Institutional changes and corporate strategies for survival in the Japanese semiconductor industry

Abstract

Japan has developed its business system by making heavy use of its inherited traditions (Whitley, 1992). Instead of simple-mindedly focusing on such neoclassical concepts as profit, price, cost, and quantity to achieve allocating or accounting efficiency, Japanese companies and the government have strongly emphasized non-allocative or production efficiency, promoting worker participation, long-term relations, cooperative learning, and capability building1 (Leibenstein, 1987; Dore, 1987; Porter, 1990; Ettlinger, 1991). Institutional arrangements2 and various systems were developed to enhance this Japanese heritage, especially by promoting cooperation among economic actors and orchestrating harmonies in industrial, inter-firm and government-business relations, which consequently functioned well to achieve an effective mix of allocative and non-allocative efficiency (Abegglen, 1958; Dore, 1973, 1986; Aoki, 1984; Iwata, 1977; Tsuda, 1984; Imai, 1988a, 1988b; Johnson, 1982; Kitschelt, 1991). © 2006 Yoshitaka Okada.