What makes transplants thrive: managing the transfer of “best practice” at Japanese auto plants in North America

Multinational companies are a conduit by which superior organizing principles can be transferred across national, institutional, and cultural environments. However, for such transplantation efforts to be successful, the companies face the challenge of adapting their practices and principles to the requirements of local environments. In the process they risk losing the performance benefits from those practices. In this paper we study the North American transplant production facilities of Japanese automobile producers--companies known for their ability to achieve superior labor productivity and quality in their manufacturing plants, along with high levels of product variety--for insight into how the practices associated with superior performance (including work systems, technology choices, and supplier relations) can be implemented outside of Japan. By comparing the Japanese transplants with automobile plants in Japan, and Big 3 plants in North America, we show that the extent of transfer varies by type of practice. Furthermore, we find that plants can shape and alter their external environment, and can also buffer themselves from it. Despite these modifications, we find that the transplants are able to achieve productivity and quality levels similar to plants in Japan.