12 - Conclusions

Summary

Summary

‘What accounts for the competitiveness of the Japanese manufacturing industry?’ has been an underlying question throughout this study, and is one which continues to receive much attention internationally. The contribution this book makes towards answering that question is through the examination of customer—supplier relationships in Britain and Japan. The present study, though limited in its scope and coverage, makes clear that buyer—supplier relationships have a strong effect on the industrial outcomes of prices, quantities and quality. And there seem to be good grounds for thinking that what has been called obligational contractual relation (OCR) can contribute to achieving superior performance. Prior to addressing the performance issue, the preceding chapters have also focused on (i) delineating types of buyer—supplier relations and identifying their empirical variations, and (ii) examining the factors — economic, institutional, moral and cultural — which affect the choice between different types of trading relations.

As a tool of analysis, a theoretical framework was developed to capture the range of possible buyer—supplier relations, the two extremes of which were called the Arm's-length Contractual Relation (ACR) and the Obligational Contractual Relation (OCR). The characterisation of the ACR—OCR spectrum were in terms of eleven empirically verifiable features. Thus, OCR, as compared to ACR, was characterised by a greater transactional dependence on trading partners, a longer projected length of trading, a greater willingness to accept or offer orders before prices were negotiated and fixed, less contractualism, a greater degree of uncosted sharing of technological know-how and risks associated with business fluctuations.