economic growth, will inevitably undergo substantial modification. Hence, it is quite possible that the concept of a vertical international integration of labor with Japanese companies at the top will become outdated. Similarly, complex, global corporate networks of Europe, America, and various Asian countries will likely spread through the Asian region.

During the 1970s and the first half of the 1980s, the independent management strategy that served as the basis for the overseas advance of Japanese MNCs started to shift. This trend, more than a simple shift in the strategies of individual firms, reflected a corporate response to a shift in the economic environment. With the increase of proportion of goods made overseas and the process of forming closer links with local companies, we are now facing the final days of the pure, one-country keiretsu corporate group as the basis for economic networking functions. As we entered into the 1990s, almost all major firms had formed sales and technology alliances with major U.S. companies. At the same time, many of the U.S. partners are those companies that entered Japan during the period of high-speed growth. With the lingering slump of the early 1990s, consolidation and rationalization of these groups are proceeding rapidly. 15

As the socioeconomic climate and industrial technology surrounding us has been changing so rapidly and becoming increasingly complex, it is no longer possible for MNCs to succeed by relying on traditional selfish strategies. Corporate core technologies are no longer sufficient to develop attractive products. Company sales networks alone are inadequate to sell products, especially in foreign markets. In order for MNCs to succeed, they have to be good local citizens in host countries. MNCs have to manage their businesses based on global strategies. Hence they have been developing complex industrial alliances in order to survive, regardless of political pressures. The Japanese working group highly appreciates this trend toward a better global industrial organization.


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9 Kaku, K. and H. Horaguchi. 1993. “Survey on Withdrawals from Foreign Markets.” Toyokeizai Handbook on Foreign Investments.Tokyo: Toyokeizai-shinposha.

10 Japan External Trade Organization, 1993, p. 19.

11 Sakurai, H. Unpublished mimeograph on U.S.-Japan joint ventures, provided for the case studies.

12 Stopford, J. M. and L. T. Wells. 1976. Organization and Ownership Policies of Multinational Companies,as translated by K. Yamazaki. Tokyo: Diamond.

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