IDEAS home Printed from
   My bibliography  Save this paper

"The Strategic Effects of Firm Sizes and Dynamic Capabilities on Overseas Operations: A Case-based Comparison of Toyota and Mitsubishi in Thailand and Australia" (in Japanese)


  • Takahiro Fujimoto

    (Faculty of Economics, University of Tokyo)

  • Shinya Orihashi

    (Graduate School of Economics, University of Tokyo)


In international business, much attention has been directed to the international expansion of firms based on their use of resources and competitive capabilities that have been built up in a home country to create a competitive advantage over host-country firms. More recently, the organizational capabilities and competitive advantages of Japanese manufacturing firms in general (in autos, electronics, etc.) have been analyzed as important factors in the establishment of overseas transplants. The theoretical framework of the overseas application of home-country management resources has been effective as a basic tool in analyzing the fundamental issue of international operations of the firm. However, the existing models, which tend to emphasize application of country-specific resources, does not sufficiently explain the frequently encountered question of why multinational enterprises (following, MNEs) from the same home country pursue different strategic paths and actions when managing overseas operations. The present paper attempts to incorporate a dynamic and firm-specific perspective and empirically analyze how differences in the financial resources and organizational capabilities of MNEs from the same home country affect the strategy and competitive behavior of their operations in the same local country. The analysis will center on the two Japanese auto assemblers, specifically Toyota Motor Corporation and Mitsubishi Motors Corporation, which have local production facilities in both Australia and Thailand. These two countries provide interesting case studies because in both the local operations experienced a serious crisis in recent years. The crisis for local auto producers in Australia began in the 1980s with the removal of protectionist policies and the rapid liberalization of the auto market. In Thailand, exceedingly severe conditions for local auto assemblers were caused by the 1997 Asian economic crisis. The present paper will focus its attention on the differences in the responses by Toyota and Mitsubishi to these crises, which we characterize as "larger competent firm" and "smaller competent firm" respectively. The two firms in question have both maintained international competitiveness in production in their common home country of Japan, in addition to building top-level local competitiveness in their Australian and Thai operations. However, when faced with a growth opportunity and a subsequent crisis, the responses of the local operations of the firms were markedly different. It is anticipated that behind these differences in firm conduct lie interfirm differences in firm scale (i.e. financial power) and dynamic organizational capabilities (e.g., capability-building capability) in their home country. The present paper will attempt to delineate these interfirm differences and their effects on firm conduct to explain why two firms from the same home country would show such different patterns of conduct even though they face the same local opportunities and crises.

Suggested Citation

  • Takahiro Fujimoto & Shinya Orihashi, 2002. ""The Strategic Effects of Firm Sizes and Dynamic Capabilities on Overseas Operations: A Case-based Comparison of Toyota and Mitsubishi in Thailand and Australia" (in Japanese)," CIRJE J-Series CIRJE-J-66, CIRJE, Faculty of Economics, University of Tokyo.
  • Handle: RePEc:tky:jseres:2002cj66

    Download full text from publisher

    File URL:
    Download Restriction: no

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:


    This item is featured on the following reading lists or Wikipedia pages:
    1. Studies on the automobile industry


    Access and download statistics


    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:tky:jseres:2002cj66. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (CIRJE administrative office). General contact details of provider: .

    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.

    We have no references for this item. You can help adding them by using 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.