Organizational Learning and Purchase-Supply Relations in Japan: Hitachi, Matsushita, and Toyota Compared

Lincoln, James R.; Ahmadjian, Christina L.; Mason, Eliot

doi:10.2307/41165953

Cited by 140 publications

(103 citation statements)

References 7 publications

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“…The case study presented here provided the occasion to contrast two ways of approaching the key choice concerning how to decide on the division of labor of innovation tasks within and across firms' boundaries, i.e., task allocation. Our empirical evidence adds further support to the literature that has pointed out the dangers of design outsourcing (Lincoln et al, 1998;Fine, 1998), and the centrality of performance integration as a criterion for 49 which component-specific knowledge should be maintained in-house (Takeishi, 2001(Takeishi, , 2002. In this respect, in organizing NPD, we highlight that managers should focus on task allocation and its consequences on the competences of the firm.…”

Section: Resultssupporting

confidence: 82%

“…As it turns out, for many firms outsourcing design and engineering tasks guided by modular product architecture led to problematic consequences, such a substantial decay of architectural knowledge and a subsequent loss of control over development projects (Lincoln et al, 1998;Takeishi, 2001Takeishi, , 2002Chesbrough and Kusunoki, 2001). Empirical evidence indicates a gap in our understanding of the impact of product architecture on task allocation, in particular as a response to the question of what type of competences firms developing complex products should retain in-house and what rationale they should follow in taking this decision.…”

Section: Introductionmentioning

confidence: 99%

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Beyond Product Architecture: Division of Labour and Competence Accumulation in Complex Product Development

Becker

Zirpoli

2011

SSRN Journal

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This paper considers the trade-off between leveraging external sources of innovation by outsourcing design and engineering activities and the ability to develop internal product development competences. The trade-off arises because the division of labor within and across firms' boundaries has a crucial role in shaping competence development processes, especially because the division of labor also influences opportunities for learning by doing. In new product development projects, learning by doing appears to be both a key determinant of competence development and a difficult-to-substitute form of learning. While the division of development tasks is often considered as guided by product architecture, we show that by decoupling the decisions concerning the product architecture and the allocation of development tasks, firms can realize the benefits of outsourcing such tasks while developing new internal competences. Drawing on a longitudinal case study in the automotive industry, we also identify a new organizational lever for shaping competence development paths and for designing firm boundaries. This lever consists in alternating different task allocation schemes over time for different types of development projects. We show why this is a novel solution, what its underlying logic is, and how it enables alleviating the trade-off between the benefits of leveraging external sources of innovation and the opportunities for competence development provided by in-house design and engineering. We discuss implications for theories of organizational boundary design and innovation management.

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Section: Resultssupporting

confidence: 82%

Section: Introductionmentioning

confidence: 99%

Beyond Product Architecture: Division of Labour and Competence Accumulation in Complex Product Development

Becker

Zirpoli

2011

SSRN Journal

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“…In response, they have moved to sharpen the contrast between close affiliate and arms-length supplier. Matsushita, for example, has been winnowing out suppliers-selecting an elite subset and assisting them in upgrading their production capabilities and technological knowledge while pressuring them to withhold specialized knowledge from competitors (Lincoln, Ahmadjian, and Mason 1998). Suppliers that do not make the cut are dropped, often in favor of foreign sources offering standard products at lower prices.…”

Section: Discussionmentioning

confidence: 99%

“…While not formally discouraging its suppliers from seeking other customers (excepting Nissan), Toyota is displeased when its affiliates collaborate closely with the competition. Toyota, we were told, 3 was unhappy with Denso's extensive assistance to Chrysler in the development of the subcompact Neon, which early on was perceived to pose a challenge to Japanese dominance in small cars (Lincoln, Mason, and Ahmadjian 1998).…”

Section: Toyota Denso and Auto Electronics: From Hybrid To Hierarchymentioning

confidence: 99%

Keiretsu, Governance, and Learning: Case Studies in Change from the Japanese Automotive Industry

Ahmadjian

Lincoln

2001

Organization Science

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228

118

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The "keiretsu" structuring of assembler-supplier relations historically enabled Japanese auto assemblers to remain lean and flexible while enjoying a level of control over supply akin to that of vertical integration. Yet there is much talk currently of breakdown in keiretsu networks. This paper examines some recent developments in Japanese parts supply keiretsu.We argue that keiretsu relationships are drifting from "hybrid" or "network" (i.e., keiretsu) governance modes toward the extremes of arms-length contracting and top-down administration. These changes are best understood through a combination of transaction cost and learning perspectives on alliance. Consistent with transaction cost economics, the shift in purchase -supply relationships can be traced to changes in the nature of parts transactions and keiretsu governance structures. A learning perspective on alliance complements and extends transaction cost theory, providing additional explanation of the sources of change and the specific governance choices being made.Our first two cases document a drift in Toyota's keiretsu supply network toward hierarchical form in the management of parts supply transactions. Toyota has effectively internalized its transactions with Daihatsu by taking a controlling interest. Toyota's strategy toward long-term partner Denso, on the other hand, was very different. Toyota built from the ground up an in-house capability in electronic components-thus (particularly at the high end) buying less from and scaling down its dependence on Denso. A third case considers a general trend in the Japanese auto industry toward greater standardization of parts. With the routinization of quality, reliability, and speed in supply management the need for keiretsu-style governance has declined. The withering of keiretsu obligations is also traceable to globalization and the continuing weakness of the Japanese economy, which have prompted Japanese firms to question received business practice.3

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“…Trust appears to be an important antecedent in these relationships as it increases the likelihood that information is being shared between the organizations (e.g. Ha et al, 2009;Fawcett et al, 2012, Lincoln et al, 1998Squire et al, 2009, Walter, 2003. Consequently, while there is a fair amount of literature on work integration at the R&D-manufacturing interface, the knowledge relationships and knowledge integration processes between buyers and suppliers at this interface have received less attention (Hong et al, 2004;Nobelius, 2004).…”

Section: Introductionmentioning

confidence: 99%

Integrating knowledge with suppliers at the R&D-manufacturing interface

Rosell

Lakemond

Wasti

2014

Journal of Manufacturing Technology Management

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Purpose -Many manufacturing firms source components and subsystems from suppliers. Consequently, the suppliers' product and manufacturing knowledge is a central concern at the interface between R&D and manufacturing. This paper specifically investigates how supplier knowledge is integrated and what role trust plays in knowledge integration with suppliers at the R&D -manufacturing interface. Design/methodology/approach -The study is based on qualitative case studies of two different collaborations with suppliers at one firm. Findings -Two distinct processes are identified. First, capturing represents knowledge integration through decoupling, for which a basic level of trust specifically with regard to the competence of the supplier is necessary. Capturing can take place through interactions that are limited in time and scope. Second, joint learning represents a coupled knowledge integration process and takes place during a more extended period of time preceding and following the R&D-manufacturing interface and builds on relational-based trust. Practical implications -The interface between R&D and manufacturing needs to be extended to include a focus on suppliers' contributions in terms of product and manufacturing knowledge. The choice for suitable knowledge integration processes needs to be guided by concerns about the level of trust and the character of the supplier contributions. Originality/value -The paper adds new insights to previous literature by distinguishing between different types of knowledge integration processes and levels of trust. It bridges the gap between innovation and operations management, and clearly shows that the interface between R&D and manufacturing crosses organizational borders.Key words Knowledge integration; Buyer-Supplier collaboration; Trust; Product development; R&D-manufacturing interface 2 IntroductionSuppliers are increasingly contributing to their buyer's product development processes and acting as production partners (e.g., Appleyard, 2003, Beecham and Cordey-Hayes, 1998, Lau et al., 2010. In a recent report on global manufacturing by KPMG (KPMG, 2012), it is emphasized that tighter collaboration with suppliers is an important trend in the manufacturing industry, not only for manufacturing and logistics, but also specifically with regard to R&D activities. Consequently, the interface between R&D and manufacturing does not only involve internal functions, but includes external supplier relationships. These supplier relationships represent an important source of knowledge that has to cross the R&D -manufacturing interface in order to be integrated. Trust appears to be an important antecedent in these relationships as it increases the likelihood that information is being shared between the organizations (e.g. Ha et al., 2009;Fawcett et al., 2012, Lincoln et al., 1998Squire et al., 2009, Walter, 2003. Consequently, while there is a fair amount of literature on work integration at the R&D-manufacturing interface, the knowledge relationships and knowledge integration proc...

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Organizational Learning and Purchase-Supply Relations in Japan: Hitachi, Matsushita, and Toyota Compared

Cited by 140 publications

References 7 publications

Beyond Product Architecture: Division of Labour and Competence Accumulation in Complex Product Development

Beyond Product Architecture: Division of Labour and Competence Accumulation in Complex Product Development

Keiretsu, Governance, and Learning: Case Studies in Change from the Japanese Automotive Industry

Integrating knowledge with suppliers at the R&D-manufacturing interface

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