Globalization, vertical relations, and the J-mode firm

Abstract

This paper is concerned with two overlapping issues. In the first instance, we consider the apparent tensions between the visible effects of globalization upon the Japanese economy and the claims of successive commentators that novel Japanese production systems of coordination and vertical supply are particularly conducive to both national and regional industrial stability. Second, we set out a critical reassessment of the lessons that the literature has drawn to date from both the evident successes and current difficulties of Japan's post-World War II economy; taking as the frame of reference contributions such as Aoki (1988; 1990b; 1994) on the J-mode firm, Katzner (1999) on comparative economy and culture, and Porter et al. (2000) on Japan's present economic crisis. This paper argues that (1) the basis for many of the claims of historic novelty in forms of material organization in Japanese industry is surprisingly weak, (2) these claims have encouraged an unwarranted tendency toward neglect of the problems posed for the national and regional economy by the globalizing activities of Japan's large transnational corporations, and (3) analysis should dwell less on the supposed novelties at the point of interface between production unit and market or in the conduct of vertical supply relations, and more on the lessons to be drawn from a careful study of the past achievements of, and current political-economic impasse in, state strategic planning and the role of industrial policy.

Keywords:

• globalization
• hierarchy
• J-mode firms
• production coordination
• strategic decision-making
• vertical relations