Theory of Competitive-cum-cooperative (CCC) Interfirm Governance
Many scholars attribute the dynamics of Japanese companies to the culture of cooperation and trust. Factors often mentioned include harmonious management, industrial relations, and government-business relations (Abegglen, 1984; Iwata, 1977, 1982, 1984; Cole, 1979; Tsuda, 1984; Johnson, 1982; Okimoto, 1989 Morishima, 1984;Murayama, 1982; Pascale and Athos, 1981). Some have heavily weighed the importance of harmonious interfirm relations such as long-term relations and Japanese horizontal and vertical keiretsu(Gerlach, 1989; Inoue, 1985; Stowsky, 1989; Nakatani, 1984; Uekusa, 1987; Kinzley, 1991).
KeywordsCooperative Behavior Transaction Cost Economic Mutual Assistance Mutual Gain Cooperative Relation
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- 1.Horizontal keiretsu means a structure based on power-symmetric interfirm relations, in which loosely-affiliated large-sized companies of diverse complementary backgrounds cooperate with each other in business activities. Vertical keiretsu means a structure based on power-asymmetric interfirm relations in which, on the one hand, large-sized companies, and on the other hand, small-and medium-sized companies closely cooperate with each other in business activities.Google Scholar
- 2.An institutional arrangement is defined as a set of interrelated systems that regulates the behavior of individuals and organizations in recurrent situations in society.Google Scholar
- 3.Corporate environments in this book mainly refer to either market conditions or incidents that significantly influence market conditions.Google Scholar
- 4.See Hamaguchi (1977) and the Masuda Foundation (1992). Members in a Masuda Foundation research project translated kanjinshugi as contextualism rather than interpersonalism. I have chosen the latter translation, since it emphasizes more strongly the importance of relationships, while the Chinese characters literally mean the latter.Google Scholar
- 5.See Hamaguchi (1977) and Befu (1986:22). Benedict (1969) points out that Japanese behavior is restricted by a very complex system of external pressures and interpersonal relations, and that the Japanese lack the most important principle in human life, namely, selfinitiating behavior. Similarly, Nakamura (1968) argues that Japanese Shintoism dramatically influenced the ways that Buddhism and Confucianism were interpreted in Japan, and weakened the importance of universally applicable moral principles emphasized in Buddhism and Confucianism.Google Scholar
- 6.Emphasis on interpersonal relationships seems to be rather unique to Japan, since mutual dependence and cooperation in China mainly remain around family relationships and those in Korea tend to be quite weak (Whitley, 1992:174, 186, 197).Google Scholar
- 7.Before the introduction of the factory system, the contract work system was predominant. A firm contracted out production to masters (oyakata), some of whom used contractor’s production facilities, while some used their own workplaces. But relationships between an employer and direct employees (shokuin and some oyakata) and between masters (oyakata) and their subordinates (shokunin and totei) in manufacturing activities were bonded by feudalistic interpersonalism with a strong sense of unlimited reciprocity (Hazama, 1984:33-35). There was hardly any freedom on the part of totei to even express their complaints.Google Scholar
- 8.See Maruyama (1961), Otsuka (1973), Kawashima (1950), Minami (1955), and Nakamura (1968).Google Scholar