Bridging inter- and intra-firm boundaries: management of supplier involvement in automobile product development

Outsourcing has become an important strategy for many firms. Yet, firms need to compete with their competitors who also outsource and may share the same suppliers. This article explores how a firm could outperform others in managing the division of labor with a supplier in product development. Drawing on the empirical data collected from the Japanese auto industry, this paper shows that an automaker needs capabilities to coordinate various activities both externally with a supplier and internally within its own organization, in order to gain better component development performance. Overall, the results imply that outsourcing does not work effectively without extensive internal effort. Copyright © 2001 John Wiley & Sons, Ltd.     

Supplier relations and management: A survey of Japanese,Japanese-transplant,and U.S. auto plants

This article presents the results of a questionnaire survey sent to a sample of automobile manufacturers in the United States and Japan (including Japanese-managed plants in the United States) during the spring of 1990. The data support observations that Japanese and U.S. practices tend to differ in key areas and Japanese suppliers perform better in dimensions such as quality (defects) and prices (meeting targets, reducing prices over time); and that Japanese-managed auto plants established in the United States have, in general, adopted Japanese practices and receive extremely high levels of quality from Japanese as well as U.S. suppliers. These findings provide evidence that Japanese practices and performance levels are transferable outside Japan and suggest that considerable improvements are possible for U.S. suppliers supplying U.S. auto plants. In addition, the survey indicates that U.S. firms have adopted at least some practices traditionally associated with Japanese firms, apparently reflecting some convergence toward Japanese practices and higher performance levels in supplier management.     

Innovators, Organization Structure and Management of the Innovation Process in the Securities Industry

This article examines innovation in the securities industry with the central objective of identifying factors that separate innovators from non-innovators. Akira Iwamura and Vijay Jog report results based on their survey of corporate finance vice presidents or CEO's of 43 investment houses from around the world. They conclude that innovative companies seem to be larger and have a well-defined strategy, with management defining the focus of the business. In addition, the firms have developed better communication channels, both internally and with their customers. Yet, the most significant difference that separates innovators from non-innovators is their management of the idea generation process, including concept generation and management's support. Innovators tend to approach idea generation in the following ways: they employ a variety of idea sources, both internal and external; they assign a specific person or group to be in charge of developing new ideas; they encourage employees at all levels to generate new ideas; they use a variety of innovative techniques to stimulate creativity; they reward their employees by non-monetary means; and they encourage group-level participation in evaluation decisions.     

Public Monopoly,Mixed Oligopoly and Productive Efficiency

In general, the introduction of competition into the public sector seems to lead to higher cost‐efficiency in service production. However, there are examples of substantial cost increases in some areas. In this paper, using a mixed oligopoly model, we investigate the effects of deregulation on the cost‐reducing incentives of a public firm. Our results show that a firm that is a public monopoly has greater incentive to conduct cost‐reducing investment than a public firm within mixed oligopoly market.     

Book Reviews

R.J. May and W.J. O'Malley (eds), Observing Change in Asia. Essays in Honour of J.A.C. Mackie, Bathurst: Crawford House Press, 1989, pp. 265. Paper: A$20.00.

Michael R. Dove (ed.), The Real and Imagined Role of Culture in Development: Case Studies from Indonesia, Honolulu: University of Hawaii Press, 1988. US$ 32.00.

Fukuo Ueno, Desa Cimahi: Analysis of a Village on Java during the Japanese Occupation (1943), Rotterdam: Comparative Asian Studies Programme (GASP), Erasmus University, 1988, pp. 291 + xi.

Sritua Arief and Adi Sasono, Modal Asing, Beban Hutang Luar Negeri dan Ekonomi Indonesia, Jakarta: LSP dan UI Press, 1987, pp. 69 + xix.

BRIEFLY NOTED: World Bank, World Debt Tables 1989–90, 2 Vols, Washington Dc, 1989.

Mohan Munasinghe, Energy Analysis and Policy, London: Butterworths, 1990, pp. 315 + xx; Electric Power Economics, London: Butterworths, 1990, pp. 323 + xviii.     

Vertical Restraints and Market Access

This paper analyzes vertical restraints in relation to market access issues. In Section II we briefly review the recent three major trade conflicts between Japan and the USA in light of vertical restraints. In Section III we review the major policy lessons of the economics literature of vertical restraints, and analyze whether we need a special treatment for vertical restraints abroad for a market access reason. In Section IV we evaluate the policy options towards foreign foreclosure and suggest that nondiscriminatory application of foreign or home competition policy should be the mechanism to address such concern instead of trade policy actions such as voluntary import expansions.     

Inefficient but Robust Public Leadership

We investigate endogenous timing in a mixed duopoly in a differentiated product market. We find that private leadership is better than public leadership from a social welfare perspective if the private firm is domestic, regardless of the degree of product differentiation. Nevertheless, the public leadership equilibrium is risk-dominant, and it is thus robust if the degree of product differentiation is high. We also find that regardless of the degree of product differentiation, the public leadership equilibrium is risk-dominant if the private firm is foreign. These results may explain the recent revival of public financial institutions in Japan.     

The effect of social distancing on the reach of an epidemic in social networks

How does social distancing affect the reach of an epidemic in social networks? We present Monte Carlo simulation results of a susceptible–infected–removed with social distancing model. The key feature of the model is that individuals are limited in the number of acquaintances that they can interact with, thereby constraining disease transmission to an infectious subnetwork of the original social network. While increased social distancing typically reduces the spread of an infectious disease, the magnitude varies greatly depending on the topology of the network, indicating the need for policies that are network dependent. Our results also reveal the importance of coordinating policies at the ‘global’ level. In particular, the public health benefits from social distancing to a group (e.g. a country) may be completely undone if that group maintains connections with outside groups that are not following suit.