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Purpose – We investigate whether the partnership behavior of Japanese partners in their joint ventures (JVs) with European partners in Europe can be explained by the…
Purpose – We investigate whether the partnership behavior of Japanese partners in their joint ventures (JVs) with European partners in Europe can be explained by the Trojan horse hypothesis (THH) view or by the cooperative specialization (CS) view. The THH view assumes that Japanese firms establish JVs to steal the knowledge of their partners and dissolve JVs as soon as they have achieved their goals. The CS view, on the other hand, argues that Japanese firms set up JVs to achieve CS and that these JVs will be stable.
Methodology – First, we derive implications of both the THH and the CS views for the longevity of JVs. Second, we make a census of all Japanese–European JVs manufacturing in 1987 and analyze their evolution to 1996. Third, we count how many of these JVs have evolved in ways that are predicted by the THH and the CS views. We argue that a particular view is supported if the number of JVs following the predicted path is larger than that following alternative paths.
Findings – We find that the partnership behavior of Japanese firms is more consistent with a CS view than with a THH view.
Limitations – This is a conservative test of THH behavior since JVs can dissolve for other reasons than the knowledge-stealing behavior of their Japanese partners.
Value of chapter – This is, as far as we know, the only study that has investigated the evolution of the population of Japanese–European JVs in Europe and has derived implications for the validity of the THH and CS views of JVs.
This study focuses on a survey of chief financial officers (CFOs) in public firms in Japan concerning the following six points: the importance of the definition earnings…
This study focuses on a survey of chief financial officers (CFOs) in public firms in Japan concerning the following six points: the importance of the definition earnings quality; higher quality earnings; the determinants of earnings quality; prevalence, magnitude, and motivation of earnings management; accounting that influences earnings quality; and misrepresenting of earnings. The results are following: first, Japanese CFOs define earnings quality as earnings accurately reflecting economic reality, earnings accurately reflecting the results of operations, and earnings backed by cash flows, earnings sustainability, recurring, and consistent, and earnings reflecting long-term trend importance. Second, Japanese firms consider earnings that reflect consistent reporting choices over time as higher quality. They do not consider that earnings having accruals that are eventually realized as cash flow as higher earnings quality. Third, Japanese CFOs indicate that 30% of earnings quality is impacted by firm characteristics such as firm’s business model, industry, and macroeconomic conditions. Surprisingly, the influence of the board of directors is greater than the impact of their internal controls. Fourth, as for the determinants of earnings quality, CFOs consider that more than 70% of Japanese CFOs do not allow the discretion and that accounting standards limit their ability to report higher earning quality. Fifth, Japanese CFOs consider that higher earnings are influenced by accounting principles such as policies that match expenses with revenues and policies that rely on fair value accounting as much as possible. Sixth, CFOs themselves predict that 50% of Japanese firms use discretions and that they use 20% of earnings per share (EPS). Since there is inside and outside pressure to hit earnings benchmarks, Japanese firms possess the motivation to use earnings to misrepresent economic performance, Japanese managers see a red flag when generally accepted accounting principle’s earnings do not correlate with cash flow from operations.
This chapter is aimed at filling two important gaps in the large literature on high-involvement work system (HIWS). First, the existing literature tends to focus on North…
This chapter is aimed at filling two important gaps in the large literature on high-involvement work system (HIWS). First, the existing literature tends to focus on North America and Western Europe, and detailed information on HIWS outside of the two regions (especially Asia) is still limited. Second, while there is a large body of quantitative evidence, the literature is relatively scant on detailed account of exactly how specific HIWS practices are implemented in the real workplace. This chapter draws on our extensive field research at firms in Japan, the United States, and Korea, and presents real-world examples of HIWS of firms in Japan, Korea, and the United States. Our detailed account of the implementation of HIWS in the three countries points to an intriguing process of transnational diffusion of HIWS. Japanese firms as early experimenters of HIWS posed a challenge to U.S. firms in the global marketplace, resulting in the trans-pacific diffusion of HIWS which is modified to the U.S. corporate culture. Due to its geographical proximity and historical connections to Japan, Korean firms were initially heavily influenced by Japanese HIWS. However, with the rising link to the United States and Europe, Japanese influence appears to have been waning, and interest in U.S. style HIWS and European-style state-mandated works council has risen, suggesting that a hybrid model may be emerging in Korea.
Important evaluation criteria as they are perceived by quality managers in American and US‐based Japanese firms are examined. For this study, three different groups of…
Important evaluation criteria as they are perceived by quality managers in American and US‐based Japanese firms are examined. For this study, three different groups of companies contained within four industries were considered. They included American firms using a traditional approach to manufacturing management, Japanese firms operating in the United States, and American firms attempting a Japanese approach to manufacturing management. This study identified price, on‐time delivery, and the supplier′s product quality as the three major criteria for evaluating vendors. The attitudes of quality managers concerning the importance of these variables were counter to the impressions portrayed in the academic and managerial press. Also differing from the literature was how much the managers in these different types of firms linked the evaluation criteria and overall organisational performance.
The purpose of this study is to compare and contrast manufacturing strategies and practices, and its impact on business performance between Korean and Japanese firms in…
The purpose of this study is to compare and contrast manufacturing strategies and practices, and its impact on business performance between Korean and Japanese firms in the electronics industry. It is based on the premise that: (1) manufacturing strategies and practices differ significantly between these two countries; and (2) these differences significantly impact firm's manufacturing operations and business performance. The focus of the study is to explore the differences that may exist between Japanese and Korean firms in manufacturing strategies and business practices by analyzing survey results of electronics firms from both countries. Differences between Japanese and Korean firms are investigated in several respects.
After four consecutive years′ trade surplus, Korea′s climbingforeign trade deficit in 1990 is a clear signal that the nation shouldattempt to improve the performance of…
After four consecutive years′ trade surplus, Korea′s climbing foreign trade deficit in 1990 is a clear signal that the nation should attempt to improve the performance of its manufacturing industry. However, there has not been much study on how manufacturing management is conducted in Korea and how it might be improved. Too much emphasis has been placed on macro policy variables such as tax, exchange rates and interest rates, which have only short‐term effects on competitiveness. The task for Korean manufacturing industry is to meet the challenges before it and be in a position to compete with other countries by providing high‐quality products at the right price. The most affordable and practical alternative is to make innovations in the current manufacturing process in order to enhance productivity and competitiveness. Studies the adoption and application of Japanese manufacturing management techniques under Korean conditions. Also provides a number of cases of their implementation in Korea and outlines considerations and recommendations necessary for their successful implementation based on the study findings.
This study examines the determinants of performance of foreign manufacturing subsidiaries in Japan. The study finds that a foreign parent’s size, the subsidiary’s age, and…
This study examines the determinants of performance of foreign manufacturing subsidiaries in Japan. The study finds that a foreign parent’s size, the subsidiary’s age, and a complicated distribution system influence a subsidiary’s performance. There was little significant change in these determinants over a 20-year period. However, for subsidiaries that survived over the observation period of this study, some determinants changed. We also found that by forming joint ventures with Japanese firms, foreign firms can overcome the obstacle of distribution and circumvent the disadvantage of inexperience. Moreover, the mitigating effects of joint ventures vary, depending on the type of Japanese partner.
Changes are under way in Japan’s distinctive human resources management practices as the state of the economy remains fragile following the country’s prolonged recession…
Changes are under way in Japan’s distinctive human resources management practices as the state of the economy remains fragile following the country’s prolonged recession. However, such changes may not necessarily point to the eventual collapse of the Japanese employment system, as sometimes suggested. Despite the adjustments companies have made to cope with the economic downturn, distinctive human resources management practices in Japan’s large‐scale enterprises are unlikely to disappear altogether. This paper argues that the relationship between large‐scale enterprises and an even smaller segment of the permanent workforce will continue to be defined by distinctive management practices. Thus, what is actually taking place in Japanese management is an ad hoc reshuffle rather than substantial restructuring of internal labor markets.
Over the decade the trend of Global Fortune 500 firms has shown significant changes – Japanese and Chinese firms in particular. The purpose of this paper is to present…
Over the decade the trend of Global Fortune 500 firms has shown significant changes – Japanese and Chinese firms in particular. The purpose of this paper is to present trend analysis of Global Fortune 500 – Japanese and Chinese firms. Key research questions are: what are the relevant macro-level changes that have affected the growth and decline of Japanese and Chinese firms? What are the industry-level changes that have occurred in Japanese and Chinese firms in terms of firm characteristics and financial performances? What are the lessons and implications from the firms added to or removed from Global Fortune 500? Data analysis is conducted based on Fortune database from 1995 to 2013.
The study employs descriptive analysis to examine the trend of Japanese and Chinese firms listed in Global Fortune 500 including: based on revenue and profit figures from 1995 to 2013; the authors perform trend analysis for each of those five types from 1995 to 2013; the authors replicate the analyses for different industry types in terms of the above five types; the authors compare the performances of Japanese and Chinese firms; based on 2011-2013 data, the authors conduct more in-depth analysis for selected firms.
The findings suggest five distinct types of firms including “Sustainables,” “New Comers,” “Move Ups,” “Decliners,” and “Drop Outs”; it is interesting to note that the changes in Global Fortune 500 firms suggest how these two countries show their relative competitive advantage. Chinese firms show steady flows of new firms that join in the rank of Global Fortune 500 whereas Japanese firms suggest continuous drop of firms that move out of Global Fortune 500 firms. As China increases its size of economy, state-owned financial institutions, resource-focus firms (e.g. mining and petroleum) firms also rapidly increased its overall size. Although the number is still small, privately owned Chinese global firms (e.g. Lenovo, Huawei, Zhejiang Geely Holding Group, Ping An Insurance) also are now listed as Global Fortune 500 firms. In contrast, Japanese firms that lost their global market positions steadily disappeared from Global Fortune 500 firms. Representative firms include Daiei, Mitsubishi Motor Company, and NEC.
One limitation of the analysis on financial indicators is that the authors select only a few firms and focus only on two time points. Nevertheless, it provides the authors information about the financial factors that characterize the two types of Global Fortune 500 firms. Moreover, it opens up new opportunities for future research.
Factors that influence the behaviors of Global Fortune 500 firms suggest both external environmental and internal managerial factors. Although serious external factors (e.g. Global Financial Crisis) affect the outcomes of these competitive positioning, it is still the managerial leadership that makes differences in cases of many Japanese firms. To Japanese firms maintaining domestic advantage is not enough to sustain their position in Global Fortune 500. Global competitiveness matters. On the other hand, it is unclear whether changes occurring in Chinese firms are more managerial than externally dictated. In case of many Chinese financial firms and resource rich firms, the huge domestic advantage has much to do with their position in Global Fortune 500.
This is the first trend analysis that examines the Global Fortune 500 firms from Japan and China. The authors identify five types of firms that would be an important basis for the further benchmarking studies of Global Fortune 500 firms in other counties (e.g. the USA, Germany, Korea, and other Emerging Economies – Russia, India, Brazil).
This study aims to explore how sub‐dimensions of home country influence multinational enterprise (MNE) ownership strategy in international subsidiaries.
This study aims to explore how sub‐dimensions of home country influence multinational enterprise (MNE) ownership strategy in international subsidiaries.
Following a grounded theory approach, the authors interviewed 36 managers of US and Japanese MNEs. Among 36 managers, 21 worked for Japanese firms, 12 for US firms, and three for the US‐Japanese IJVs.
This study proposes a list of cultural and resource‐based explanations for MNEs' divergent ownership patterns by nationality.
This research focused on two home countries, Japan and the USA. Future studies are required to extend and validate the findings in this study.
By considering sub‐dimensions of home country effect, managers can make a more accurate prediction of the potential partner's willingness to form an IJV.
This study suggests that host countries' ownership restriction can make divergent effects on foreign investors by their nationality.
The central contribution of this paper is identifying a set of underlying factors of home country effect and explicating their individual effect on MNE ownership strategy.