Technology policy in Japanese firms: Decision-making, supplier links, and technical goals

The focus of competition among Japanese firms has shifted to the creation and mastery of advanced technology. To harness technology, an integrated system involving the firm and its key suppliers has been created. Like the widely analyzed kanban system, the system for managing technology has been adopted by a majority of leading companies. It enables Japanese firms to systematically identify and evaluate R&D opportunities, to augment internal efforts by assimilation of external progress, and to balance short- and long-term needs. Japanese firms have gained many research efficiencies by honing this decision-support structure. The hallmarks of this decision-support system are described, including the role of the Board of Directors, joint R&D with suppliers, the setting of research priorities, and the origins of manufacturing technologies. This structure is illustrated by examining the practices of the Toyota Motor Company, one of Japan's leading high-tech companies.