IDEAS home Printed from https://ideas.repec.org/p/osk/wpaper/2516.html

Governing under high uncertainty: the strategic role of sÅ gÅ shÅ sha in early GVC formation

Author

Listed:
  • Yoko Isozaki

    (Retail Consultant, LuxModa Consulting)

Abstract

This study explores the role of Japan’s sŠgŠshŠsha in global value chains (GVCs) led by multinational enterprises (MNEs), reconceptualizing them as strategic governance actors. Applying Transaction Cost Economics (TCE) and firm-GVC integrative framework, we conduct a comparative case analysis of DuPont and Fast Retailing, both of which entered China in the early-1990s, a period marked by deep political and policy uncertainty, through partnerships with Mitsubishi—a leading sŠgŠshŠsha. Our finding identifies an alternative governance structure during the early, highly uncertain stages of GVC formation: the temporary externalization of orchestration functions. We also extend the concept of credible commitment beyond its traditional application in a dyadic buyer-supplier context, showing its relevance in multi-actor contracts and even joint ventures.

Suggested Citation

  • Yoko Isozaki, 2025. "Governing under high uncertainty: the strategic role of sÅ gÅ shÅ sha in early GVC formation," Discussion Papers in Economics and Business 25-16, Osaka University, Graduate School of Economics.
    • Handle: RePEc:osk:wpaper:2516
    as

    Download full text from publisher

    File URL: https://www2.econ.osaka-u.ac.jp/econ_society/dp/2516.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Tang, Ryan W. & Buckley, Peter J., 2020. "Host country risk and foreign ownership strategy: Meta-analysis and theory on the moderating role of home country institutions," International Business Review, Elsevier, vol. 29(4).
    2. Henisz, Witold J. & Williamson, Oliver E., 1999. "Comparative Economic Organization—Within and Between Countries," Business and Politics, Cambridge University Press, vol. 1(3), pages 261-277, November.
    3. Alain Verbeke & Nathan S Greidanus, 2009. "The end of the opportunism vs trust debate: Bounded reliability as a new envelope concept in research on MNE governance," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 40(9), pages 1471-1495, December.
    4. Jones, Geoffrey, 2000. "Merchants to Multinationals: British Trading Companies in the 19th and 20th Centuries," OUP Catalogue, Oxford University Press, number 9780198294504.
    5. Peter J Buckley & Pervez N Ghauri, 2004. "Globalisation, economic geography and the strategy of multinational enterprises," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 35(3), pages 255-255, May.
    6. Gary Gereffi, 2014. "Global value chains in a post-Washington Consensus world," Review of International Political Economy, Taylor & Francis Journals, vol. 21(1), pages 9-37, February.
    7. Ram Mudambi, 2008. "Location, control and innovation in knowledge-intensive industries," Journal of Economic Geography, Oxford University Press, vol. 8(5), pages 699-725, September.
    8. Peter J Buckley & Pervez N Ghauri, 2004. "Globalisation, economic geography and the strategy of multinational enterprises," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 35(2), pages 81-98, March.
    9. Gereffi, Gary & Frederick, Stacey, 2010. "The global apparel value chain, trade and the crisis : challenges and opportunities for developing countries," Policy Research Working Paper Series 5281, The World Bank.
    10. Liena Kano, 2018. "Global value chain governance: A relational perspective," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 49(6), pages 684-705, August.
    11. Jean-François Hennart & Young-Ryeol Park, 1993. "Greenfield vs. Acquisition: The Strategy of Japanese Investors in the United States," Management Science, INFORMS, vol. 39(9), pages 1054-1070, September.
    12. Klaus E Meyer, 2001. "Institutions, Transaction Costs, and Entry Mode Choice in Eastern Europe," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 32(2), pages 357-367, June.
    13. Hongxin Zhao & Yadong Luo & Taewon Suh, 2004. "Transaction cost determinants and ownership-based entry mode choice: a meta-analytical review," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 35(6), pages 524-544, November.
    14. Teresa da Silva Lopes & Mark Casson & Geoffrey Jones, 2019. "Organizational innovation in the multinational enterprise: Internalization theory and business history," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 50(8), pages 1338-1358, October.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lars Matysiak & Alan M. Rugman & Andreas Bausch, 2018. "Dynamic Capabilities of Multinational Enterprises: The Dominant Logics Behind Sensing, Seizing, and Transforming Matter!," Management International Review, Springer, vol. 58(2), pages 225-250, April.
    2. Marcelo Bucheli & Luciano Ciravegna & Luis Felipe Sáenz, 2023. "The octopus that shrank: A historical analysis of how multinationals address policy and contractual uncertainty in a global value chain," Strategic Management Journal, Wiley Blackwell, vol. 44(13), pages 3289-3323, December.
    3. Shameen Prashantham & Julian Birkinshaw, 2020. "MNE–SME cooperation: An integrative framework," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 51(7), pages 1161-1175, September.
    4. Golesorkhi, Sougand & Mersland, Roy & Randøy, Trond & Shenkar, Oded, 2019. "The Performance Impact of Informal and Formal Institutional Differences in Cross-Border Alliances," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 28(1), pages 104-118.
    5. Gooris, Julien & Peeters, Carine, 2014. "Home–Host Country Distance in Offshore Governance Choices," Journal of International Management, Elsevier, vol. 20(1), pages 73-86.
    6. Julien Gooris & Carine Peeters, 2014. "Fragmenting global business processes: A protection for proprietary information," Working Papers 2014-12, CEPII research center.
    7. Peter J. Buckley & Nigel Driffield & Jae-Yeon Kim, 2022. "The Role of Outward FDI in Creating Korean Global Factories," Management International Review, Springer, vol. 62(1), pages 27-52, February.
    8. Ziliang Deng & Xufei Ma & Ziyan Zhu, 2022. "Transactional Dependence and Technological Upgrading in Global Value Chains," Journal of Management Studies, Wiley Blackwell, vol. 59(2), pages 390-416, March.
    9. Keith D. Brouthers & Liang Chen & Sali Li & Noman Shaheer, 2022. "Charting new courses to enter foreign markets: Conceptualization, theoretical framework, and research directions on non-traditional entry modes," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 53(9), pages 2088-2115, December.
    10. Gölgeci, Ismail & Assadinia, Shahin & Kuivalainen, Olli & Larimo, Jorma, 2019. "Emerging-market firms’ dynamic capabilities and international performance: The moderating role of institutional development and distance," International Business Review, Elsevier, vol. 28(6), pages 1-1.
    11. Peter J. Buckley & Roger Strange & Marcel P. Timmer & Gaaitzen J. de Vries, 2020. "Catching-up in the global factory: Analysis and policy implications," Journal of International Business Policy, Palgrave Macmillan, vol. 3(2), pages 79-106, June.
    12. Buckley, Peter J. & Enderwick, Peter & Hsieh, Linda & Shenkar, Oded, 2024. "International business theory and the criminal multinational enterprise," Journal of World Business, Elsevier, vol. 59(5).
    13. Liena Kano, 2018. "Global value chain governance: A relational perspective," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 49(6), pages 684-705, August.
    14. Francesco Debellis & Emanuela Rondi & Peter J. Buckley & Alfredo Massis, 2024. "Family firms and the governance of global value chains," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 55(8), pages 962-975, October.
    15. Ismail Gölgeci & Harun Emre Yildiz & Ulf Andersson, . "The rising tensions between efficiency and resilience in global value chains in the post-COVID-19 world," UNCTAD Transnational Corporations Journal, United Nations Conference on Trade and Development.
    16. Alan M. Rugman & Alain Verbeke & Quyen T. K. Nguyen, 2011. "Fifty Years of International Business Theory and Beyond," Management International Review, Springer, vol. 51(6), pages 755-786, December.
    17. Andrea Szalavetz, 2016. "Post‐crisis developments in global value chains - example of foreign investors’ Hungarian subsidiaries," IWE Working Papers 219, Institute for World Economics - Centre for Economic and Regional Studies.
    18. De Beule, Filip & Van Assche, Ari & Nevens, Joren, 2022. "Additive Manufacturing and Production Internationalization: An Internalization Perspective," Journal of International Management, Elsevier, vol. 28(4).
    19. Jiatao Li & Liang Chen & Jingtao Yi & Jiye Mao & Jianwen Liao, 2019. "Ecosystem-specific advantages in international digital commerce," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 50(9), pages 1448-1463, December.
    20. Cantner, Uwe & Günther, Jutta & Hassan, Sohaib Shahzad & Jindra, Björn, 2013. "Outward FDI from the Central and Eastern European Transition Economies – A Discrete Choice Analysis of Location Choice within the European Union," MPRA Paper 51817, University Library of Munich, Germany, revised 04 Jun 2013.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • N85 - Economic History - - Micro-Business History - - - Asia including Middle East
    • N95 - Economic History - - Regional and Urban History - - - Asia including Middle East

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:osk:wpaper:2516. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: The Economic Society of Osaka University (email available below). General contact details of provider: https://edirc.repec.org/data/feosujp.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.