New challenges for Japanese multinationals: Is organization adaptation their achilles heel?

Abstract

As the number, size, and complexity of Japanese multinational companies' (MNCs) overseas operations increase, many of them have begun to realize that they face some fundamental and difficult organizational challenges. Drawing on research undertaken with several large and successful Japanese MNCs, the authors define the nature and source of some of these organizational challenges, and describe some approaches that can be taken to resolving them. The article starts with a brief assessment of the traditional organizational capabilities and existing managerial approaches of Japanese companies, comparing them to the emerging challenges in the international environment. Then, after identifying some constraints and barriers to an effective response to the new demands, the authors propose a series of actions to overcome the problems.

Why Do Japanese Companies Exploit Many Expatriates?

“…Bartlett and Ghoshal (1989) and Bartlett and Yoshihara (1988) perceive this characteristic of Japanese companies as the evil of Japanese companies in concentrating resources and power in the home headquarters and not focusing on the subsidiary. More research is needed to answer whether this is actually a unique phenomenon of Japanese companies, or a phenomenon perceived during the transition of the overseas subsidiary's enhancement of functions.…”

“…Japanese companies tend to send more expatriates abroad from the home headquarters in comparison to the multinational corporations of Europe and the USA (Bartlett & Yoshihara, 1988;Kopp, 1994aKopp, , 1994b. 1 However, it has been shown that the numbers of expatriates in overseas subsidiaries of Japanese companies decreased in the first half of the 1990s (Beamish & Inkpen, 1998).…”

“…Prior research has explained the reasons for Japanese companies to utilize many expatriates from the perspective of corporate culture and historical background (Bartlett & Ghoshal, 1989;Bartlett & Yoshihara, 1988;Beamish & Inkpen, 1998;Kopp, 1994aKopp, , 1994b.…”

“…Some research has criticized the tendency of Japanese companies to 1 The term "expatriates" is defined as transferees from the home country and "third country" nationals to an overseas subsidiary (Delios & Bjorkman, 2000 utilize many expatriates with the premise that this tendency is a unique characteristic of Japanese companies (Bartlett & Yoshihara, 1988;Kopp, 1994aKopp, , 1994bLegewie, 2002). It has also been reported that Americans working in Japanese companies in the US feel dissatisfaction with Japanese expatriates due to communication issues (Kopp, 1994b).…”

“…It has also been reported that Americans working in Japanese companies in the US feel dissatisfaction with Japanese expatriates due to communication issues (Kopp, 1994b). Thus some researches have argued that Japanese companies should decrease the numbers of expatriates in overseas subsidiaries (Bartlett & Yoshihara, 1988;Beamish & Oki Inkpen, 1998;Kopp, 1994aKopp, , 1994bLegewie, 2002). …”