Product Architecture and Human Resource Management: Comparing Japanese, Chinese, and Korean Firms Based on a Questionnaire Survey

Using data from a questionnaire survey focusing on firms from Japan, China, and South Korea, this paper empirically examines the complementarity between product architecture and human resource (HR) management. The results of the analysis can be summarized as follows. First, in Japan and Korea, firms were more or less evenly divided between those employing a modular and those employing an integral architecture. On the other hand, in China, more firms employed a modular architecture. Second, with regard to HR management practices and customs, there were differences in the emphasis of internal training of new graduates and the emphasis of mid-career recruitment. Japan and China are at the two extremes, with firms in the former tending to emphasize the recruitment of new graduates and firms in the latter emphasizing mid-career recruitment, while firms from Korea were in-between, but closer to Japan. Third, we found that, in Japan, development performance was significantly higher when product architecture and HR management were appropriately combined. However, we did not find such significant effect for the case of Korea and China. And fourth, we found that when we drop the assumption that the relationship between the combination of product architecture and HR management on the one hand and development performance on the other is linear and examine the non-linear effect of the former on the latter, both in Japan and Korea, the more that firms approach the best combination, the more their development performance increases.