Abstract
Japanese direct manufacturing investment (DMI) in the United States has increased dramatically since the early 1970s. Yet, prior research studies on Japanese DMI in the United States have been sparse.This study has two major objectives: to investigate the investment decision-making process and the control system of Japanese parent companies which have established manufacturing plants in the United States, and to examine government-business interactions or inactions in relation to such DMI. The first objective is concerned primarily with behavioral and organizational aspects of Japanese firms; the second involves an analysis of complex relationships among macro- and micro-level actors.Primary data were collected through personal interviews conducted in the summer of 1984 in Japan by the present author with executives and managers of fifteen Japanese parent companies and officials from the Ministry of International Trade and Industry (MITI) and the Federation of Economic Organizations (Keidanren).The study explores such questions as the source of the investment proposal, rationales for DMI, the feasibility study, entry strategy and decision-making, organization structure, parent-subsidiary linkages, locus of policy formulation, communication methods, performance evaluation practices and changes in government-business relations, including MITI's policy direction and its linkage with industries as well as Keidanren's activities and an increased role of private initiatives.Some of the important findings of the study are as follows: (1) The investment decision-making process was highly concentrated at the top management level and did not involve any prior consultations with government officials or even with the related firms of the investing company. (2) The decision-making process and the system of management control varied according to the objective of the investment, the structure of domestic and international activities of the investing firm, the personality of the top management, and other company-specific and product specific factors. (3) There has been a development of a new pattern of government-business relations and industrial organization, characterized as a shift from monolithic to pluralistic structure and interactions among macro- and micro-level actors.The study also identified politically-oriented and enterprise-oriented currents which together triggered the rapid increase of Japanese DMI in the United States in recent years--portending as a turning point in U.S.-Japan bilateral relations. (Abstract shortened with permission of author.)