Decision-Making by Precedent and the Founding of American Honda (1948 - 1974)

40 Pages Posted: 27 Aug 2016

See all articles by Ramon Casadesus-Masanell

Ramon Casadesus-Masanell

Harvard University - Strategy Unit

John Heilbron

Harvard Business School

Date Written: August 2016

Abstract

American Honda was founded in 1959 as a wholly owned subsidiary of the Honda Motor Company to facilitate sales and distribution in the United States. The details of American Honda’s early history have long served as evidence in debates among scholars and practitioners about the managerial determinants of the subsidiary’s success. In particular, it is debated whether American Honda operated according to a deliberate or emergent strategy, i.e. whether or not strategic decisions made in the States conformed to the intentions of upper management. This paper presents evidence that Kihachiro Kawashima, President of American Honda from 1959 to 1965, made important decisions according to precedent set by his boss and mentor, Honda’s chief strategist, Takeo Fujisawa. It presents further evidence that these decisions may have contributed to the recovery of American Honda from its sales crisis during the late 1960s and its continued success thereafter. Addressing ourselves to concepts in the management literature, we argue that strategy realized by the appeal of subordinates to the historical precedent of their superiors defies categorization as deliberate or emergent.

Suggested Citation

Casadesus-Masanell, Ramon and Heilbron, John, Decision-Making by Precedent and the Founding of American Honda (1948 - 1974) (August 2016). Harvard Business School Strategy Unit Working Paper No. 17-016, Available at SSRN: https://ssrn.com/abstract=2830492 or http://dx.doi.org/10.2139/ssrn.2830492

Ramon Casadesus-Masanell (Contact Author)

Harvard University - Strategy Unit ( email )

Harvard Business School
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HOME PAGE: http://www.people.hbs.edu/rmasanell

John Heilbron

Harvard Business School ( email )

Soldiers Field Road
Morgan 270C
Boston, MA 02163
United States

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