Japanese Companies in Europe: Their Strategies and Management Practices

Abstract

Foreign direct investment (FDI) strategies of Japanese companies in Europe are undergoing major changes. The new phase is characterized by attempts to consolidate and rationalize corporate activities. At this point, an analysis of previous location and market strategies as well as of failures and successes in terms of a transfer of Japanese management practices to their European subsidiaries and joint ventures is necessary in order to better forecast future developments in this field. On the basis of three case studies exploring Italian-Japanese joint ventures, several success factors (and barriers) underlying the implementation of production, quality, and work practices are identified. While from a corporate point of view greenfield investments appear relatively more advantageous over other venture forms, existing constraints in the wider political and socio-economic environment will play an even larger role for FDI (location) decisions henceforward, given the overall reduced levels of Japanese investments abroad at the end of the 1990s.