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- W2503635120 abstract "The Japanese auto industry is not only less integrated into parts production than the U.S. Big Three, but it also organizes purchasing differently. In Japan, car makers typically contract out subassembly and component manufacturing, while the Big Three primarily purchase simple parts. Thus while Chrysler may buy from 5,000 suppliers (and GM 20,000), Japanese auto companies buy from 200-300 firms--though these direct suppliers subcontract simple parts production to numerous small firms. Likewise, procurement in Japan is based on long-term partnerships rather than the short-term contracting which has been typical of the U.S. until the past five years. One consequence is that Japanese auto firms are smaller. In 1985 Toyota and Nissan together employed a scant 120,000, while in North America GM alone employed 419,000 in 1988. This pattern is repeated across most industries; two-thirds of the entire Japanese labor force are found in small establishments, while two-thirds of U.S. workers are in large firms. Because of this structure, managers at Japanese suppliers take over tasks which in Detroit are performed by the of middle management. In particular, Japanese managers at both suppliers and assemblers face the challenge of coordinating activities across firm boundaries. The Japanese auto industry developed innovative approaches to contracting to govern this system, which influenced practice in much of manufacturing. The parallel is obvious. While in the U.S. in the 1920s GM was one center for experimentation with the visible hand of internal management, in Japan in the 1950s Toyota developed an invisible handshake for managing strategic purchasing. The implications mirror those in the U.S.--having lowered interfirm transactions costs, Japanese companies on the margin resorted to purchasing rather than vertical integration. Management innovations in Japan led not to an increase in the scale of firms, but (on the margin) to a decrease in scale." @default.
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- W2503635120 date "2016-01-01" @default.
- W2503635120 modified "2023-09-27" @default.
- W2503635120 title "The Invisible Handshake: The Development of the Japanese Automotive Parts Industry" @default.
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