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Institutional Changes and Corporate Strategies for Survival in the Japanese Semiconductor Industry

  • Chapter
Struggles for Survival

Abstract

Japan has developed its business system by making heavy use of its inherited traditions (Whitley, 1992). Instead of simple-mindedly focusing on such neoclassical concepts as profit, price, cost, and quantity to achieve allocating or accounting efficiency, Japanese companies and the government have strongly emphasized non-allocative or production efficiency, promoting worker participation, long-term relations, cooperative learning, and capability building1 (Leibenstein, 1987; Dore, 1987; Porter, 1990; Ettlinger, 1991). Institutional arrangements2 and various systems were developed to enhance this Japanese heritage, especially by promoting cooperation among economic actors and orchestrating harmonies in industrial, inter-firm and government-business relations, which consequently functioned well to achieve an effective mix of allocative and non-allocative efficiency (Abegglen, 1958; Dore, 1973, 1986; Aoki, 1984; Iwata, 1977; Tsuda, 1984; Imai, 1988a, 1988b; Johnson, 1982; Kitschelt, 1991).

Efficiency is understood as generating a maximum total value of outputs from any given set of inputs (Shepherd, 1997) and is an outcome of a combination of both allocative and non-allocative efficiency. The former is accomplished by allocating resources to maximize the output most effectively achieved by introducing competition and rewarding a winner in a market, and the latter is determined by other factors such as developing group dynamics, soliciting commitment, and stimulating motivational drives

An institutional arrangement is a set of interrelated systems that regulates intersystem relations and the behavior of individuals and organizations in recurrent situations in a society

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© 2006 Yoshitaka Okada

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Okada, Y. (2006). Institutional Changes and Corporate Strategies for Survival in the Japanese Semiconductor Industry. In: Okada, Y. (eds) Struggles for Survival. Springer, Tokyo. https://doi.org/10.1007/4-431-28916-X_4

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