Coffey, Dan; Tomlinson, Philip R. --- "Coordination and Hierarchy in the Japanese Firm: The Strategic Decision-making Approach vs. Aoki" [2003] ELECD 80; in Waterson, Michael (ed), "Competition, Monopoly and Corporate Governance" (Edward Elgar Publishing, 2003)

Book Title: Competition, Monopoly and Corporate Governance

Editor(s): Waterson, Michael

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781843760894

Section: Chapter 1

Section Title: Coordination and Hierarchy in the Japanese Firm: The Strategic Decision-making Approach vs. Aoki

Author(s): Coffey, Dan; Tomlinson, Philip R.

Number of pages: 17

Extract:

1. Coordination and hierarchy in the
Japanese firm: the strategic decision-
making approach vs. Aoki
Dan Coffey and Philip R. Tomlinson

1. INTRODUCTION

Throughout his academic career, Keith Cowling has been concerned with
the increasing concentration of economic power and, in particular, its
implications for the wider public interest. This is perhaps best illustrated in
his 1982 book, Monopoly Capitalism, in which he extends Baran and
Sweezy's (1966) seminal contribution to argue that the increasing monopol-
isation of capitalist economies is likely to lead to greater economic insta-
bility and stagnation.1 This framework was developed subsequently to
encompass the activities of the transnational corporation, in close collab-
oration with Roger Sugden (see Cowling and Sugden, 1987), an undertak-
ing which sparked a critical reappraisal of the orthodox (Coasian) theory
of the firm. In this and subsequent work Keith Cowling has emphasised the
problem posed by the hierarchical nature of the modern corporation,
where strategic decisions are taken in the boardrooms of large firms by cor-
porate elites, able and willing to override the objections of other affected
parties. Strategic decisions in this sense are those that affect the broad direc-
tion of the firm and hence the determination of a series of economic vari-
ables, such as the level and intended location of investment, employment,
and output. When corporate elites take strategic decisions that conflict with
the broader interests of a society, the social `optimum' is necessarily
breached. With no available market mechanism to redress the balance, the
...