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Multiskilling, Delegation, and Continuous Process Improvement: A Comparative Analysis of U.S.-Japanese Work Organizations

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Author Info

  • Hodaka Morita

    (University of New South Wales and Cornell University)

Abstract

This paper focuses on the following U.S.-Japanese differences in work organizations and labor market practices: in Japanese firms, (i) real decision-making authority is delegated more to lower hierarchical levels, (ii) employees are multiple-skilled, (iii) human capital accumulation is more firm-specific, (iv) labor turnover rate is lower, and (v) continuous process improvement is more prevalent. I present a model that addresses interconnections among three key features of work organizations (multiskilling, delegation, and continuous process improvement), and analyses ways in which they are related to labor market practices. It analyses strategic interactions among firms concerning their choices of the nature of work organizations, and shows that strategic complementarity due to labor market externality can yield the multiplicity of equilibria, which provides a systematic explanation for the U.S.-Japanese differences.

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File URL: http://128.118.178.162/eps/lab/papers/0207/0207004.pdf
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Bibliographic Info

Paper provided by EconWPA in its series Labor and Demography with number 0207004.

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Length: 35 pages
Date of creation: 10 Aug 2002
Date of revision:
Handle: RePEc:wpa:wuwpla:0207004

Note: Type of Document - pdf; pages: 35; figures: none
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Web page: http://128.118.178.162

Related research

Keywords: Delegation; Multiskilling; Process Improvement; U.S.-Japanese Differences; Work Organization;

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References

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  1. Mincer, Jacob & Higuchi, Yoshio, 1988. "Wage structures and labor turnover in the United States and Japan," Journal of the Japanese and International Economies, Elsevier, vol. 2(2), pages 97-133, June.
  2. Carmichael, H.L. & Macleod, W.B., 1991. "Multiskilling, Technical Change And The Japanese Firm," Cahiers de recherche 9112, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
  3. Cooper, Russell & John, Andrew, 1988. "Coordinating Coordination Failures in Keynesian Models," The Quarterly Journal of Economics, MIT Press, vol. 103(3), pages 441-63, August.
  4. Acemoglu, D. & Pischki, J.S., 1996. "Why Do Firms Train? Theory and Evidence," Working papers 96-7, Massachusetts Institute of Technology (MIT), Department of Economics.
  5. Richard C. Levin & Alvin K. Klevorick & Richard R. Nelson & Sidney G. Winter, 1988. "Appropriating the Returns from Industrial R&D," Cowles Foundation Discussion Papers 862, Cowles Foundation for Research in Economics, Yale University.
  6. Aoki, Masahiko, 1986. "Horizontal vs. Vertical Information Structure of the Firm," American Economic Review, American Economic Association, vol. 76(5), pages 971-83, December.
  7. Itoh, Hideshi, 1991. "Incentives to Help in Multi-agent Situations," Econometrica, Econometric Society, vol. 59(3), pages 611-36, May.
  8. Itoh, Hideshi, 1994. "Job design, delegation and cooperation: A principal-agent analysis," European Economic Review, Elsevier, vol. 38(3-4), pages 691-700, April.
  9. Morita, Hodaka, 2001. "Choice of Technology and Labour Market Consequences: An Explanation of U.S.-Japanese Differences," Economic Journal, Royal Economic Society, vol. 111(468), pages 29-50, January.
  10. Richard C. Levin & Alvin K. Klevorick & Richard R. Nelson & Sidney G. Winter, 1987. "Appropriating the Returns from Industrial Research and Development," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 18(3), pages 783-832.
  11. Jovanovic, Boyan, 1979. "Job Matching and the Theory of Turnover," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages 972-90, October.
  12. Chun Chang & Wang, Yijiang, 1995. "A framework for understanding differences in labor turnover and human capital investment," Journal of Economic Behavior & Organization, Elsevier, vol. 28(1), pages 91-105, September.
  13. Greenwald, Bruce C, 1986. "Adverse Selection in the Labour Market," Review of Economic Studies, Wiley Blackwell, vol. 53(3), pages 325-47, July.
  14. Itoh, Hideshi, 1992. "Cooperation in Hierarchical Organizations: An Incentive Perspective," Journal of Law, Economics and Organization, Oxford University Press, vol. 8(2), pages 321-45, April.
  15. Mansfield, Edwin, 1988. "Industrial R&D in Japan and the United States: A Comparative Study," American Economic Review, American Economic Association, vol. 78(2), pages 223-28, May.
  16. Bulow, Jeremy I & Geanakoplos, John D & Klemperer, Paul D, 1985. "Multimarket Oligopoly: Strategic Substitutes and Complements," Journal of Political Economy, University of Chicago Press, vol. 93(3), pages 488-511, June.
  17. Milgrom, Paul & Roberts, John, 1990. "Rationalizability, Learning, and Equilibrium in Games with Strategic Complementarities," Econometrica, Econometric Society, vol. 58(6), pages 1255-77, November.
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Citations

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Cited by:
  1. Kambayashi, Ryo & Kato, Takao, 2011. "Long-term Employment and Job Security over the Last Twenty-Five Years: A Comparative Study of Japan and the U.S," IZA Discussion Papers 6183, Institute for the Study of Labor (IZA).
  2. Waldman, Michael, 2007. "Theory and evidence in internal labor markets," MPRA Paper 5113, University Library of Munich, Germany.
  3. Junichiro Ishida, 2006. "Dynamically Sabotage-Proof Tournaments," OSIPP Discussion Paper 06E001, Osaka School of International Public Policy, Osaka University.
  4. Uwe Jirjahn & Erik Poutsma, 2013. "The Use of Performance Appraisal Systems: Evidence from Dutch Establishment Data," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 52(4), pages 801-828, October.
  5. Krishnan, Murugappa (Murgie) & Srinivasan, Ashok, 2007. "How do shop-floor supervisors allocate their time?," International Journal of Production Economics, Elsevier, vol. 105(1), pages 97-115, January.
  6. John S. Heywood & Uwe Jirjahn, 2011. "Variable Pay, Industrial Relations and Foreign Ownership: Evidence from Germany," Research Papers in Economics 2011-05, University of Trier, Department of Economics.
  7. DeVaro, Jed & Farnham, Martin, 2010. "Two Perspectives on Multiskilling and Product Market Volatility," MPRA Paper 23089, University Library of Munich, Germany.

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