Managing Suppliers: Incentive Systems in Japanese and U.S. Industry

Ministry of International Trade and Industry, Annual Report on Small Enterprises (Tokyo: MITI, 1984) [in Japanese], p. 401; Cole Robert E. Yakushiji Taizo , The American and Japanese Auto Industries in Transition (Ann Arbor, MI: Center for Japanese Studies, University of Michigan, 1984), p. 151.

Ministry of International Trade and Industry, White Paper on Small and Medium Enterprises in Japan (Tokyo: MITI, 1987), pp. 36–37.

Cole Yakushiji , op. cit.; Alexander Arthur J. , “Adaptation to Change in the U.S. Machine Tool Industry and the Effects of Government Policy,” unpublished, RAND Corporation, March 1989; Dertouzos Michael L. Lester Richard K. Solow Robert M. , Made in America: Regaining the Productive Edge (Cambridge, MA: MIT Press, 1989), pp. 102, 121; Burt David N. , “Managing Suppliers up to Speed,” Harvard Business Review (July/August 1989), pp. 127–135; March Artemis , “The U.S. Commercial Aircraft Industry and Its Foreign Competitors,” in The Working Papers of the MIT Commission on Industrial Productivity (Cambridge, MA: MIT Press, 1989).

The practical implications of this new theory are further explored in McMillan John , Strategic Decisions: Using Game Theory in Management (Oxford University Press, forthcoming).

Friedman David , The Misunderstood Miracle: Industrial Development and Political Change in Japan (Ithaca, NY: Cornell University Press, 1988), p. 149; Ministry of International Trade and Industry, White Paper on Small and Medium Enterprises in Japan (Tokyo: MITI, 1988), p. 71; Aoki Masahiko , “The Japanese Firm in Transition,” in Yamamura K. Yasuba Y. , eds., The Political Economy of Japan. Vol. 1: The Domestic Transformation. Stanford, CA: Stanford University Press, 1987).

Radner Roy , “Repeated Principal-Agent Games with Discounting,” Econometrica, 53 (September 1985): 1173–1198.

Dore Ronald , “Goodwill and the Spirit of Market Capitalism,” British Journal of Sociology, 34 (December 1983): 459–482; Macauley Stewart , “Non-Contractual Relations in Business,” American Sociological Review, 28 (1963): 55–67; Coase R. H. , “The Nature of the Firm: Influence,” Journal of Law, Economics, and Organization, 4 (Spring 1988): 33–48.

Asanuma Banri , “Manufacturer-Supplier Relationships in Japan and the Concept of Relation-Specific Skill,” Journal of the Japanese and International Economies, 3 (March 1989): 1–30; Aljian George W. , ed., Purchasing Handbook (New York, NY: McGraw-Hill, 1958), p. 6–29.

Fruin Mark , “Interfirm Networks: Multi-layered Managerial Coordination and the Toyota Enterprise Group,” unpublished, Department of History, California State University, Hayward, no date; Trevor Malcolm Christie Ian , Manufacturers and Suppliers in Britain and Japan (London: Policy Studies Institute, 1988), p. 41.

Asanuma Banri , “Japanese Manufacturer-Supplier Relationships in International Perspective: The Automobile Case,” Working Paper No. 8, Faculty of Economics, Kyoto University, September 1988; Itami Hiroyuki Senbongi Shuichi , “Competition by Visible Hand and Subcontracting Efficiency,” unpublished, Hitotsubashi University, 1988; Nishiguchi Toshihiro , “Competing Systems of Automotive Components Supply: An Examination of the Japanese ‘Clustered Control’ Model and the ‘Alps’ Structure,” IMVP Working Paper, MIT, 1987; Mishina Kazuhiro , “Technological Progress and Vertical Structure of Industrial Organizations: A Study of Vendor Relations in the Semiconductor Industry,” unpublished, Harvard University, June 1988.

Williamson Oliver E. , Markets and Hierarchies (New York, NY: Free Press, 1975).

Monteverde Kirk Teece David J. , “Supplier Switching Costs and Vertical Integration in the Automobile Industry,” Bell Journal of Economics, 13 (Spring 1982): 206–213; Masten Scott , “The Organization of Production: Evidence from the Aerospace Industry,” Journal of Law and Economics, 27 (1984): 403–417.

Nishiguchi , op. cit.; Cole Yakushiji , op. cit., p. 162; Asanuma (1989), op. cit.

Gansler Jacques S. , The Defense Industry (Cambridge, MA: MIT Press, 1982), p. 133.

Itami Senbongi , op. cit.; Monteverde Teece , op. cit.; The Economist, “The Arrival of Haute Carture,” July 29, 1989, p. 54; Fruin , op. cit.

Walker Gordon Weber David , “A Transaction Cost Approach to Make-or-Buy Decisions,” Administrative Science Quarterly, 29 (September 1984): 373–391.

Friedman , op. cit., p. 158; Ministry of International Trade and Industry (1987), op. cit., p. 114.

Kalleberg Arne L. Lincoln James R. , “The Structure of Earnings Inequality in the United States and Japan,” American Journal of Sociology, 94 (Supplement, 1988): S121–S153.

Carlsson Bo , “The Evolution of Manufacturing Technology and Its Impact on Industrial Structure: An International Study,” Small Business Economics, 1 (1989): 21–38; Nishiguchi , op. cit.; Winter Ralph E. , “Small Machining Firms Get Boost from Computers,” Wall Street Journal, April 17, 1989, p. B2.

Holmstörm Bengt Milgrom Paul , “Aggregation and Linearity in the Provision of Intertemporal Incentives,” Econometrica, 55 (1987): 303–328.

Asanuma Banri , “The Contractual Framework for Parts Supply in the Japanese Automotive Industry,” Japanese Economic Studies, 15 (Summer 1985a): 54–78; Asanuma Banri , “The Organization of Parts Supply in the Japanese Automotive Industry,” Japanese Economic Studies, 15 (Summer 1985b): 32–53; Asanuma (1989), op. cit.

Asanuma (1988), op. cit.

Kawasaki Seiichi McMillan John , “The Design of Contracts: Evidence from Japanese Subcontracting,” Journal of the Japanese and International Economies, 1 (September 1987): 327–349.

Ibid.

Asanuma (1985b, 1988), op. cit.; Walker Weber , op. cit.

Berger Suzanne D. Piore Michael J. , Dualism and Discontinuity in Industrial Societies (Cambridge: Cambridge University Press, 1980).

Holmström Bengt , “Moral Hazard in Teams,” Bell Journal of Economics, 13 (1982): 324–340.

Itami Senbongi , op. cit.; Fruin Mark , “Cooperation and Competition: Supplier Networks in the Japanese Electronics Industry,” unpublished, Department of History, California State University, Hayward, 1987.

Baron David P. Besanko David , “Regulation and Information in a Continuing Relationship,” Information Economics and Policy, 1 (1984): 267–302.

Asanuma (1988), op. cit.

Laffont Jean-Jacques Tirole Jean , “Repeated Auctions of Incentive Contracts, Investment and Bidding Parity, with an Application to Takeovers,” Rand Journal of Economics, 19 (Winter 1988): 516–537.

MITI (1988), op. cit., p. 72; Asanuma (1989), op. cit.

Fruin (1987), op. cit.; Asanuma (1989), op. cit.

Asanuma (1988), op. cit.; Nishiguchi Toshihiro , “Reforming Automotive Purchasing Organization in North America: Lessons for Europe?” unpublished, MIT, May 1988; Cole Yakushiji , op. cit., p. 166; Dertouzos Lester Solow , op. cit.

Asanuma (1988), op. cit.; Itami Senbongi , op. cit.; Ono Yoshiyasu , “Subcontracting and Monopsony in Parts Acquisition,” Discussion Paper No.105, Woodrow Wilson School, Princeton University.

Asanuma (1988), op. cit.

McAfee R. Preston McMillan John , “Auctions and Bidding,” Journal of Economic Literature, 25 (June 1987): 699–738.

Ibid.

Wada Junzo , “A Case History of Guidance and Upgrading of Subcontracting Firms,” Intra-National Transfer of Technology (Tokyo: Asian Productivity Organization, 1976); Asanuma (1988), op. cit.

Walker Weber , op. cit.

McAfee R. Preston McMillan John , “Organizational Diseconomies of Scale,” unpublished, University of California, San Diego, 1989; Melamud Nahum Mookherjee Dilip Reichelstein Stefan , “Hierarchical Decentralization of Incentive Contracts,” unpublished, Stanford University, April 1989.

Hayek F. A. , “The Use of Knowledge in Society,” American Economic Review, 35 (September 1945): 519–530.

Asanuma (1989), op. cit.; Nishiguchi (1987), op. cit.; Yokokura Takashi , “Small and Medium Enterprises,” in Komiya R. Okuno M. Suzumura K. , eds., Industrial Policy of Japan (Tokyo: Academic Press, 1988).

Asanuma (1988), op. cit.; Nishiguchi (1987), op. cit.

Nishiguchi (1988), op. cit.; Trevor Christie , op. cit.

March , op. cit.

Asanuma (1989), op. cit.; Fruin (1987), op. cit.