MacauStudiesinManagementSeriesNo.6'JorgeR.S.BastoMACAUFOUNDATION

MACAUSTUDIESINMANAGEMENTSERIESN0.6BYTHEFACULTYOFBUSINESSADMINISTRATIONUNIVERSITYOFMACAUMACAUl960s-l990sTECHNOLOGYUPGRADINGINATOYMANUFACTURER-ADYNAMICANDINTERACTIVESYSTEMOFSTRATEGICMANAGEMENTJorgeR.S.BastaPUBLISHEDBYMACAUFOUNDATION

TitleAuthorSeriesSeriesEditorPublishedbyMacau1960s-1990sTechnologyUpgradinginaToyManufacturer-ADynamicandInteractiveSystemofStrategicManagementJorgeR.S.BastoMacauStudiesinManagementNo.6NelsonJosedosSantosAntonioMacauFoundation(Apartado3025,Macau)August,1996ThecopyrightofthispublicationisjointlyownedbytheMacauFoundationandtheauthor.Allrightsreserved.Nopartofthispublicationmaybereproduced,storedinaretrievalsystem,ortransmitted,inanyformorbyanymeans,electronic,mechanical,photocopying,recordingorotherwise,withoutthepriorwrittenpermissionofthepublisher.PrintedbyDistributedbyPriceTipografiaWelfareLda.CulturalPlazaMacauLtd.MOP$70ISBN972-8147-84-8

MACAUl960s-l990sTECHNOLOGYUPGRADINGINATOYMANUFACTURER:-ADYNAMIC&INTERACTIVESYSTEMOFSTRATEGICMANAGEMENTCh.1.INTRODUCTION(Pg.1-28)Ch.3.CONTEXTOFUPGRADING(Pg.43-90)Ch.2.CONTENTOFUPGRADINGCh.4.PROCESSOFUPGRADING(Pg.29-42)(Pg.91-130)Ch.5.DISCUSSION&CONCLUSIONS(Pg.131-154)

TableofContentsTableofContentsPg.Ch.lINTRODUCTION11.1.Summary11.2.TheMotives31.3.AnOverviewofUpgrading4a.Strategy4b.Capabilities5c.Technology7d.DynamicInteractions13e.ChineseOrganizations151.4.TheGenericProposition181.5.TheUnitofAnalysis201.6.TheMethods211.7.TheLimitations24Ch.2THECONTENTOFUPGRADING292.1.POPTOYSperiod,mid-1960stomid-1980s292.2.PLASTOYSperiod,mid-l980sto199434Ch.3THECONTEXTOFUPGRADING433.1.PLASTOYSInnerContext433.2.PLASTOYSOuterContext54a.ThePlasticsIndustry55b.TheToyIndustry59c.ManufacturinginthePearlRiverDelta(1960s-641990s)c.l.IndustrializationofHongKong(1960s-1970s)64c.2.RelocationofForeignManufacturersinH.K.66(mid-1960s-1970s)c.3.De-industrializationofHongKong(1980s-1990s)69c.4.RelocationofH.K.ManufacturersinthePearlRiver74Delta(1980s-1990s)c.5.ManufacturinginMacau(mid-1960s-1990s)79

TableofContentsTableofContents(Cont.)Pg.Ch.4TIIEPROCESSOFUPGRADING914.1.TheOn-goingManufacturingCycle92a.Marketing92b.Development95c.Production994.2.TheManufacturing-ImprovementProjects101a.CAD/CAMMouldMaking102b.JointR&DAgreement111c.CNCInjectionMoulding119d.Assemblylineforsolarcells125Ch.5DISCUSSIONANDCONCLUSIONS1315.1.TechnologyandStrategyInteractions1315.2.Movingvs.UpgradingContend140a.Moving140b.TheUpgradingChallenge142b.l.Technoware142b.2.Orgware144b.3.Inforware145b.4.Humanware1465.3.ImplicationsforFurtherResearch152Bibliography1-VlIndexI-IV11

Ch.l.INTRODUCTIONIIdiICONTENTOFUPGRADINGSummaryTheMotivesAnOverviewofUpgradingTheGenericPropositionTheUnitofAnalysisTheMethodsTheLimitations(Pg.1-28)CONTEXTOFUPGRADINGIinIPROCESSOFUPGRADING

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INDEX

Bright,8-stages,12,109,123,129,135Mechanizationofprocessingoperations,12Rationaliz.ationofassemblywork,12Butleretal.,58Capabilities,Overviewof,5Chinese,5cardinalrelationships,16Businesscards,26Management,4,20,131Organizations,15,16,23Post-Confucianhypothesis,15Corecompetence,6,7,17,41,131Deming,W.,22Double-edgedsword,117,143Drucker,P.,4Fashion,31,63,131,149Fitparadigm,18Foreigninvestments,65,68,88GeneralSystemofPreferences,80Guandongprovince,74,75,78HamelandPrahalad,5,6,7,17,27,41HongKong,De-industrializ.ationof,69Economyevolution,70Industrializ.ationof,64Manufacturingindustriesin,64Plasticsmanufacturingsector,70RelocationofForeignManufacturersin,66Skilledworkforcein,72Toyindustytrade,74Toymanufacturingindustry,71Hung,C.,65,67IndexIndependentworkteams,138IndustrialTechnologyInstitute,ll3ItamiandNumagami,5,13,15,133,138,152Iterativeway,98,103,108,121Japaneseclients,94Jointventures,67,86,lllJoint-stockcompany,35KaderIndustrial,68,150Knowthycustomer,94Legalseparateness,45Limitationstomove,141Limitationstoupmarket,149Lowerlaborcostlocations,140Macau,Economyevolution,79Governmentsupport,87Keyopinions,86,88,ll5,ll6Manufacturingin,79Totalexportsevolution,80Toyexportseasonality,82Toyindustryevolution,81ToyindustryNRW,85Toyindustryworkforce,84Manufacturingprocesses,Equipmentmanufacturers,55Equipmentsuppliers,57Injectionmoulding,120Machiningoperation,I03Mouldingmethods,58Mouldingpolymers,56Rawmaterialsuppliers,55Thermoplastics,55,56MattelInc.,60,66,148MFNstatus,71Mintzberg,H.,5

IndexMovingandupgrading,151Movingvs.upgrading,140,150Multi-FiberAgreements,79Non-residentworkers,39,85,86,116Organizationalconfiguration,25Largeassemblylineworkshop,50Largemould-makingworkshop,46Largeplasticsmouldingworkshop,48Partsout-processingscheme,80PearlRiverDelta,54,61,64,71,74,75,141Manufacturingin,64RelocationofH.K.Manufacturersin,74)Toymanufacturersin,54Wagesin,116Pettigrew,A.,5,21,23,33,40Pitono,D.,9,10,134,142Plasticprocessors,55Plasticsindustry,54,55PLASTOYS,10-storeybuildingof,34,38Assemblylineforsolarcells,125Assemblylineworkshop,51Bottleneck,135CAD/CAMmouldmaking,102,110,136CAD/CAMsystem,l04CNCinjectionmouldingmachine,124CNCinjectionmoulding,119,136Concentricdiversificationstrategy,37,40Corecompetence,41Distributionofworkforce,53Electric-dischargemachining,l06Executivemanager,31,32,34,43,44,94,Ill,112,113Factsabout,22Founder,29,34,43,4411PLASTOYS,Injectionmouldingworkshop,49InnerContext,43JointR&DAgreement,36,39,95,111,115,118,134,136Laborcostsforoperation,·73Machiningoperation,103Makecommitmentof,118Managementprocessoftechnologyupgrading,I00Management-laborinteraction,52Manageress,35,43,44,47,49,51,53,93,94,96,102,103,112Manufacturingcapabilities,2,35,38,41,91,101Manufacturingimprovementprojects,2,19,41,91,101,152Marketing-likeactivity,92Matrix-likeproductionorganization,99Mechanisticconfiguration,45Mechanizationofinjectionmoulding,123Mechanizationofmouldmaking,109Mouldmakingworkshop,34,47,108,109,IllOn-goingManufacturing,91,92,95,100,152OuterContext,54Partstandardizationofproduction,127Period,34Portfolioofsmallbusinessunits,45Processdevelopment,36,95,98Productdevelopment,39,95Productengineer,94,96,97Productlines,37Productionprocess,30Rationalizationoftheassemblyline,129Registers,26,45Technologyupgradingin,40,91,100,118,134,153

PLASTOYS,Topmanagementfamility-team,43Wages,53POPTOYS,5-storeybuildingof,29,31,132Concentratedgrowthstrategy,32Period,29Productlines,32Porter,M.,4Redtape,78,86,116ReddingandWong,17,23Relocation,1991Survey,75,76,781993Survey,75,77,78Research,Genericproposition,18,19,29,131,152Implicationsof,152Limitationsof,24Methodsof,21Motivesof,3Objectivesof,2Relevantissues,20Unitofanalysis,20Seasonalcalendarofevents,62Seasonalpatternofbusinesscycle,81Seasonality,35,63,82Shenzhen,73,74,115Skilledworkers,Importationof,117Standards,Quality,36,96Safety,36,98StateScienceandTechnologyCommisionofChina,89Strategicmanagement,3,13,19,60,131,152Keyissuesof,3StrategyandTechnology,DynamicInteractions,2,13,131,152lllStrategy,Overviewof,1,4Pioneers,4Taylor,F.,51,129,137Technology,Componentsof,9,10,11,142Humanware,10,134,146,153Inforware,10,134,145,153Orgware,10,11,134,144,153Overviewof,7IndexTechnoware,9,10,11,134,142,153Upgrading,2,142,148Toyfairs,62Toyindustry,59,62,89,131,141,143Calendarofseasonalevents,54Companies'strategies,63Widedistributionchannel,54Toypurchases,62,63Toysupermarkets,62UnitSynchroProductionSystem,138Upgrading,Challenge,142Contentof,29Contextof,43Processof,91Valuechain,7,8

AI

MACAUSTUDIESINMANAGEMENTSERIESEditedbyNelsonJosedosSantosAntonioQUALITYMANAGEMENT:100QUESTIONSANDANSWERSQualityResearchGroup,FacultyofBusinessAdministration,UniversityofMacauISBN972-8147-71-6164pagespaper1995QUALITY:THEORYANDPRACTICENelsonJosedosSantosAntonio,FacultyofBusinessAdministration,UniversityofMacauISBN972-8147-61-9100pagespaper1995CONSUMERVALVESANDMARKETSEGMENTATIONINCIIlNA:ISSUESANDIMPERATIVESFORMARKETINGMANAGERS-ANEXPLORATORYSTUDYLeonardoAnthonyNajarroDioko,FacultyofBusinessAdministration,UniversityofMacauISBN972-8147-53-8187pagespaper1995THEDYNAMICIMPACTOFCULTUREONORGANIZATIONSTadashiUmezawa,DepartmentofBusinessAdministration,TokyoKeizaiUniversitySiewHuatKongandCarlosNoronha,FacultyofBusinessAdministration,UniversityofMacauISBN972-8147-76-7152pagespaper1996QUALITYMANAGEMENTANDCHINESECOMPANIESINMACAUAntonioTeixeira,FacultyofBusinessAdministration,UniversityofMacauISBN972-8147-52-X173pagespaper1996Forfurtherinformation,pleasecontact:MacauFoundationP.O.Box3052MacauTel:Fax:(853)345977(853)345979

ABOUTTHISBOOKStrategy,intheoryandinpractice,hasbeenthesubjectofmuchacademicandmanagerialinterest.Thegenericpropositionofthisresearchadvancesthatthe"adoptionandimplementationoftechnologyisadynamicandinteractiveprocessofstrategicmanagement".Observedasanevolutionaryprocess."Technologyupgrading"atitsfourkeycomponents-technoware,orgware,humanwareandinforware-wasundertaken.respectively,throughcontinuousactionsinon-goingmanufacturing.andthroughdiscreteactionsinmanufacturing-improvementprojectsbyaplasticsandtoymanufacturerover30yearofoperationinMacau.InatimewhenmanyevidencesaboutmanufacturersofMacauarerevealingthe"Move"oftheirlabour-intensiveoperationsacrosstheborderintotheSpecialEconomicZones(SEZs)ofSouthernChinatotakeadvantageoflowerproductioncoststhere.a"Technologyupgrading"solutionishereindefendedforasinglecase,asapossibleandfeasiblegradualdevelopmentprocessforrespondingtocompetingpressureswithsuccess.THEAUTHORJorgeR.S.BastoholdsadegreeinMechanical/ProductionEngineering.apost-graduationinWeldingEngineeringand.amasterdegreeinManagementSciences.BorninMacau.hebeganpractisinginametalworkingfactoryinPortugal.followedbylecturingintheH.K.Polytechnicand,laterbyheadingaGovernmentdepartmentofOccupationalHygieneandSafetyinMacau.Hisinterestsinindustrialengineeringpractice,withemphasisintheblendingofproductivitywithsafety,havelargelymotivatedthisresearch.asapurposefulcontributiontotheadvancementofknowledgeintheareaofstrategicmanagementoftechnologyupgrading.byreportingacustomizedapproachofWestern-basedthoughtsinharn19nywithanevidence-enrichedincursionintoaChinesebusinessorganization'.~I!ISBN972-8147-84-8