Divisional Form, Hive‐Off, and Manufacturer–Supplier Relations

Hiroyuki Odagiri

in Growth through Competition, Competition through Growth

Published in print May 1994 | ISBN: 9780198288732
Published online November 2003 | e-ISBN: 9780191596711 | DOI:
 Divisional Form, Hive‐Off, and Manufacturer–Supplier Relations

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This chapter discusses several aspects of intra‐ and inter‐company organization in Japan. The divisional form (or M‐form) is less prevalent and less complete in Japan than in the USA and the UK, but hive‐off of some activities is common and increasing. This tendency, we argue, is consistent with the human management system of Japanese firms that aims at company‐wide interaction and utilization of human resources, and the acquisition of broad as well as deep skills. As regards the supplier‐assembler relationship (the so‐called vertical keiretsu relationship), we emphasize that the practice of continuous trading by no means implies lack of competition. In this long‐term relationship, which has been indispensable to Japanese production systems, such as the just‐in‐time and kanban methods, a price adjustment scheme has been in effect in order to share risks, to guarantee returns on innovation, and to maintain the competitiveness of the final product.

Keywords: competition; divisional structure; hive‐off; innovation; just‐in‐time; kanban; keiretsu; supplier

Chapter.  11399 words. 

Subjects: Business and Management

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