Change and continuity in Japanese corporate reform

Abstract

Confronted with critical business situations in the late 1990s, Japanese firms began to tackle reforms in both corporate governance and human-resource management. These reforms advocated that Japanese firms shift from being organization-based to market-based corporations, similar to their US counterparts. However, the actual reform did not produce such an overall change but occurred with incremental and cumulative changes within the existing institutional framework. This article examines continuing changes in Japanese firms, and demonstrates that they are diversified into different directions as a result of gradual institutional change.