The Myth of the Cooperative Single Source

Abstract

This article examines the nature of Japanese subcontracting practices and compares them in detail with equivalent behavior in the West. The contrast is made between the multi‐sourced, adversarial relationships typical in Western subcontracting relationships and the cooperative single‐sourced approach favored by Japanese industry.Particular attention is paid to the supposedly common Japanese practice of awarding long‐term contracts to single sources. It is argued that although this practice is indeed prevalent in the Japanese auto industry, the nature of the relationship between buyer and supplier is frequently less than cooperative. The argument is advanced that this interpretation of trading relationships stems from a misinterpretation of events in two radically different cultures. It is suggested that many apparently cooperative, egalitarian relationships in Japan are actually deals made between unequals, with the buyers wielding huge amounts of power over their single sources.The article concludes with a warning about the dangers of making direct international transfers of poorly understood business practices.