Constraints to Change: Systemic Weaknesses

Constraints: limitation or restriction that prevents one from performing certain action.

Five Peculiar features of the Japanese network management model in East Asia that once may have
reflected strength but now have turned into systemic weaknesses.

*Peculiar: distinctive; characteristic of only one person, group, or thing.

1. Partial Convergence and Persistent Diversity

- Imitation has been an important force of change.

- Convergence occurred in the mix of products that are produced in Asia.

- Japan continues to lag behind the United States in its integration into the global economy.

2. Dispersed Location

- primary focus: protected local markets

- it prevents Japanese firms from reaping cost-reducing scale economies in China.

-major concern: legal framework and the tax system are opaque; both prone to frequent, sudden, and
unpredictable changes.

: availability of local managers and engineers and labor relations.

3. Sales Neglect of Asian Markets

-Japan-centered sales destination has resulted in another major weakness: a lack of aggressive strategic
marketing to address the specific requirements of East Asian markets.

-Japanese electronics firms have failed to develop and exploit unique market positions; in the high-end
markets, they are lagging behind Korean and European set makers.

-“ It is necessary to maintain non-price competitiveness in areas where differentiation is possible in

terms of technology and know-how”

-Global companies must be willing to share their accumulated experience in providing “integrated
solutions”

-According to Davies et al. (2001), “integrated solutions” encompass four sets of capabilities:

(1) system integration: designing and integrating components and subsystems into a system.

(2) operational services: maintaining, financing, renovating, and operating systems through the life
cycle.
(3) business consulting: understanding a customer’s business and offering advice and solutions that
address a customer’s specific needs

(4) finance: providing a customer with help in purchasing new capital-intensive systems and in managing
a customer’s installed base of capital assets.

4. Human Resources Management

-very limited capacity to recruit, develop, and benefit from non-Japanese skilled workers, engineers, and
managers.

-“ the cultural and linguistic gap between expatriate Japanese managers and local employees has
obscured the latter’s true feelings from the former.” (Konomoto, 2000)

-obscure selection criteria for choosing local senior managers, and persistent glass ceilings for non-
Japanese managers, de-motivate local employees.

-Japanese companies have found it difficult to recruit and retain quality managers and engineers in their
Asian subsidiaries.

-Another reason: negative image of Japanese firms as employers of skilled labor.

-To address the problem, Japanese firms have adopted a strategy of in-house training of their engineers.

-Above all, local staff needs to become an integral part of decision-making process and of the search for
solutions to problems.

5. R & D Management

-R&D continued to play a limited role in the firms.

-localization of design and engineering is necessary to customize products and services and to accelerate
speed of response to changes in demand.

Hybridization- Partnering with Asian companies

- Ways to readjust their production, distribution, and innovation networks to cope with the
opportunities and challenges.
- Japanese Electronic firms are now using successful Asian firms.
- Japanese businesses should team up with them to share profits in mutual markets.
- The key to successful alliances with Asian partners is hybridization of business organization
beyond national models.
- Asianization of production networks may be in the process of superseding in the longer run the
battle between Japanization and Americanization.
Analysis:

Japan might be a performing very well about its Electronics Businesses and Firms however, there are still
constraints that hinders the Japanese firms in having a big role in the global economy. These factors
might be extrinsic and intrinsic, definable based on the effects to the performance of the firms.

In lieu with this condition, Japanese Electronics Industry or Businesses has a big chance of success as
they improve the industry into performing collaborations and adaptation from the other Asian
countries. The devices of Japan is not only limited to the country, which means that their branding is
something to adjust and development with respect to the region or country of where they commerce
their products, services, and technology. Japan might be dependent to the region’s economy which
causes firms to struggle.