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Supplier development at Honda, Nissan and Toyota: comparative case studies of organizational capability enhancement


  • Mari Sako


What factors facilitate and constrain the sustained development and replication of organizational capabilities of suppliers? This question is addressed in a comparison of historical case studies of Toyota, Nissan and Honda in Japan. First, as expected, replication difficulty is overcome by enabling companies to share the practice, rather than the representation, of tacit knowledge. Second, interdependence in the hierarchy of routines that constitute organizational capabilities has led companies to broaden the scope of supplier development over time. Third, this broadening challenges suppliers to accept customer companies' intervention in internal investment decisions, requiring a certain mode of corporate governance. It is argued that the boundary of a capability-based firm may go beyond legally distinct units of financial control when firms are subjected to a cumulative process of capability enhancement. Copyright 2004, Oxford University Press.

Suggested Citation

  • Mari Sako, 2004. "Supplier development at Honda, Nissan and Toyota: comparative case studies of organizational capability enhancement," Industrial and Corporate Change, Oxford University Press, vol. 13(2), pages 281-308, April.
  • Handle: RePEc:oup:indcch:v:13:y:2004:i:2:p:281-308

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    Cited by:

    1. Hong, Jacky Fok Loi & Snell, Robin Stanley & Easterby-Smith, Mark, 2009. "Knowledge flow and boundary crossing at the periphery of a MNC," International Business Review, Elsevier, vol. 18(6), pages 539-554, December.
    2. Sergio G. Lazzarini & Danny P. Claro & Luiz F. Mesquita, 2008. "Buyer-Supplier and Supplier-Supplier Alliances: Do They Reinforce or Undermine One Another?," Journal of Management Studies, Wiley Blackwell, vol. 45(3), pages 561-584, May.
    3. Frankel, Robert, 2006. "The role and relevance of refocused inventory: Supply chain management solutions," Business Horizons, Elsevier, vol. 49(4), pages 275-286.
    4. Lazzarini, Sergio G. & Mesquita, Luiz F. & Claro, Danny P., 2007. "Buyer-Supplier and Supplier-Supplier Alliances: Do They Reinforce or Undermine One Another?," Insper Working Papers wpe_84, Insper Working Paper, Insper Instituto de Ensino e Pesquisa.
    5. Wagner, Stephan M., 2011. "Supplier development and the relationship life-cycle," International Journal of Production Economics, Elsevier, vol. 129(2), pages 277-283, February.
    6. Wang, Weijia & Plante, Robert D. & Tang, Jen, 2013. "Minimum cost allocation of quality improvement targets under supplier process disruption," European Journal of Operational Research, Elsevier, vol. 228(2), pages 388-396.
    7. Proch, M. & Worthmann, K. & Schlüchtermann, J., 2017. "A negotiation-based algorithm to coordinate supplier development in decentralized supply chains," European Journal of Operational Research, Elsevier, vol. 256(2), pages 412-429.
    8. Sako, Mari, 2008. "Do industries matter?," Labour Economics, Elsevier, vol. 15(4), pages 673-686, August.
    9. Ron Sanchez & Joseph T. Mahoney, 2013. "Modularity and economic organization: concepts, theory, observations, and predictions," Chapters,in: Handbook of Economic Organization, chapter 20 Edward Elgar Publishing.
    10. Susan Helper & Mari Sako, 2010. "Management innovation in supply chain: appreciating Chandler in the twenty-first century," Industrial and Corporate Change, Oxford University Press, vol. 19(2), pages 399-429, April.
    11. Wilhelm, Miriam & Blome, Constantin & Wieck, Ellen & Xiao, Cheng Yong, 2016. "Implementing sustainability in multi-tier supply chains: Strategies and contingencies in managing sub-suppliers," International Journal of Production Economics, Elsevier, vol. 182(C), pages 196-212.
    12. Rivera-Santos, Miguel & Rufín, Carlos, 2010. "Global village vs. small town: Understanding networks at the Base of the Pyramid," International Business Review, Elsevier, vol. 19(2), pages 126-139, April.
    13. Duanmu, Jing-Lin & Fai, Felicia M., 2007. "A processual analysis of knowledge transfer: From foreign MNEs to Chinese suppliers," International Business Review, Elsevier, vol. 16(4), pages 449-473, August.
    14. Khan, Zaheer & Nicholson, John D., 2014. "An investigation of the cross-border supplier development process: Problems and implications in an emerging economy," International Business Review, Elsevier, vol. 23(6), pages 1212-1222.
    15. Gavronski, Iuri & Klassen, Robert D. & Vachon, Stephan & Nascimento, Luis Felipe Machado do, 2011. "A resource-based view of green supply management," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 47(6), pages 872-885.
    16. Thomas Johnsen, 2011. "Supply network delegation and intervention strategies during supplier involvement in new product development," Post-Print hal-00771835, HAL.
    17. Lutz Preuss & Jack Perschke, 2010. "Slipstreaming the Larger Boats: Social Responsibility in Medium-Sized Businesses," Journal of Business Ethics, Springer, vol. 92(4), pages 531-551, April.
    18. Wang, Yimin & Xiao, Yixuan & Yang, Nan, 2014. "Improving reliability of a shared supplier with competition and spillovers," European Journal of Operational Research, Elsevier, vol. 236(2), pages 499-510.
    19. Nicola Lacetera & Justin R. Sydnor, 2012. "Would You Buy a Honda Made in the U.S.? The Impact of Production Location on Manufacturing Quality," NBER Working Papers 18005, National Bureau of Economic Research, Inc.
    20. Arnaldo Camuffo & Miriam Wilhelm, 2016. "Complementarities and organizational (Mis)fit: a retrospective analysis of the Toyota recall crisis," Journal of Organization Design, Springer;Organizational Design Community, vol. 5(1), pages 1-13, December.
    21. Hong, Jacky F.L. & Snell, Robin Stanley, 2015. "Knowledge development through co-opetition: A case study of a Japanese foreign subsidiary and its local suppliers," Journal of World Business, Elsevier, vol. 50(4), pages 769-780.
    22. repec:kap:sbusec:v:50:y:2018:i:4:d:10.1007_s11187-017-9902-6 is not listed on IDEAS
    23. Montalbano, Pierluigi & Nenci, Silvia & Pietrobelli, Carlo, 2017. "Opening and linking up: Firms, global value chains and productivity in Latin America," MERIT Working Papers 030, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    24. Parida, Vinit & Patel, Pankaj C. & Wincent, Joakim & Kohtamäki, Marko, 2016. "Network partner diversity, network capability, and sales growth in small firms," Journal of Business Research, Elsevier, vol. 69(6), pages 2113-2117.

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