Interfirm Relationships in the Japanese Machine Tool Industry, 1910s-1980s : Market and Organizational Principles

Machine tools are called as “mother machines” as they contribute to producing various kinds of machines that enable many manufacturing industries to develop. In fact, Japanese machine tool products support the growth and strong competitiveness of many manufacturing industries in Japan. Consequently, interfirm relationships between machine tool makers and their customers are worthy of examining. Many scholars emphasize that Japan’s interfirm relationships are illustrated by “obligational contractual relationships”, primarily reflecting the organizational principle. Nevertheless, it seems highly likely that the market and organizational principles are closely intertwined in interfirm relationships of Japan. This article focuses on how market principle and organizational principle worked and were intertwined in the interfirm relationships of Japan’s machine tool industry. The analysis of this article demonstrates that even within the same period, the two principles are intertwined, not in a uniform manner but in diverse ways, and the manner in which the two have been intertwined has exhibited some continuity yet also constantly changes. Consequently, it is difficult to find unique Japanese elements in the interfirm relationships, which points to the possibility that Japanese uniqueness has been overemphasized at the expense of recognizing commonalities between different countries