Abstract
This paper addresses challenges for Japanese firms in innovation, drawing on a framework to categorize innovation by its boundary and our understanding of organizational characteristics of Japanese corporate systems. Innovation can be categorized into four levels by its boundary, that is, the scope of changes to be involved. Four levels are of innovation within component, innovation between components (within product), innovation between products (within market), and innovation between markets (within institution). When the boundary of innovation is limited, necessary coordination could be made within a small group of people. Japanese firms are more likely to succeed in such innovations, since they have advantage in frontline-led consensus building based on long-term employment and inter-firm relations. Once the boundary of innovation exceeds such limited scope, particularly across two or more different markets, however, political reconciliation of different interests or charismatic leadership is necessary to build a consensus among heterogeneous social actors.
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Notes
- 1.
Systems of collaboration here are similar to a cooperative system described by Barnard and Simon in their theories of organizational equilibrium, which includes customers as well.
- 2.
Venture capital funding or corporate acquisition can be used as a market mechanism for building a consensus about a new idea with uncertainty. While firms in the United States are good at utilizing these systems, they are still under development in Japan.
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Takeishi, A., Numagami, T. (2010). Boundaries of Innovation and Social Consensus Building: Challenges for Japanese Firms. In: Itami, H., Kusunoki, K., Numagami, T., Takeishi, A. (eds) Dynamics of Knowledge, Corporate Systems and Innovation. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-04480-9_2
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