Technological development in automotive industry and transformation in corporate governance system

Abstract

This study aims to understand how governance change is triggered by cybernetics issues, such as the development of automotive navigation systems in German, Japanese and US automotive industry. Six points are discussed for the central question which are 1) GDP Trends for Manufacturing Activities, 2) Organizational Structure for Supply Chain Management (SCM), 3) Viewpoint related to Internet of Things (IoT) usability, 4) National IoT planning, 5) Definition of IoT, 6) Developing Navigation Systems. At first, the trend in manufacturing activity reveals two different trends: a downward trend in Japan and the USA, and a stable trend in Germany. We see several possible reasons for this difference; first, the “smiling curve concept” is applied to visualize the difference. And the organizational structure of SCM is concerned such as “Keiretsu” in Japan, “Konzern” in Germany and the “Anglo-American” model. Then, this paper addresses how the unique organizational features of SCM might react to the technological developments in the automotive industry such as autonomous driving, which has shaken the core of the industry. For this gradual change, the IoT technology is necessary. IoT means the progress of certain embedded system, which adds a network function into it. The embedded system for automobile orientation on a map (hardware and software) has to be upgraded with the network function. These technological developments could influence their corporate governance system. Then, the discussion matrix is formed for the six points, which are discussed in this paper and reveal the boundaries between Japan, Germany and the US. According to Beer, the societary maps (the cybernetic maps) are required for this structural progress to find the right way to go. Finally, we think a dynamic industrial movement is ensured by keeping fair competition, which ensures diversity as well as technological development. It could be the last resort to protect our “Designing Freedom”.