1999 Reports

Steel: Tokyo Steel, K.K.: Gaining and sustaining long-term advantage through information technology

Rapp, William V.

This case for a Japanese mini-mill steel producer, together with other cases, supports an initial research hypothesis that leading software users in the US and Japan are very sophisticated in the ways they have integrated software into their management strategies. They use it to institutionalize organizational strengths and capture tacit knowledge on an iterative basis. In Japan this strategy has involved heavy reliance on customized and semi-customized software (Rapp 1995), but is changing towards a more selective use of package software managed via customized systems. This is seen in this case in Tokyo Steel's development of a system to automate and integrate its different mills. In turn, US firms, such as Merck, who have often relied more on packaged software, are customizing more. This is especially so for the systems needed to integrate software packages into something more closely linked with the firm's business strategies, markets, and organizational structure. Thus, coming from different directions, there appears some convergence in approach by these leading software users. The cases thus confirm what some other analysts have hypothesized; a coherent business strategy is a necessary condition for a successful information technology (IT) strategy (Wold and Shriver 1993). These strategic links for Tokyo Steel and the Japanese steel industry are presented in the following case.