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Diversification of Japanese firms: how hybrid organizations evolved through corporate governance reform

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  • Mitsuharu Miyamoto

    (Senshu University)

Abstract

Confronted with the critical business situations in the late 1990s, Japanese firms initiated two kinds of corporate reform: corporate governance and human-resource management reform. In the beginning, it was assumed that Japanese firms would change from organization-based to market-based corporations by adopting the US-style shareholder-oriented corporate governance. However, the actual change is not such an overall transformation, but rather incremental and cumulative. As such, we focus on the managerial reform through the introduction of the corporate executive officer system, and examine the resulting changes in human-resource practices. In particular, we find a new type of organization, which introduces performance-related pay, while maintaining long-term employment, and also find another type of organization, which introduces performance-related pay and restricts or abandons long-term employment. Although both types have evolved from the traditional Japanese firms, it is not yet clear how such diversification is generated by the effects of corporate governance reform. Thus, this study investigates the evolutionary process of diversification in Japanese firms, using two data sets covering the ongoing changes in corporate governance and human-resource management.

Suggested Citation

  • Mitsuharu Miyamoto, 2016. "Diversification of Japanese firms: how hybrid organizations evolved through corporate governance reform," Evolutionary and Institutional Economics Review, Springer, vol. 13(1), pages 121-149, June.
    • Handle: RePEc:spr:eaiere:v:13:y:2016:i:1:d:10.1007_s40844-016-0030-9
    DOI: 10.1007/s40844-016-0030-9
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    References listed on IDEAS

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    1. ., 2001. "Corporate Governance in Islamic Banking," Chapters, in: Islamic Banking, chapter 7, Edward Elgar Publishing.
    2. Aoki, Masahiko, 2010. "Corporations in Evolving Diversity: Cognition, Governance, and Institutions," OUP Catalogue, Oxford University Press, number 9780199218530, Decembrie.
    3. Tirole, Jean, 2001. "Corporate Governance," Econometrica, Econometric Society, vol. 69(1), pages 1-35, January.
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    Cited by:

    1. Mitsuharu Miyamoto & Hiroatsu Nohara, 2023. "How Japanese firms address the issues of environment, society, and governance: a corporate governance perspective," Evolutionary and Institutional Economics Review, Springer, vol. 20(1), pages 25-46, April.

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    More about this item

    Keywords

    Corporate governance; Board reform; Diversification; Hybrid organization;
    All these keywords.

    JEL classification:

    • B52 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Historical; Institutional; Evolutionary; Modern Monetary Theory;
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure

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