Report on SIEM session at IGU 2013 KRC on “Managerial Challenges: Local wisdom versus global practices” held at the KYOTO INTERNATIONAL CONFERENCE CENTER

Spaces of International Economy and Management (SIEM) has designed two sessions to contribute to the main conference theme, one at the commission of Local developments and one at the commission of Dynamics of Economic Spaces. We discussed with participants possible combinations of traditional and modern knowledge that help to reach the objectives of sustainable development at the local and global scale in urban space and the particular corporate workplace.

Professor Atsushi Taira (Kagawa University) chaired a session for the commission on Local Development entitled “Local development in Japan” on Monday, 5th August 2013. The session started with the discussion of international tourism policies negotiating cultural heritage in Japanese communities to a global audience. Under the pressure of global market mechanisms the Japanese manufacturing industry changes and affects the entire industrial complex. During the second session entitled Localizing Practices you will experience a management perspective on co-evolutionary institutional developments that still hold on local practices. Under these aspects, we discuss the challenges that family-owned businesses faces in advanced economies, the changing role of industry in emerging and advanced economies, the various inputs of legal education and professional reform in advanced economies, and most important the impact of FDI between developing and advanced economies.

Manabu Inoue (Heian Jogakuin University)

Development of public transportation policies in Kyoto, a city of international tourism

Kyoto City has thus far implemented several policies in effort to become a city where people can lead their daily lives using public transportation, riding bicycles and going about on foot. In this paper, the author identifies the spatial characteristics of the regions where a series of such policies has been put into operation and further discusses the future developments of this policy issue. Terrible traffic congestion develops in the city during tourist seasons of every spring and autumn. This occurs because tourist-season traffic adds strain on everyday traffic and creates extra demands on road capacity. While inflow of automobiles to Arashiyama Area located in the western part of the city is regulated, it is hardly the case for Higashiyama Area where many temples, such as Kiyomizudera, are situated. Meanwhile, there are public buses (Kyoto City buses) that are specialized in going around tourist spots including the world heritage sites. Running this kind of buses has prompted to create the ridership that selects certain buses according to their purposes, namely, sightseeing or other activities. In the center area of the city, the project to widen pedestrian walk space by further narrowing roadway width is scheduled to be completed in 2014. As stated above, Kyoto City is widening pedestrian walk space in the central area and encouraging people to use buses on regular route in the surrounding areas. In the meantime, there are numerous issues exist in Higashiyama Area, Kyoto’s most popular tourist district, and these issues need to be addressed.

Toru Yamada (University of Tsukuba)

How instrumental can it be?: Negotiating the legal and instrumental nature of World Heritage in Nagasaki, Japan

In this paper, I examine the process of how the legal aspect of UNESCO’s World Heritage Convention is translated in a local government’s development policy. In the last few decades, World Heritage has become a popular instrument of local-level tourism development around the world. In Japan, for example, several prefectural governments and municipalities, in efforts to obtain World Heritage status, have emphasized the global significance of their heritage properties, and hope to use World Heritage status as an instrument for local development. Such instrumental aspects of the World Heritage program often dominate media coverage and public discourse. However, when World Heritage nomination is adopted as part of an actual development policy of the local government, local officials and community members face the details of the instrumental aspects of World Heritage. The World Heritage Convention, an international treaty of heritage preservation, is a body of law. World Heritage can stand as an instrument for local economic development only after the locals can properly prepare reasonable preservation policies. Based on my ethnographic field research in Nagasaki’s Goto islands, I analyze how local officials and the residents in Goto interpret and react to zoning regulations and other legal matters of the World Heritage program, and how they administratively connect and epistemologically detach the legal aspect and the instrumental aspects of World Heritage.

Atsushi Taira (Kagawa University)

Local industrial complex and FDI: Issues and agenda through case studies in Japan

Local industries, called “”jiba sangyo”” in Japan, have been struggling to survive in globalization age. Those local industries have been played crucial roles in the local economies and related firms are often making geographical industrial complexes for various reasons. Currently, some local industrial complexes are making efforts to internationalize their operations: the glove-related industry and the towel-related industry in Shikoku, Japan, are good examples. On the other hand, since the 1980s, economic geographers began to pay attention to spatial agglomeration of industry in different fashion. To date, many studies have been conducted to explain their spatial processes and meanings: representative topics are embedded and shared implicit knowledge in local places and learning region as the center of innovation. At the same time, globalization of economy has also urged many economic geographers to examine its spatial patterns and its influences on firms’ performances; structures of multinational corporations, processes of multinationalization of firms, and strategic arrangement of firms have been main themes. In spite of the fact that agglomeration and globalization are closely related each other, they are likely to be argued separately. Thus it is possible to say that the study of the internationalization of local industrial complexes in Japan could be a good example to bridge those two arguments. So far, it is said that foreign direct investment leads to closure of plants in the home base area. However, there are examples in which FDI helps to grow the host firms though returning profits abroad to the headquarters.

CS08-1-3 Management Geography

During the first part of the session entitled localizing practices the audience experienced a management perspective on co-evolutionary institutional developments that still retain local practices. Under these topics, we discussed the challenges that family-owned businesses face in advanced economies, the changing role of industry in emerging and advanced economies, the various inputs of legal education and professional reform in advanced economies, and most important, the mutual impact of FDI among developing and advanced economies.
The second slot of the second session focused on globalizing practices. Answers where given to following questions: How do Chinese world and mega cities transform in a phase of accelerated globalization? Who are the actors promoting local developments such as new spatial division of labor in R&D and spatial restructuring of MNEs? Do those boundary spanners need cultural competences to make firms successful?
Finally, managerial challenges have been discussed that explore the multi-scalar mechanisms of crisis adaptability in certain industries and their related, globally spread production strategy. Practices including traditional or local wisdom for managerial decision making towards sustainable developments such as Ecotourism versus those reflecting global beliefs, mechanisms and agreements of multinational entities promoting diversity management have been discussed to highlight the contradictions of the 21st century. In contrast to the old saying, there are no problems but only solutions, the trilogy of wisdom, beliefs and proactive globally common responsibility may help to promote a more sophisticated sense of challenge and risk assessment towards sustainable developments from an Eastern or Yin-Yang perspective.

On Tuesday, 6th August 2013 Andrew Jones (City University London) chaired the first Management Geography session that carried the subtitle Localizing practices. Following speakers did present their work:

Neil Reid (University of Toledo)

Challenges facing family-owned businesses in the twenty-first century

The family is the original economic unit from which all other forms of economic organization sprang and today the family-controlled corporation is the world’s most common corporate form. The purpose of this presentation is to identify and discuss some of the major challenges that face family-owned businesses in the twenty-first century. These challenges include that of conflicting roles. For example, owners of family firms often have multiple responsibilities that include their duties as owners of the firm, their responsibilities as managers, and their obligations to each other as family members. Since 2004, the author has worked very closely with a number of family businesses within the greenhouse industry in northwest Ohio. This work has focused on identifying ways in which these family businesses can overcome significant competitive challenges (e.g. international competition, stagnant markets etc.) that threaten their economic survival. The author will draw upon the challenges facing the northwest Ohio greenhouse industry to illustrate some of the major challenges facing family businesses in the twenty-first century.

Tim Reiffenstein (Mount Allison University)

Varieties of legal education and professional reform in the United States, Canada and Japan: A management perspective on co-evolutionary institutional change

This paper offers a comparative analysis of recent upheavals in both legal education and professionalization in the United States, Canada and Japan. It adopts a varieties of capitalism perspective to shed light on the endogenous and exogenous drivers of institutional change in the three national case studies. Through a meta-review of the literature and drawing upon interviews with key informants, it reveals three distinct layers of institutional governance that are to varying degrees coevolving with national variants elsewhere. Legal systems are fundamentally regulated at the national scale through judicial policy. At the same time, the precise determination of how law is practiced and how lawyers receive professional training is shaped profoundly by national professional legal establishments (bar associations, law societies, academic societies, etc.).
Meanwhile, at the scale of everyday practice, the law firms where most lawyers work are increasingly operating internationally. This paper examines some of the management challenges taking place within each jurisdiction as the various institutional layers grapple with change, particularly as it effects the crucial transition from law school to professional practice in an era of economic uncertainty.

Patrik Strom & Richard Nakamura (University of Gothenburg)

Firm level Chinese FDI in Japan: spatial dynamics and regional economic development

The increasing integration of the Japanese and Chinese economy has become an important part of the regional economic development in East Asia. China is today the most important trading partner for Japan and the Japanese investments in China, by expanding regional production networks, have been vital for developing the industrial base in both countries. The Japanese FDIs in China are well documented in the literature. The increasing FDI from China to Japan, however, is little known and discussed in the literature. In this paper we engage with the origins of the firm level Chinese FDI into Japan.
We study the development of mergers and acquisitions (M&A) of Chinese and Japanese firms. The aim of the paper is to give an account of the development and analyze the preliminary results of these investments. Grounded in this study we will also examine the spatial dynamics and regional economic impacts of these FDI in Japan. Empirical examination of the M&As shows a tremendous increase in the amount of cases during the last two years. Chinese investors are seeking strategic assets and new markets.
Investments are conducted in industries where the Chinese government has put special priority. Investments are made in firms where the financial base is fragile, succession or future ownership is unclear or in firms with earlier relationships with Chinese partners.
Management of these companies are continued to be run by Japanese, but the Chinese investors seem to take an active role in the board. This could be interpreted as a form of hybrid-management, where the aim is to develop the firms in Japan, but also utilize the acquired strategic assets for the Chinese market, through brand name, quality and distribution channels.
Little is known about the regional economic impact of these investments. Investments in regional or peripheral areas can help to strengthen core-cities and would possibly receive support from local governments in a way to strengthen the local economic base. By adding this spatial dimension, the paper strives to generate a contribution to the literature in management geography.

Hachiro Hagiwara (Shikoku University)

Japanese Enterprises in Brazil

Japanese people started to immigrate into Brazil in 1908, and Japanese immigrants have been playing an important role in Brazilian society, especially in the agricultural field.
Investment from Japan to Brazil had its first boom in the mid 1950’s, when important national projects emerged in the field of energy and steel, etc. The second boom occurred in the period called the “Brazilian miracle,” from 1968 to 73, when many Japanese enterprises rushed to Brazil. But, the 1980’s was a “lost decade” for Brazil, and the 1990’s was a “lost decade” for Japan, after the collapse of the Bubble Economy. Investment from Japan was minimal during these periods. Since 1994, when the Real Plan started to stabilize the Brazilian economy, investment by Japanese enterprises has been returning to Brazil, which has created a third boom. When compared with occidental enterprises, Japanese firms operating in Brazil are said to lack an obvious aim and investment strategy, to lack speed in making decisions, and to be too closely tied with their Japanese headquarters, not localizing sufficiently by hiring local staff as managers, etc. And today, Chinese and Korean enterprises are developing faster than Japanese ones in Brazil. However, Japanese enterprises have strong points and have been accumulating know-how for local management through their long experience in Brazil.

Richard Ek (Lund University)

Local Brewing: Micro-Breweries, Place-Making and Magic

‘Food and drink are societally embedded and central elements in tourism, and as such increasingly important as the competition between cities and other tourist destination increases. Wine tourism has for some time now been a genre of its own. Although more seldom, beer brands and breweries are becoming increasingly relevant. For instance, micro-breweries are more and more regarded as valuable place bound assets in tourism development as craft beer culture is usually considered authentic and a community-building practice in opposition to mass-produced beer. Further, seemingly, the craft of micro-brewering is narrated and depicted as an engagement with place-bound natural objects, particularly hops, with almost mystical capacities: the magic of place-brewering. It thus becomes interesting to a bit more systematically unfold how micro-breweries present themselves as place-bound and place-making actors in a marketing and branding perspective. Place is an admittedly elusive and complex concept as it includes so much more than the habitual notion of place as a local area of physical extension. A content analysis of marketing material is an appropriate way to approach this topic. In more detail, this paper combines a narrative-discursive methodology, the theoretical vocabulary of social constructivist research on place and insights from object oriented ontology of sceptical realism in order to unravel the place-based magic of micro-breweries in a place-marketing context.

The second slot entitled Globalizing practices was chaired jointly by Rolf Dieter Schlunze (Ritsumeikan University) and Patrik Strom (Univ. of Gothenburg). Here the speakers presented following research results.

Andrew Jones (City University London)

Translation, Mediation or something more?

The role of Chinese world cities in global managerial practices A developing body of work in economic geography, management studies and other social science disciplines has begun to focus on the intersection between sociological accounts of globalized managerial practices and the nature and significance of world cities in the global informational economy. Whilst the former literature has established that an analytical focus on the practices of managers and other key employees in transnational firms is a fruitful way of better understanding the development of transnational economic activity, this engagement has thus far has limited engagement with the wider world city network literature. This paper argues that not only do these approaches need to be much better integrated in economic geographical accounts of the global economy, but that existing theories of economic practice and urban system development can be significantly advanced by bringing insights to bear from the relatively discreet literatures. It contends in particular that world cities act as complex sites of innovative and dynamic practice production that exceeds current accounts of their role as sites of simpler concepts of translation or mediation. Whilst the latter concepts have great utility, the paper explores how global economic practices are produced through multiple and complex place-based interactions. It uses empirical research into investment practices by foreign managers in three key Chinese cities (Beijing, Hong Kong and Shanghai) to elaborate these arguments.

Natsuki Kamakura (University of Tokyo)

New spatial division of labor in Research and Development: Case study of a Japanese chemical company

Multinational companies (MNCs) have increasingly been trying to make use of knowledge dispersed all over the world. Several researchers, including geographers, have conducted studies on this globalization of research and development (R&D), but apparently, most of them have ignored the interaction between foreign and domestic R&D. It is reasonable to approach these two aspects independently provided there is no significant relation between them. However, Japanese MNCs typically accumulate most of their primary technological resources and R&D personnel in Japan. To understand the method by which these companies establish a link between their core competences and the knowledge acquired in a foreign environment, it is important to discern the processes of both evolution and globalization of their domestic R&D functions. To study this issue, I conducted research on several Japanese chemical companies that have global operations. Using data on locational hysteresis, organizational structure, and patent applications, I analyzed (1) the evolution of their main R&D functions in Japan, and (2) the changes in spatial divisions of labor between their domestic and overseas R&D. The results indicate that certain companies are not only trying to build a new global R&D system, but are also attempting to fuse their own accumulated technology with the new system. In this presentation, I will explain the case of Toray, which is one of the largest chemical and fiber companies in Japan, and explore how knowledge flows within the company, making it the leading R&D company in Japan.

JI Weiwei (Jinan University)

Exploring Boundary Spanners’ Cross-cultural Competences: An Asian-perspective on the Global City

The aim of this research is to deal with the understanding of cross-cultural competence through international boundary activities in Asian global cities. The development of a theoretical framework for defining and measuring cross-cultural competence from four environment perspectives: firms, market, living and psychology. This research has taken a step forward into analysis of the relationship between cross-cultural competence creation and managers’ behaviors and action in Japan and China. Boundary spanners need to seek constantly to integrate with global business communities, while at the same time remaining committed to promoting their local businesses. The research results imply that foreign managers who are eager to succeed in the intercultural workplace by creating cultural synergy need to undertake the effort to achieve cross-cultural competence. Cross-cultural competence appears to be scarce but very much needed at the level of MNCs’ headquarters if they need a global HRM strategy enabling their management to learn about appropriate behavior and practices to advance their overseas assignments.

Alexandre Schon (University Montpellier III)

Restructuration and resilience of a multinational firm at local-scale: the case of IBM Montpellier, France.

IBM Corporation is one of the oldest and prestigious multinational company in the world. Result of a merger 102 years ago, IBM has developed an internationalization degree among the highest in the world and accounts for nearly 106 billion dollars in revenue (2011). The arrival of the computer factory in Montpellier (June 28, 1965) allowed the city to gradually emerge from its industrial crisis, and revitalize its productive system. Thus, the city integrated an more largest innovative operational management with others IBM sites at European-scale. For a long time centralized on the IBM site, the local productive system of Montpellier has become increasingly diversified in the ICT sector between the 1970s and the 1990s. In 1993, the increased competition in the computer industry force IBM to restructure its payroll and historical activities, nowadays the corporation develops new business services (data services as programs “e-business on demand”, “Smarter Planet”). At local-scale, the unfavorable macro-economic context had greatly affected the Montpellier IBM site: redundancies, sectorization of its activities, spatial recomposition of its own activity park, new strategic specializations. Today, IBM isn’t a computer factory but a computer service center that offers outsourcing, benchmarking and research-innovation (Health, Water and Energy) on two different sites in Montpellier. Between spatial disengagement and new cloud computing activities established on the site, this communication will propose a reading of the phenomena of glocalization and resilience with an micro-local focus on the evolution of IBM Montpellier through the multiples recompositions of his plots, his management and his employees.

The final slot was entitled Managerial challenges and chaired by Neil Reid (Univ. of Toledo) presenting research of following speakers.

Martina Fromhold-Eisebith (RWTH Aachen University)

Sectoral resilience: Exploring sector specific, multi-scalar mechanisms of crisis adaptability in the automotive industry

The notion of ‘regional resilience’ has recently gained wide attention in conceptual debates of Economic Geography. This rests on the assumption that the ability of regions to flexibly react to sudden economic crises is rooted in region specific constellations of actors and arenas of activity. Yet, this presumption overlooks that factors of resilience may not predominantly lie within regional boundaries or be an attribute of regions as ‘acting’ entities, but that resilience is rather the outcome of the strategic behavior of companies in crisis-affected industries that locate in different places. Companies usually actively aim at achieving flexibility and adaptability in the face of highly dynamic economic environments by using assets in different places and options provided at various spatial scales. Hence, the actual source from which capabilities to adapt to changing conditions of competitiveness emerge may rather be the actors forming an industrial sector than the region itself. From this point of view, the region is conceived only as the arena where institutionally determined efforts of resilient behavior happen to take place and be put into effect. The actual focus of attention, however, should shift to mechanisms of ‘sectoral resilience’ constituted at the level of industries and their value chains, respectively. The proposed conference presentation tries to establish this different view on sources and forces of resilience by drafting the conceptual framework of ‘sectoral resilience’. Major multi-scalar mechanisms of adaptability will then be illustrated using the example of the automotive industry.

Tomasz Rachwal & Miroslaw Wojtowicz (Pedagogical University of Cracow)

Changing Role of Industry in the Development of Cities in Emerging Economies – the Case of Krakow Metropolitan Region (Poland)

The subject of the paper is the issue of the changing role of industry as one of the key elements of development and metropolisation of cities in post-socialist, emerging economies. Particular attention is paid to the diminishing role of the industry in terms of activation of labor resources, which is connected to the automation of manufacturing processes and relocations of labor-intensive activities to regions with lower production costs. However, the industry, particularly high-tech manufacturing, plays a significant role in stimulating research and development sector and generate innovations, as a key component of the knowledge-based economy. From this perspective, the diagnosis of the transformation of industrial enterprises, especially those aspects of their functioning that are associated with the creation of innovations, appears to be an important research problem. Effects of innovation processes in industrial enterprises are visible both in the results of the whole urban economy, affecting such the size of the inflow of foreign direct investment, competitiveness of the city, the state of public finances and private companies, but also to functioning of municipal authorities, educational and research and development activities and higher quality of life. It can therefore be assumed that these innovative industrial companies are one of the most important elements of the structure of metropolitan cities. The analysis of this process is made on the example of Krakow Metropolitan Region industry, based on data on employment and the operation of selected industrial companies, with particular emphasis on their innovative activity.

Linda M Magi (University of Zululand)

Ecotourism and Conservation Strategies Around Protected Areas of Kwazulu-Natal: Tradition for the Future

The new democratic changes in South African have introduced enormous transformation to the tourism and conservation landscape. Recent policies have been formulated with the intention of empowering local communities by improving opportunities for job creation, employment and poverty alleviation (DEAT, 2006). Research findings (Binns & Nel, 2002; Rogerson & Visser, 2004; Magi, 2009) have however suggested that local communities perceive tourism management and delivery continues to be in disarray. The main challenge for tourism authorities is to establish policies that promote better service delivery systems. The notion that conservation and tourism are universal remedies for unemployment and poverty, need to be re-assessed (Wahab, 2000; Wahab & Pigram, 2000). A viewpoint exists that authorities need to engineer a new paradigm that supports tourism and conservation management in rural areas (Mkhize, 2012). This paradigm is anticipated to heighten resource service delivery, since these activities continue to represent an important economic sector for development (Sharpley, 2002). In this regard, authorities ought to work towards creating a sustainable environment in protected areas of KwaZulu-Natal (Spenceley & Goodwin, 2007). This paper, therefore, explores the standpoint of local authorities towards transforming conservation tourism and enhancing service delivery around protected areas, and how the evolving infrastructural could benefit communities in these areas. The over-publicised government strategy of ‘batho pele’ (people first), ubuntu philosophy and African conservation approach, could usher-in a ‘better delivery of services to all.’ These approaches represent a new trajectory towards achieving sustainable recreation and tourism development in areas next to protected areas.

Rolf Dieter Schlunze (Ritsumeikan University)

Diversity advantage in Germany? Locational preferences of Japanese managers in Germany

This research introduces the landscape and mindscape of Japanese managers in Germany. Japanese management is in a transformation: overseas assignments in one location become increasingly shorter making it difficult to reach the demands of the particular spot by adequate degree of intercultural competence. As an effect there are increasingly less managers with country-specific knowledge and language competence. Not country experts but the so called global managers should be intentionally nurtured by Japanese headquarters. A census has been conducted among Japanese managing directors of all overseas subsidiaries listed by Toyo Keizai 2010. One third of them replied to the questionnaire. Ten percent of those managers have been identified as intercultural competent boundary spanners. Referring to Thomas (1967, 1994) who introduced an open-system theory investigating the role of the expatriates with boundary spanning activities in multinational corporations, a contextual management appraisal has been designed that investigates the preferences and networking of intercultural competent boundary spanners in the corporate, market and living environment. The results showed clearly that embedding the business in local networks is an important boundary spanning activity. The implications for staffing with Japanese expatriates will be given in contrast to locational settings that vary from the enclave Düsseldorf to the intercultural city Berlin.

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