Title: Global coevolution as a source of a high-profits resilient structure: a lesson from Shin-Etsu Chemical

Authors: Tomoko Saiki, Toru Takahashi, Jae-Ho Shin, Chihiro Watanabe, Yuji Tou, Noritomo Ouchi

Addresses: Department of Technology Management, Tokyo Institute of Technology, 3-3-6-907S Shibaura, Minato-ku, Tokyo 180-0023, Japan. ' Department of Technology Management, Tokyo Institute of Technology, 3-3-6-907S Shibaura, Minato-ku, Tokyo 180-0023, Japan. ' Department of Industrial Engineering and Management, Tokyo Institute of Technology, 2-12-1 W9-49 Ookayama, Meguro-ku, Tokyo 152-8522, Japan. ' Department of Industrial Engineering and Management, Tokyo Institute of Technology, 2-12-1 W9-49 Ookayama, Meguro-ku, Tokyo 152-8522, Japan. ' Department of Industrial Engineering and Management, Tokyo Institute of Technology, 2-12-1 W9-49 Ookayama, Meguro-ku, Tokyo 152-8522, Japan. ' Department of Industrial Engineering and Management, Tokyo Institute of Technology, 2-12-1 W9-49 Ookayama, Meguro-ku, Tokyo 152-8522, Japan

Abstract: Dynamic changes in external circumstances in a mega-competitive environment have prompted high-technology firms to pursue a high-profit resilient structure for their survival. Among Japanese chemical industry firms, Shin-Etsu Chemical has constructed a highly profitable and resilient structure by focusing its business segments into four core fields. This was made possible by fusing indigenous strength and lessons learned from global best practices primarily from its US subsidiary, Shintech. Shin-Etsu|s success in this global coevolution strategy, which has led to efficient fusion and enabled its noteworthy establishment of a high-profit resilient structure, provides constructive suggestions for firm survival strategy in a mega-competitive environment. On the basis of trends in patent data and utilising concepts of entropy, centrality and network externalities, this paper attempts an empirical analysis of Shin-Etsu|s efforts to construct a global coevolutionary mechanism and demonstrates the foregoing hypothetical view.

Keywords: social systems; high-profit resilient structures; global coevolution; fusion; network externalities; patent data; entropy; chemical industry; Japan; high technology firms; high-tech firms; best practice.

DOI: 10.1504/IJSSS.2010.031467

International Journal of Society Systems Science, 2010 Vol.2 No.1, pp.63 - 83

Published online: 05 Feb 2010 *

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