Competitiveness, localization and Japanese companies in China: realities and alternate approaches

Japanese multinational enterprises have traditionally been criticized for lagging behind Western companies in the localization of management practices, especially at managerial level. This has been ascribed to Japanese MNEs initiating offshore activities later than Western counterparts. Such reasoning cannot be applied to the case of China, where the ‘starting line’ was almost the same for all foreign firms. Drawing on case study evidence of Japanese firms in China, this study offers an alternate explanation for the lag in localization in respect of production methods and work style, and identifies a number of possible solutions for Japanese MNEs.