Product Architecture, Organizational Design, and HRM Practices: Comparing Japanese, Korean, and Chinese Firms

This paper examines the relationship between product development and human resource management practices in East Asian firms. Based on a review of preceding studies, we first posit the following three hypotheses: (1) Firms strategically choose their product architecture, taking into account factors such as internal management resources and external product market conditions. (2) Firms strategically choose their organizational design for product development activity reflecting their choice of product architecture. (3) There is a complimentary relationship between the chosen product architecture and the organization of product development on the one hand and human resource (HR) management practices on the other. Next, we present our findings from case studies in Japan, Korea, and China focusing on firms making the same products (cellular phones, liquid crystal televisions, and business information systems), followed by the analysis of data obtained through a questionnaire survey of firms in the manufacturing and software industries in the three countries. The results of both the case studies and the questionnaire survey support the first and second hypotheses. As for the third hypothesis, although we were unable to detect complementarity between the organization of product development and HR management practices, we did find complementarity between product architectures and HR management practices.