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"Japanese/US Comparative Advantage: Width and Depth of Co-ordination," A Chapter of Information and Organization: A Tribute to the Work of Don Lamberton, edited by S. Macdonald and J. Nightingale, 1999, Amsterdam: Elsevier Science B.V., pp.197-214. Revised version of "Why did Japanese producers perform very well in manufacturing automobiles and electronic appliances during the 1970s and 1980s, but did quite poorly in providing PC and other IT services in the 1990s?," presented at the Second International Academic Symposium at Dongseo University, Korea, December 5, 1997, 19pp.
[Outline]

There is a remarkable difference in the overall performance of Japanese corporations relative to American ones in the 1970-80s and in the 1990s. Japanese corporations performed very well in producing automobiles and electronic appliances in the 1970-80s, but they did quite poorly in producing personal computers (PC) and information-telecommunication (IT) services in the 1990s. This paper proposes an explanation of this difference. First, it discusses the characteristics of the process in which each product or service is created, produced, and improved. Second, it considers the characteristics of the coordination by workers of corporations. Two measures will be proposed to characterize a particular coordination: width and depth. The width is the number of the workers who can possibly participate to the coordination in question. The depth is the degree by which the coordinating workers understand each other. It is pointed out that the relative importance of the width and the depth of coordination differs depending on the characteristics of each product or service. On one hand, the depth plays an important role in producing such products as automobiles and electronic appliances. On the other hand, the width is more important in producing network-type products such as PC, hardware or software, and IT services. The paper then compares Japanese corporations with American ones with respect to the width and the depth of coordination. It states that, in average, the depth of coordination is greater with Japanese corporations, whereas the width of coordination with American corporations. Thus, the difference in the performance of Japanese corporations between the 1970-80s and the 1990s came from a change in their comparative advantage, which seems to have been originated from some cultural differences between the two countries. The paper concludes with a discussion on possible remedies for increasing the width of coordination in Japanese corporations. (Industry Analysis)

[Keywords]

Comparative advantage, coordination, deep coordination, wide coordination, PC industry, personal computer industry, business organization, corporate organization, corporate governance, R&D governance

[Full Text]

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Hajime Oniki
ECON, OGU
09/09/99
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