1. JAPAN: Class 3

2. 4. Kenney and Florida, Beyond Mass Production, 1993 n critical of stress on small firms; large firms initiated what is distinctive about organization of production n flexible production understates what is distinctive

3. Thesis: a new model of production organization---INNOVATION- MEDIATED PRODUCTION n emphasis on incremental improvement innovation n emphasis on process as well as product improvements n able to diffuse innovations through industrial structure quickly n organization of work and attitudes toward workers are key features

4. Key feature of corporate attitudes toward workers All permanent employees including blue collar are treated as SMART WORKERS

5. Key feature of organization of work--use of a team-based organizational model n workers are multiskilled n workers perform multiple tasks n workers rotate through tasks n teams are a device for: –moving decision-making down to the shop floor; tapping worker intelligence –achieving functional integration of tasks –reducing worker alienation

6. Additional features of organization of work n R&D lab and factory are brought closer together/engineers and scientists interact with shop floor workers n managers are in contact with shop floor n management structure is more adaptable. Consists of generalists who transfer among departments.

7. Purpose of team-based organization is not to make work easier n to reduce costs and increase productivity n to provide an internal source of worker motivation and discipline

8. Japanese corporations and worker resistance n enterprise unionism n tenure security n Japanese remuneration schemes

9. A Synthetic Model source: Kotler, Fahey and Jatustripitak, The New Competition.

11. Cultural Characteristics n Strong sense of belonging to a group--> teamwork n willingness to sacrifice for long-term goals

12. Educational Characteristics n Heavy commitment to investment in human capital n high achievement level on average with relatively high floor on achievement

13. Government-business environment

14. Vertical alliances subcontracting systems n the between-firm corollary of within-firm teams n pyramidal structure n teamwork enables just-in-time supplier systems n often consist of regional clusters of linked units

15. Toyota City production complex--1980 Toyota 10 subsidiaries & 22 primary subcontractors 5,000 secondary subcontractors 30,000 tertiary subcontractors

16. Horizontal alliances keiretsu n Associations of large corps. Clustered around a group city bank, a trust bank, real estate agency, life and casualty insurance firm, one or more general trading companies n 6 major ones: Mitsui, Mitsubishi, Sumitomo, Daiichi Kangyo, Sanwa and Fuyo. n Descendants of zaibatsu

17. n Representatives from EVERY major mfg. and service sector n Normally, a single firm from each industry n Presidents of all the major firms assemble monthly n Interlocking directorates based on interlocking share holdings n basis of mutual solidarity

18. Possible advantages n Pooling of capital, technological knowledge, personnel etc. n reduces dependence on shareholders outside the grouping