CONCEPTUAL AND EMPIRICAL EVIDENCE OF INTERNATIONAL MACRO AND MICRO CONGRUENT GENERIC STRATEGIES: A STUDY OF JAPAN AND THE U.S.

INTRODUCTION

As trade becomes freer around the world, the pressures of competition are becoming greater. Due to this increased competitive intensity in world trade, efforts to understand the macro and micro ramifications of international competitive superiority are of considerable

Porter (1990a) suggests that nations create environments that can encourage or discourage firm competitiveness. Dunning (1990, 1992) posits that a better understanding of the interplay between competitive advantages of countries and the firms of that country may offer significant advances to competitive international trade theory. The interaction between a country and its firms is of great importance to both emerging and fully industrialized nations. Although this is a vital area of understanding and many have offered theoretical explanations (e.g., Doz and Prahalad, 1991; Kogut, 1985; Porter, 1990b), more empirical testing must be performed to understand the effects of congruent or divergent macro (i.e., government policy)--micro (i.e., firm) generic strategies.

One interesting but overlooked aspect of the generic strategies research is the paucity of research concerning differences between manufacturing and service industrial sectors in relation to macro and micro strategies. From 1900 to 1984, the percentage of the population employed in the U.S. service sector increased from 30% to 74% (Bateson, 1989). Moreover, Koepp (1987) claims that 85% of all new jobs created in the U.S. since 1982 have been in the service sector. According to Bateson (1989), the service sector has surpassed the manufacturing base on worldwide GNP, accounting for 59% of the world's productivity output.

In a major step of recognition for service firms, Fortune magazine announced in 1995, for the first time since 1955, their decision to include service corporations -- banks, life insurance firms, utilities -- in their annual Fortune 500 list. In the first year of the new list, the number of service firms surpassed industrials, 291 to 209 (New York Times, 1995). The economic might of the service sector is not only growing, but is different from the manufacturing sector. Characteristics of the service sector normally include inseparability, intangibility, perishability, and heterogeneity (Dahringer, 1991). These traits make the two industry sectors distinct and worthy of investigation.