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Cooperation and Competition in the Automotive Industry - Comparing German and Japanese Supplier Management

03.07.2006 | 18:30

Miriam Wilhelm, Institute of Management, Free University Berlin and ISS, Tokyo University

Abriss

"Co-opetition", meaning the parallel existence of two conflicting mechanisms - namely competition and cooperation - is a much discussed phenomenon in the literature on inter-organizational cooperation. This problem is of particular relevance in the automotive industry because the rising pressure of improving quality and reducing prices has led to the development of cooperative ties, which exceed pure market interactions. Here, research on strategic networks - i.e. networks governed by a nodal firm (the focal actor) could be most fruitful. The central role is taken over by the manufacturer who - through business relations - has direct ties to every other (supplier) firm in the network. Because of similar capabilities or market commonalities these supplier firms often act as direct competitors.
In this industry, it seems, that competition is not only tolerated but also desired as it is often purposefully enhanced by additional efforts. Such efforts include dual and multiple sourcing strategies (the same part, component or modular is sourced from more than one supplier). Thus, the risk of getting dependent on just one supplier who could abuse this situation by scaling up prices in minimized. Despite these competition-inducing mechanisms manufacturers are - at the same time - aiming at establishing cooperative relationships among their suppliers. Here Japanese manufacturer-supplier networks act as a role model by institutionalizing so called supplier associations (kyoryokukai) that - through strong multilateral ties - facilitate knowledge-sharing processes on the one hand and simultaneously try to maintain competitive elements, on the other. It seems that manufacturers are sharing the opinion that both mechanisms - namely, cooperation to enable knowledge transfer as well as competition to generate innovation and cost transparency - are of high importance.
My research focuses on the question if Japanese firms are really more successful in managing the paradox of coopetition. For this purpose, I have been conducting interviews with several Japanese and German supplier firms as well as OEMS.

Short CV:
Miriam Wilhelm is a Doctoral Student at the Institute of Management, Free University Berlin. She is currently being hosted by the Institute of Social Science, Tokyo University.

Koordination: Andreas Moerke; Volker Elis

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