This paper proposes a field-based (“genba”-based) framework for analyzing industrial performances and trade structures. It is based on an evolutionary framework of design-based (or architecture-based) comparative advantage with a hypothesis that dynamic fit between organizational capability in manufacturing and product-process architecture tends to result in international competitive advantage of an industry (Fujimoto 2007). The proposed framework includes the following components: (i) the design-based concept of manufacturing (“monozukuri” in Japanese), which reinterprets firms’ development-production-sales activities as creation and transfer of value-carrying design information flowing toward the customers; (ii) the generic logic of comparative advantage, which assumes that a fit between country characteristics and product attributes creates competitive advantage of a given product in a given country (Ricardo 1817; Fujimoto and Shiozawa 2011); (iii) the evolutionary theory of manufacturing capabilities,, which explains ex-post rational objects without fully depending upon ex-ante rational reasoning, which explains ex-post rational objects without fully depending upon ex-ante rational reasoning (Fujimoto 1999); ; (iv) the concept of product-process architecture, originated from a theory of axiomatic design in engineering (Ulrich 1995). The paper also indicates that David Ricardo’s theory of comparative advantage (with its dynamic and design-based reinterpretation) is simple but realistic enough to explain the 21st century’s trade phenomenon in Japan and the world. While the mainstream economics (arguably after Alfred Marshall’s Industry and Trade: Marshall 1919) tended to avoid to incorporate the messy concept of industry and industrial performance in its pursuit of mathematically sophisticated theories of general equilibriums, today’s empirical studies of technology and operations management (TOM), manufacturing-oriented cost accounting, and renewed variants of classical economics may be able to collaborate for this type of genba-based industrial analysis. This paper also tries to describe and analyze a postwar history of Japanese manufacturing industries (i.e., tradable goods). After going through confusions right after World War II, the beginning of Cold War and the strategic geographical position of Japan brought about opportunities for rapid economic growth at the unexpectedly early timing. In 1950s and 1960s, “economy of scarcity” forced many of the Japanese factories and sites to build up coordination-rich manufacturing capabilities based on the teamwork of multi-skilled employees. This historical imperative subsequently brought about Japan’s comparative advantage in coordination-intensive (i.e., integral architecture) goods such as small cars and analog consumer appliances. In the 1970s and 1980s, internal and international competition became tougher due to appreciation of yen and lower economic growth, but many of Japan’s manufacturing sites (monozukuri genba) accelerated their efforts for capability-building and productivity increase for overcoming these handicaps, As a result, many of Japanese manufacturing industries enjoyed competitive advantage, Japan’s trade surplus expanded, which created trade frictions and the boom of Toyota Productiion (Lean Production) system in and out of Japan. This was an era of the “international competitions between advanced nations under the Cold War.”(View PDF for the rest of the abstract.)
Exploring small worlds in social networks using big data has been all the rage. But true estimates of how they actually work have been fraught with technical difficulties that traditional methods could not fully address. Biases due to unobserved linkages and locally contingent factors may affect outcomes, not capturing important interactions. So, how can we enhance our understanding of real social networks, small world or not? A key is to qualitatively understand in depth whether and how individuals interact in local contingencies, to form a coherent pattern that may facilitate or inhibit further collective action. To what extent, moreover, is such pattern generation a product of social norms, values and strategies shared by community members? This research directly addresses these issues with original qualitative evidence. Drawing on extensive fieldwork, we investigate, at the community level, the emerging networking patterns of Chinese entrepreneurs from Wenzhou, frequently dubbed the birthplace of spontaneous capitalism in China, whose striking economic success has been widely noted. In particular, we examine the extent to which Wenzhounese entrepreneurs’ rapid rewiring of their links with various transnational locales and the concomitant efficient network search on the basis of community cohesiveness is related to Wenzhou’s success in light of small-world network theory. We further explore a broader implication of whether small worlds can be a key to prosperity beyond individuals’ cognition and resources in wider context. This presentation constitutes one part of the three-part study to better understand the structural effectiveness of networks, the other two being at the inter-corporate (Toyota’s supply chain) and organization-unit (defense systems development teams) levels.
This paper argues an excellent manufacturer as a major player in an existing market fails to adapt to drastic change of value dimension. Drastic change of value dimension may have similar work to incumbent’s failure in Christensen (1997). In the paper, we discuss of an empirical case of fundamental change of competition circumstances in consumer portable audio player market. For long decades, Sony had strong advantage of Walkman. Brand advantage of Walkman is not an only reason of Sony’s advantage, but launching new technology at regular intervals is also the origin of the advantage. Cassette tape, Compact Disc, and Mini Disc, such new technologies had appeared in the market by turns. The new products’ advantages are basically the values from specifications and features realized by advanced technologies. Therefore, Sony had defined audio players’ value as such quantitative specifications and features. Apple has, however, launched iPod around 2000. Apple has defined their products’ value as different direction from Sony. iPod’s advantage is emotional and qualitative value from unique cosmetic design and unique user interface. Apple might not think the traditional specifications and features aren’t priority in their R&D. Changing value direction is basic and strong advantage of Apple as a new comer. This paper shows Sony might also realize Apple’s new value direction. Why hasn’t Sony adapted to that? Sony had to pile up in the existing market and expectation of existing customers. That’s the difference between Sony and Apple. The market prices of 2 brands’ products were equivalent criteria to define the R&D budget. Under equivalent budget criterion, it must be issue of allocation of resources, as same meaning as Pareto optimality, whether to invest to traditional value or to invest to creating new non-functional value. The further Sony satisfied the existing customers’ needs, they couldn’t became to invest their R&D resources into creating new value. This paper called the dilemmatic value change “product concept innovation.”
This paper examines the capital and transaction networks of the change in inter-organizational relationships of Japanese electronic equipment companies. I visualize and examine the group structures of Panasonic by social network analysis, using the data collected in 1997, 2000, 2003 and 2006. The findings of this paper are as follows. Panasonic has implemented restructuring of the business groups like that of U.S. companies after the financial deregulation in 1990s. As a result, the relative importance of Panasonic in capital network is increased while the importance of financial institutions is decreased. And the relative importance of Panasonic in transaction network is increased while the importance of Panasonic affiliated firms is decreased. From the short and middle- term perspectives, the reforms of Panasonic which improved the efficiency of management led to this firm’s business recovery. However, it is criticized that Panasonic couldn’t rebuild the competitiveness through the development of new products from in the long-term perspectives. For future work, I will examine the mechanism how these changes of inter-organizational relationships in Japanese electronic equipment companies have affected co-innovation with other cooperative companies.