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

Rapp, William V.

This case for a large integrated steel producer, along 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 interactive 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. An example of this is Nippon Steel's development of an E-commerce system to automate its traditional faxed-based ordering system from the Japanese trading companies (TCs). In turn, US firms, such as Merck, who have often relied more on packaged software, are now customizing more. This is especially true 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 to be some convergence in approach by these leading software users. These cases 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 Nippon Steel and the Japanese steel industry are presented in the following case.

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Academic Units
Center on Japanese Economy and Business
Center on Japanese Economy and Business, Graduate School of Business, Columbia University
Center on Japanese Economy and Business Working Papers, 174
Published Here
February 10, 2011