing new functions. Paradoxically, when cost conscious engineers pursue cost reductions without taking quality into consideration, cost planning decelerates incremental innovations to lock in "low cost and low quality" products. During the catch-up stage Japanese manufacturers went through after World War II, two expedient situations existed for cost planning to accelerate incremental innovations: 1) establishing market prices based on imported products and, 2) function conscious engineers pursuing better quality to compete with imported products. These incremental innovations accelerated by cost planning were the reasons why Japanese manufacturers were able to compete globally. However, cost planning has three reverse effects: 1) "low cost and low quality" products, 2) over-quality beyond customers' expectation and, 3) barriers against developing new functions. Although Japanese manufacturers were able to escape "low cost and low quality" products, they are still struggling with over-quality and barrier of new products. The over-quality allowed new manufacturers to enter the low price markets in developing countries. Barriers against developing new functions are weakness of the Japanese manufacturers. Cost planning enabled Japanese manufacturers to compete globally during the catch-up stage; however, they are currently faced with its reverse effects. Japanese manufacturers need to consider a new vision of looking beyond price/function.

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