W. Mark Fruin and Masao Nakamura
This paper aims to present a general review of the circumstances of America and Japan's rapid corporate, economic and industrial development in the twentieth century.
Abstract
Purpose
This paper aims to present a general review of the circumstances of America and Japan's rapid corporate, economic and industrial development in the twentieth century.
Design/methodology/approach
The approach considered and evaluated how the circumstances of America and Japan's growth might apply to China and India, two of the fastest growing economies of the twenty‐first century.
Findings
The findings suggest that both America and Japan might be considered exceptional cases and, as such, neither one might be regarded as a good model for emulation. However, the circumstances of Japan's rapid growth appear closer to those of contemporary China and India and on that basis the authors suggest that Japan might be a better model for emulation.
Originality/value
The American model is too novel and unlikely to be imitated, replicated or repeated whereas Japan's high population density, agrarian origins, state assisted and administered development, adaptation and hybridization of local and imported methods and technologies, kinship, pseudo‐kinship and locality based business groupings, and rapid, come‐from‐behind charge toward industrialization, urbanization and international emergence, all suggest that Japan offers a more relevant and useful development model.
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Masao Nakamura and W. Mark Fruin
The Chinese economy, among other developing economies in Asia, has experienced extraordinary growth in the last decade. Yet, for China and other newly emerging economies in Asia…
Abstract
Purpose
The Chinese economy, among other developing economies in Asia, has experienced extraordinary growth in the last decade. Yet, for China and other newly emerging economies in Asia to grow in a sustainable manner, good corporate governance and management mechanisms must be in place. The authors aim to explore this issue in this paper. The authors also aim to particularly point out that Japan's experience both before after the Second World War will be relevant as a model for China's public and business development policy decision‐making.
Design/methodology/approach
The authors apply well‐established theories of economic development and organizational structures of business organizations to Japan's experience before and after the Second World War and then to contemporary China's experience. The analysis of Japan uses the substantial research findings on the development of that country available in the business history literature.
Findings
The paper's analysis shows multiple ways in which China and other emerging East Asian economies can take advantage of Japan's experience (which is called the Japan model here) for their own development policies and achieve sustainable growth in the long run. For example, it is expected that Japan's experiences may be relevant in areas such as: firm formation and the utility of business groups of various types; development of industrial relations and employment practices; interactions between business and government in the promotion of economic development; and how these factors relate to technology advances on a worldwide basis.
Originality/value
The findings reported in this paper also contribute marginally to the literature by considering the recent experience of Chinese private and state‐owned corporations, including international joint ventures, in the context of Japan's experience in its economic and business development history.
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Alfred D. Chandler was the most important business historian of the twentieth century, who described and analyzed how large industrial firms are organized and managed in the USA…
Abstract
Purpose
Alfred D. Chandler was the most important business historian of the twentieth century, who described and analyzed how large industrial firms are organized and managed in the USA from the late nineteenth to late twentieth centuries.
Design/methodology/approach
This paper is a personal memoir and tribute to Dr Chandler and examines his methods, selected writings, and his legacy.
Findings
His concepts and models are widely accepted and applied to North America, Western Europe, and most advanced industrial economies, taking on an air of universality. At the close of the twentieth century, however, a rise of high‐tech industries and rapidly growing, non‐western economies challenged many of the universalistic assumptions embedded in Chandler's work. At the beginning of the twenty‐first century, Chandler's writings suggest nothing more than how much time, place, and people matter.
Originality/value
This paper adds a more personal touch to Dr Chandler.
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This paper aims to present evidence that the adoption by Japanese firms of a shareholder‐oriented, more transparent, system of corporate governance creates greater corporate value…
Abstract
Purpose
This paper aims to present evidence that the adoption by Japanese firms of a shareholder‐oriented, more transparent, system of corporate governance creates greater corporate value in comparison to the traditional system of statutory auditors.
Design/methodology/approach
This study uses panel data of Tokyo Stock Exchange listed companies to explore the potential convergence of corporate governance systems by examining the value differences between Japanese firms selecting one of two legal systems. A random‐effects panel regression is used to analyze the data. The dependent variable of the study is Tobin's q.
Findings
This paper finds a significant increase in firm valuation, as measured by Tobin's q, for companies that adopted the alternative of the Anglo‐American type committee system, even though comparative financial data show little difference in performance after adoption. This finding is attributed to signal sending, as companies that adopted this system signal a choice toward transparency via monitoring by outsiders, suggesting a reduction of asymmetric agency costs. The paper finds that the committee corporate governance system produces higher corporate value than the traditional auditor governance. The study also finds evidence that it is the signal provided by adoption of the credible system, not the financial performance variables, that accounts for this difference.
Social implications
The data support the central idea that corporate governance laws have consequences and encourages additional study of the effects of corporate signaling and the consequences of increased shareholder orientation of agents.
Originality/value
This paper takes advantage of the unique opportunity afforded by Japan's introduction of a dual system of corporate governance in 2003, when companies were offered a choice to adopt a new system of outside directors, which is a shareholder‐oriented committee system. It establishes that firm value can be created by a signal that corporate governance provides.
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Leonard Lynn, Pamela Meil and Hal Salzman
This paper seeks to explore the processes by which the offshoring of technology development to India and China by Western and Japanese multinationals has evolved from the…
Abstract
Purpose
This paper seeks to explore the processes by which the offshoring of technology development to India and China by Western and Japanese multinationals has evolved from the localization/simplification of technology for local markets to the development of advanced technology in India and China for global markets.
Design/methodology/approach
Case studies were developed based on 190 interviews conducted in China, India and several other countries. Respondents included multinational home country and offshore managers, as well as local entrepreneurs.
Findings
Rather than following carefully thought out corporate strategies, the offshoring of technology development by multinationals is more often incremental and driven by the ambitions and expectations of Chinese and Indian entrepreneurs and managers. Meanwhile “technology competition” policies proposed in the USA and elsewhere are not taking sufficient account of the processes by which technology development is being offshored.
Originality/value
Techno‐nationalistic policies designed to allow one country to win a race with others in developing and monopolizing new technologies are increasingly dysfunctional. The identification of multinationals with “home countries” continues to weaken. At the same time, technologies and technology workers are more mobile than ever before. Better policies would allow nations to seek mutual benefit through today's more globally dispersed technology development capabilities. Multinational managers in our study were not sufficiently accounting for the costs of offshoring and outsourcing technology, nor were they giving much thought to the longer term implications of their diminishing capabilities to develop or even control the development technology. More thought should be given to what aspects of technology constitute “core competencies” and which provide sustainable competitive advantage in the emerging global environment.
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Runhui Lin, Hongjuan Zhang, Jianhong Fan and Rujing Hou
This paper seeks to explore the evolution of a third generation mobile communications (3G) industry based on TD‐SCDMA technical standard in China through the lens of network…
Abstract
Purpose
This paper seeks to explore the evolution of a third generation mobile communications (3G) industry based on TD‐SCDMA technical standard in China through the lens of network analysis.
Design/methodology/approach
The authors argue that inter‐firm alliances help companies gain and integrate internal and external resources and foster technical innovation. The paper analyzes alliance governance structures and governance mechanisms in particular, and shows how they protect and improve network‐based innovation capabilities and competitive advantages during a ten‐year period with the method of social network analysis and case studies.
Findings
The authors offer a theoretical model that incorporates cooperation among organizations, the maturity of the industrial chain, and the accumulation of organizational knowledge and social capital.
Originality/value
The paper offers a theoretical model of factors that contributes greatly to the development of technical innovation.
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Developing economies that are subject to global influences, such as through exposure to global product, labor and capital markets, may be expected to practice higher standards of…
Abstract
Purpose
Developing economies that are subject to global influences, such as through exposure to global product, labor and capital markets, may be expected to practice higher standards of corporate governance (CG) than less globalized developing economies. This paper seeks to understand the relationship between CG and firm ownership by private equity investors in India, and to understand whether CG practices in particular national institutional contexts change when the firm is exposed to investors with a background in other countries' institutional contexts. Taking India as a test case, the paper aims to explore how CG standards are affected by private equity investment that originates from developed countries.
Design/methodology/approach
A primary survey on Indian firms' CG practices for firms that receive private equity and for comparable firms that do not was used to determine differences in CG. Private equity investors were surveyed to determine their national institutional contexts. The CG practices were then related to the national institutional context that the private equity investors came from.
Findings
Private‐equity funded firms display higher standards of corporate governance than firms that do not receive such funding. The difference arises from the application of developed country standards of CG arising from the investors that own the private equity funds. These funds are primarily owned by developed country investors. The strategies through which these occur are: reconstituting the board of directors, influencing senior executive recruitment, and changing the firm's operating and strategic rules.
Originality/value
Developing countries like India usually display low standards of CG. Such standards tend to evolve slowly in line with the country's stage of development. The literature has not hitherto identified ways in which this process can be hastened. This study finds that standards can be raised above the prevailing standards through the governance practices imported into developing countries by private equity funds that are primarily owned by developed country investors. Hence, the findings of this paper contribute to the understanding of how globalization influences CG.
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Kiyohiko Ito and Elizabeth L. Rose
As companies grow and increase the number of products they have on offer, they generally change and adapt their organizational structures, in order to arrange their resources and…
Abstract
As companies grow and increase the number of products they have on offer, they generally change and adapt their organizational structures, in order to arrange their resources and product mix in ways that will create value. We analyze various corporate structures that have been adopted by U.S., European, and Japanese companies, in the context of the resource‐based view of the firm. These corporate structures include functional, divisional, conglomerate diversification, core competence‐based diversification, and keiretsu. We also identify an emerging structure. This recent development is a network of alliances, aimed at pursuing economies of scale, scope, and speed.