Efficiency vs. effectiveness orientation of global sourcing strategy: A comparison of U.S. and Japanese multinational companies

Executive Overview During most of this decade, Japan has been mired in its longest post-war recession. Some pundits predict that this will be the end of the Japanese corporate juggernaut. Indeed, our interest in Japan and Japanese competition has waned concomitantly in recent years. So has our learning from the Japanese. This is dangerously short-sighted. The pendulum of international trade has shifted from cross-Atlantic to cross-Pacific in recent years, as U.S. and Japanese multinational companies engaged in global sourcing strategy across the Pacific. Indeed, while struggling in the post-bubble economy, many Japanese companies have accelerated their move toward their Pacific Rim global sourcing paradigm. Based on Japan's regional ties with the rest of Asia, Australia, and increasingly other parts of the Pacific Rim, this paradigm builds on Japan's famed target costing, target exchange rate, new product development style, and keiretsu (interfirm alliances). While Japanese companies have slowed the pace ...