Chapter 1: The principles of market and organization in interfirm relationships in the Japanese steel industry
Not only after World War II, but also before the war, steel was used very widely and was essential to many industries as a fundamental material; this meant that the steel industry supported a wide range of industries in Japan. In that sense, the steel industry is representative of materials industries. Therefore, in this chapter, I analyze the history of Japan’s steel industry, highlighting the interfirm relationship. Indeed, even though there are plenty of splendid studies on the Japanese steel industry before World War II, they do not focus on interfirm relationships. Compared with advanced West European countries and the US, Japan was a latecomer to the modern steel industry. That is, Japan started its steel industry in earnest from the early twentieth century although old iron works had already existed in the nineteenth century. However, as will be demonstrated later, Japan had attained self-sufficiency in steel in the 1930s; furthermore, the Japanese steel industry had boasted international competitiveness in the 1960s. For that reason, this chapter covers the period from before the war up to the high economic growth period of postwar. Based on the viewpoint of the analysis that was emphasized in the introduction, this chapter focuses on how market and organizational principles have intertwined. Section 1.1 depicts how a market principle and an organizational principle intertwined in the steel industry of prewar Japan. Next, section 1.2 takes up interfirm relationships in the Japanese steel industry during the high economic growth period.