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4 U.S. and Japanese MNCs and the Shape of Global Competition
4 U.S. and Japanese MNCs and the Shape of Global Competition
Pages 40-58
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From page 40... ...
In addition to Asian production aimed at export substitution, increasingly undertaken for cost considerations rather than to avoid trade barriers, it appears Japanese electronics MNCs have moved toward more integrated production systems.2 This has taken the form of accelerated 40
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From page 41... ...
TABLE 4-2 U.S. Majonty-owned Nonbank Foreign Affiliates in Asia 1993, million dollars U.S.U.S.
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From page 42... ...
Overall Japanese investment in China appears to be increasing rapidly. Table 4-6 shows that Japanese electronics manufacturers anticipate considerable growth in Chinese investments and production.
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From page 43... ...
There is still a great deal of debate about the role of Japan's development assistance and the economic access that it might facilitate. Official Japanese statistics show that the amount of aid explicitly tied to purchases from Japanese companies has dropped rapidly in recent years, and these statistics indicate that a ___O 43
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From page 44... ...
The current data and information base is largely inadequate to make finegrained judgments about the current shape of production and supply networks within the Asia Pacific region and about evolving trends. Even the trade and investment data that are collected are available only after a time lag, and the impacts of the 1993 to 1995 yen appreciation on Japanese electronics MNC strategies will not be known definitively for some time.
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From page 45... ...
- ~ oo o v, m en ._ Cal 4 C~ Cal o Cal ._ Cal 1 3 o o 4 C~ 3 o I:: Cal 4 ._ ._ o Ed .
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From page 46... ...
Strengths 80 60 In a Q In ~ 40 o E z 20 O 100 c, 80 In o Q A, 60 a: o ``, 40 E Z 20 o A B C D E F G A Technology development capability B Product development capability C Manufacturing technology D Quality management E Overall management capability F Abundant human resources G Low-cost manufacturing H Other Weaknesses A Exclusivity B Cautious in technology transfer C Slow decision making D High wages E Lack of trust F Other .
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From page 47... ...
Therefore, although a greater Asian focus is necessary for MNCs and policy makers in both countries, downgrading the bilateral relationship probably is not a viable longterm strategy for either Japan or the United States. GLOBAL TECHNOLOGY: ACCESSING AND UTILIZING TECHNOLOGICAL CAPABILITIES WORLDWIDE · Increasingly, MNCs from Japan, the United States, and other countries are pressed to develop and utilize technological capabilities globally.
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From page 48... ...
MNC contributions to technological and manufacturing levels in the host country supplier base; and (3) international strategic alliances and their implications for national technology policies.
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From page 49... ...
SOURCE: Tsusho Sangyosho Sangyo Seisaku Kyoku (MITI Industrial Policy Bureau) , Gaishikei Kigyo no Doko, 26 kai (Trends in Foreign Capital Enterprises)
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From page 50... ...
, Kaigai Toshi Tokei Soran (Statistics on Overseas Investment) , (Tokyo: MITI, 1994~.
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From page 51... ...
Still, a great deal of uncertainty will continue to surround these issues because of gaps in information and because of the undeveloped state of analytical tools. In the meantime, any efforts undertaken to measure the employment of researchers and engineers by MNCs, the overall funding of host country research as a percentage of manufacturing output or sales, and other possible indicators for MNC contributions to host countries could contribute to a greater understanding of these issues.
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From page 52... ...
From the extensive research that has been done on the issue, it is possible to extract several essential points. To begin with, particularly in the automobile industry, Japanese companies have advanced the organization and practice of manufacturing and have generated key innovations involving the supplier-manufacturer interface.24 In addition to having suppliers play a key role in just-in-time inventory management and other aspects of Japanese manufacturing practices, Japanese manufacturers have relied more on suppliers to independently design and develop components than U.S.
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From page 53... ...
companies typically have toward strategic alliances.29 For example, it is reported that two-thirds of the joint ventures between Japanese and foreign companies in Japan are bought out by the Japanese partner when they are terminated.30 This is because Japanese companies typically take a longer-term strategic approach to alliances and ventures that focuses on absorbing know-how from the partner. Western companies perhaps are more likely to take a short-term financial results-driven approach.3i In summary, although U.S.-lapan MNC and technological relationships have moved toward greater balance and mutual benefits, long-standing asymmetries and challenges remain.
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From page 54... ...
The third category described in the L`TCBR report comprises "arriving MNCs." These companies will be encouraged to enter the Japanese market because of structural changes in the Japanese economy, developing business according to one or more of three major themes. MNCs entering Japan as part of the movement to "build an abundant lifestyle" will provide a wider variety of goods and services at a lower cost than what domestic companies can offer in industries such as clothing, food, telephone sales, cable television, and building materials.
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From page 55... ...
OTA's report indicates that these differences are deeply rooted and unlikely to change in the short term.35 There is some disagreement over whether Japanese MNCs can maintain their competitive and manufacturing edge in the long term, and resumed yen appreciation constitutes a possible short-term threat to export-oriented companies.36 Still, individual Japanese companies and Japanese manufacturing as a whole retain considerable strengths, and, in many hightechnology industries, Japanese MNCs will remain the toughest competitors for U.S. companies for the foreseeable future.
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From page 56... ...
1994. "The Myth of a De Facto Asian Economic Bloc: Japan's Foreign Direct Investment in East Asia" Columbia Journal of World Business 24:6.
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From page 57... ...
supplier base is the Toyota Supplier Support Center. Toyota Supplier Support Center, promotional video, 1994.
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From page 58... ...
1994. Gaikoku Shihon ga Kaeru Nihon Sangyo (Foreign companies will transform Japanese industry)
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