Bunshaka: the autopoietic growth strategy of Japanese enterprises

Abstract

Two predominating growth and development strategies are found in Japanese and Western companies. In Japan, companies tend to separate departments from the parent enterprise and attribute to the subsidiary an independent legal status. After separation both companies can grow independently, although strong links may be maintained. This process is known as bunshaka in Japan. Western companies predominantly grow through the acquisition of firms that are integrated into the new formed bigger enterprise. We show that different types of processes are closely linked to Japanese and Western innovation strategies. While Japanese companies tend to focus their innovation potential on incremental improvements at the level of the internal relations within the firm, Western companies tend to prefer radical product design. In this paper we present and discuss the bunshaka principle and its consequences on the basis of a detailed example. Moreover, we argue that company growth and-development according to the bunshaka principle can be regarded as autopoietic processes. This view will be juxtaposed by growth and development forms that can be found predominately in Western companies and which can be characterised as allopoietic. Alongside to this argumentation, parallels between biological and economic growth and development processes are discussed.