Index Accenture, 44, 45 ACT Map scenario, 282 agency costs, 218 agency theory, 224, 248, 254 air pollution, measures to reduce, 276 7 AMD, 35 anti-locking braking systems (ABS), 275 antitrust laws, 17, 118 Apache, 53 ASET, 34 Asia, economic consolidation in, 306 Asian financial crisis, 219, 242 Asian Research Area (ARA), 306 Asuka, 34 Augustine report, 301 automobiles, problems caused by, 273, 274 automotive industry, 142 automotive technology policy, 10 11, 273 90 air pollution measures, 276 7 future directions for, 288 90 global warming and, 273, 274, 277 9, 281 8 process for determining, 279 81 safety measures, 274 5 base pay, 32, 71, 72, 75 Basic Survey of Japanese Business Structure and Activities, 3, 166 7, 188n2 best-in-class, 4, 92 block ownership, 226, 229, 236 BLUE Map scenario, 282 3 board of directors, 248 bonuses, 32 3 bubble economy, 1, 137, 218, 222 bureau pluralism, 280 business failures, 26 business environment, changes in, 219 business relationships see also keiretsu long-term, 4, 5, 49, 53, 221 capital intensity, 228 Chief Information Officer (CIO), 59 China FDI inflows, 191 2, 193 intellectual property rights in, 192 3, 199 200 manufacturing outsourcing to, 33 4 offshore design centers in, 34, 35 rise of, 296 start-ups in, 22 Chinese patents, 8 9, 191 215 by Japanese MNEs, 197 214 surge in, 195 7, 213 14 system for, 194 5 Cisco Systems, 111 closed innovation paradigm, 129 cloud computing, 66 CO2 emissions, 281 2, 288 9 compartmentalized pluralism, 280 complex product industries, 200 1 computer industry, early development of, 46 9 contingent governance, 9 contracts, 111, 120, 132n5 cooperative ventures, 24, 25 corporate divisions, 23 4 corporate governance, 218 20 contingent governance, 9 evolution of Japanese, 2, 9 10, 220 4, 226 market-based model of, 73 5, 221 profitability and, 230 43 relationship-based, stakeholderoriented model of, 220 1, 225 6 role of, 226 shareholder-oriented, 222 3 study data and methodology, 227 30 309
310 Index corporate governance continued study results, 230 40 theory and hypotheses on, 224 7 corporate groups, 225 corporate headquarters, R&D concentrated in, 8 corporate performance governance and, 219 20, 230 43 impact of FDI on, 161 4, 166, 182 5, 187 crash safety standards, 275 credit crunch, 18 19 customized software, 55 61 discretionary labor, 80, 82, 86n3 domestic alliances, 6 7, 117 22, 126 7 dynamic random-access memory (DRAM), 15, 18, 19, 20 electric vehicles (EVs), 10 11, 282 8, 289 90 electronics industry corporate governance in, 227 human-resource management in, 79 84 issues facing, 84 5 Elpida, 32, 35 emerging companies see also start-ups paths for, 23 6 support for, 27 employee classifications, 71, 75 8, 82 employee evaluations, 71, 72, 75, 106 7 employee morale, 12, 32 3 employees regular vs. nonregular, 76 7, 81 4 roles of, 71, 75 energy consumption, measures to reduce, 277 9 engineering innovativeness, 6 engineering innovativeness determination model, 94 100 engineers, see Japanese engineers enterprise software industry, 41 67 executive compensation, 247 see also stock options executive officer organization, 219 executive ownership, 236 7 executive shareholding, 224 executive structure, 229 fabless business model, 23 Fab Solutions, 24 5 factory models, of software development, 49 52 FDI, see foreign direct investment (FDI) financial ownership, 229, 236 financial sector, evolution of Japanese, 2 foreign direct investment (FDI), 8 in China, 191 2, 193 impact on financial performance, 161 4, 166, 182 5, 187 impact on inter-firm transactions, 178, 181, 184 5, 186 impact on personnel allocations, 173 9, 182, 185 impact on R&D, 178 80, 184 7 intellectual property rights and, 192 Japanese firms strategies of, 8 managerial decisions and, 161 81 patenting practices and, 8 9, 201 14 research on, 162 5 foreign expansion patterns, 167 8, 169 foreign investors, 226 foreign ownership, 229, 236, 237 foreign subsidiaries, 164 foundries, 18, 23, 35 France, 93 fuel-cell vehicles (FCVs), 282 3, 288, 289 90 fuel-efficiency standards, 277 81 Fujitsu, 15, 35, 45, 46, 48 General Motors (GM), 115 16 Germany, 91, 93, 137, 296 global competition, in semiconductor industry, 17 18 global financial crisis, 292 global innovation ecosystem (GIES), 11, 304 5
Index 311 globalization, 296 consequences of, 293 Japanese responses to, 2 global strategic model, 164 5, 187 global warming, 10 11, 273, 274, 277 9, 281 8 governance, of Japanese firms, 220 244 government policies industrial technology policy, 10 11 science and technology policy, 11 government research consortia, 118 22 Great Depression, 1 Hashimoto cabinet, 2 Heisei recession, 218, 227 Herfindahl-Hirschman Index, 259 Hewlett Packard, 67, 111 high-commitment HRM system, 27 32, 36 high-innovation HRM systems, 28 32 high-tech companies, 2 Hitachi, 15, 35, 46, 49, 86n4 human-resource management, 5 6, 14 15, 31 3, 70 87 comparison between US and Japan, 73 8 in electronics industry, 79 84 evolution of Japanese, 31 3, 70 87 high-commitment, 27 32, 36 high-innovation, 28 32 in Japan, 14 15, 70 87 Japanese engineers and, 107 performance-based pay, 32 3 performance management and, 79 84 in semiconductor industry, 36 in US, 73 5, 77 8 hybrid electric vehicles (HEVs), 289 IBM, 4, 15, 44, 46 50, 57 8, 62, 66 7 import protection, 15 incentive theory, 248 incubators, 27 independent spin-out model, 24 5 independent start-ups, 24, 25, 26 India outsourcing to, 34 rise of, 296 indirect hiring, 81 2, 85 industrial technology policy, 10 11 influence peddling, 269 information service firms, 44 information systems, methods of building, 54 6 information technology, 41 deployment and migration in Japanese firms, 53 4 innovation, 88 closed innovation paradigm, 129 Japanese engineers and, 91 4 national innovation system, 292 open innovation paradigm, 7 process innovation, 295 product innovation, 295 start-ups and, 22 3 theory of, 292 3 innovation ecosystems, 11, 302 5 innovation policy, 300 2 Intel, 17, 18, 19 intellectual property rights, 191 3, 199 200 intellectual property strategies, 8 9 inter-corporate relationships, 6 7 inter-firm transactions, impact of FDI on, 178, 181, 184 5, 186 internal combustion engines (ICEs), 281 2 international alliances, 112 17 international diversity, 228 International Panel on Climate Change (IPCC), 282 international strategic model, 164 5, 187 Internet, 296 inter-organizational networks, 110 interpersonal relationships, in workplace, 102 3 intra-industry alliances, 120 1 investment see also foreign direct investment (FDI) decline in, 18 19 in human resources, 105 6 in IT, 18, 66 public, in science and technology, 11, 294 5 in R&D, 119 22
312 Index investment trusts, 222 Japanese Automobile Manufacturer s Association (JAMA), 279 80 Japanese banking crisis, 2 Japanese engineers, 5 6, 88 108 countermeasures for improving conditions of, 105 8 deficit of new, 104 5 education and training for, 88 factors enhancing performance of, 98 100 female, 106 future trend affecting, 100 5 innovativeness of, 88, 91 100 labor unions and, 107 8 motivation of, 88 9, 103 4 pay-for-performance systems and, 88 9, 106 teamwork evaluations for, 106 7 work environment of, 89 90, 101 3, 105 6 Japanese software industry, 4 5, 41 67 compared with US, 41 3 system integration market, 43 6 Java, 53 job motivation, of Japanese engineers, 103 4 joint R&D programs, 151 6 keiretsu, 43, 48, 49, 61, 67, 109, 119 31 diminishing role of, 127 30 vs. strategic alliances, 125 7 labor market mobility, 32 3 norms, 27 31 semiconductor industry and, 36 labor productivity, of Japanese engineers, 93 4 labor unions, 107 8 Latin America, in 1980s, 1 legal reforms, 221 lifetime employment, 225 Linux, 53 long-term employment, 225 lost decade in Japan, 1 2, 137, 138 9, 218 meaning of term, 1 mainframe computing, 43, 52, 53 4 management strategies, 8 9 managerial autonomy, 218, 248 managerial decisions analytical model and data set for, 165 72 FDI strategies and, 161 81 managerial enterprise, 225 manufacturing centers, 8 manufacturing outsourcing, 33 4, 162 market-driven personnel systems, 72 3 Matsushita Electric, 121 2 Matsushita Group, 127 MegaChips, 25 memory chips, 15, 16, 18 20 meritocratic management, 72 Microsoft, 62 milking theory, of Japanese strategic alliances, 114 15 Mirai, 34 Mitsubishi, 35, 49, 121 2 multinational enterprises (MNEs), Chinese patents and, 191 2, 197 214 multinational strategic model, 164 Mu Solutions, 23 4 national innovation system, 292 NEC, 16, 17, 32, 35, 46, 48, 49 new companies, see start-ups new-energy vehicles, 11 NOx law, 276 NUMMI, 115 16 open architecture, 52 4 open innovation paradigm, 7 Open Source Systems (OSS), 53 Oracle, 62, 67 organizational performance management systems, 5 organizational structures, in electronics industry, 79 80 outsourcing manufacturing, 162
Index 313 outsourcing continued R&D, 7 8, 142 51 in semiconductor industry, 33 4 ownership structure, 225 block ownership, 229, 236 changes in composition of, for Japanese firms, 221 4 executive ownership, 236 7 executive structure, 229 financial ownership, 229, 236 financial performance and, 230 43 foreign ownership, 229, 236, 237 packaged software, 54 5, 62 6 Palmisano report, 300, 301 2 partnership networks, 120 1 patents, 91 3 Chinese, 8 9, 191 215 FDI and, 201 14 pay base, 32, 71, 72, 75 performance-based, 5, 32 3, 71, 72, 85, 88 9, 106, 247 seniority-based, 72 pension funds, 222 performance-based pay, 5, 32 3, 71, 72, 85, 88 9, 106, 247 performance evaluations, 71, 72, 75, 106 7 performance management, 73 5, 79 84 performance measures, 228 personal computers, 19 personnel allocations, impact of FDI on domestic, 173 9, 182, 185 personnel development, 84 personnel evaluations, 71, 72, 75, 106 7 personnel management, see humanresource management personnel systems see also human-resource management evolution of, 70 8 market-driven, 72 3 pharmaceutical industry, 113 Plaza Accord (1985), 17, 161 PostgresSQL, 53 process innovation, 295 product diversity, 228, 236 product innovation, 295 profitability, 219, 220 1, 225, 226 quality-first mentality, 52 regulatory standards, 10, 219, 273 4 for automotive industry, 274 9 process for determining, 279 81 relational management, 48 Renesas, 32, 34, 35 research and development (R&D), 7 8 adaptive, 192 closed, 8, 129, 187 concentrate in corporate headquarters, 8 consortia, 118 22 environment for, 88 expenditures on, 137 9 external, 7 8, 142 51 impact of FDI on, 178 80, 184 7 in-house, 144 50 investment in, 295 6 joint, 151 6 joint, in semiconductor industry, 34 5 local-support-oriented, 192 management, 137 59 open, 143, 180, 187 outsourcing, 7 8, 142 51 private sector, 137 8 research-oriented, 192 in semiconductor industry, 22 3 resource-dependence perspective, 152 3, 156 retention issues, 84 5 return on assets (ROA), 9, 237 risk-sharing, 125 7 role-based employee classifications, 75 8, 82 safety measures, in automotive industry, 274 81 Samsung, 17, 18, 25 SAP, 62 Science and Technology Basic Law, 11 enactment of, 296 7 overview of, 297 8 significance of, 298 9
314 Index Science and Technology Basic Plan, 302 science and technology policy, 11, 292 306 historical survey of Japanese, 293 7 innovation policy and, 300 2 postwar era, 293 4 in twenty-first century, 300 5 Science: The Endless Frontier, 294 search-cost perspective, 152 3, 156 Selete, 34 SEMATECH, 17 semiconductor industry, 3 4, 14 38 changes in industry leadership, 16 domestic market and, 19 21 excess capacity in, 36 fabless business model, 23 global competitors in, 17 18 government support of, 15 home substitution index for semiconductor sales, 20 1 human-resource management in, 27 33, 36 outsourcing in, 33 4 reasons for decline of Japanese, 18 27 research and development in, 34 5 restructuring and reform in Japanese, 14, 33 7 rise of Japanese, 15 17 start-ups in, 21 7 US, 15 19, 22 Semiconductor Industry Association (SIA), 17 seniority-based pay, 72 shareholder orientation, 219 shareholders, 218 shareholder value, 220 1, 222, 224, 226 Silicon Valley model, 24, 25 6 software, 41 customized, 55 61 packaged, 54 5, 62 6 Software Engineering Institute (SEI), 51 software engineers, 31, 63 software factories, 4, 49 52 software industry, 4 5, 41 67 customization, 56 61 early development of, 46 9 factory models of software development, 49 52 Japan, 41 3, 51 67 methods of building information systems, 54 6 open architecture, 52 4 system integration market, 43 6, 56 61 US, 41 3, 55 8, 62 3 Sony, 35 South Korea, 17 19, 92 Spansion, 35 start-ups, 14 independent, 24, 25, 26 lack of support for, in Japan, 21 7 paths for new, 23 6 support for, 27 US, 18 State Intellectual Property Office (SIPO), 194 5 stockholder interests, 9 stock options, 9 10, 219, 247 71 strategic alliances, 6 7, 109 32 see also keiretsu critique of Japanese, 113 17 defining, 110 12 domestic, 117 22, 126 7 government research consortia as, 118 22 international, 112 17 subsidiaries, 23 4, 164 Sun Microsystems, 53, 67 System Development Corporation (SDC), 50 1 system integration market, 43 6, 56 61 system integration services, 42 Taiwan, 18 19, 22 technological change, 88 technological revolution, 14 technology fusion, 119 20, 121 technology policy, see automotive technology policy; science and technology policy technology trade, 139 42 technology transfer, 15 Texas Instruments, 15, 16, 19
Index 315 theory of managerial sovereignty, 10, 248 58, 267 71 theory of shareholder sovereignty, 248 50, 251 7, 267, 271 THine Electronics, 25 Toshiba, 16, 32, 34, 35, 49 Toyota, 115 16, 132n3, 132n6 trade friction, US-Japan, 294 6 trade partners, 141 transportation equipment industry, 141 TSMC, 18 UMC, 18 United Kingdom, 1, 93 United States competitiveness of, 300 2 computer industry in, 46 7 corporate governance in, 218 after Great Depression, 1 human-resource management in, 73 5, 77 8 innovation policies, 301 labor market mobility in, 32 3 labor market norms in, 27 31 semiconductor industry in, 15 19, 22 software industry, 41 3, 49 51, 55 8, 62 3 start-ups in, 22 system integration market, 43, 44 technological trade friction between Japan and, 294 6 US Council on Competitiveness, 300 US government policy, semiconductor industry and, 17 US Patent and Trademark Office (USPTO), 192 vehicle design standards, 275 vertical business model, 4 5, 17 vertical markets, in software industry, 41, 47 9, 65 vertical partnerships, 53, 109, 121 31 wage management, 73 4, 76 8, 82 women engineers, 106 in labor force, 76 work environment, for Japanese engineers, 89 90, 101 3 work hours, 89 90, 101 2, 105 6 work-life balance, 84, 87n7, 89 90, 101 workplace culture, 102 3 World War II, 294 Young report, 300 zaibatsu, 123 4 Zero Emission Vehicle (ZEV) regulations, 289 90