Interorganizational Relationships and Structural Changes in Traditional Craft Production Areas

The aim of this study is to analyze the interorganizational relationships that manufacturers in traditional craft production areas, which are in the declining phase of their life cycle but still survive, have established, and to clarify the decisions made by manufacturers in traditional craft production areas to survive. This study examined the Oshima-Tsumugi textile production area in Kagoshima, Japan. The results of the case analysis revealed that the decision-making process for establishing interorganizational relationships among textile manufacturers is implicitly influenced by wholesalers’ intentions. Textile manufacturers seek to survive by developing distribution channels outside wholesalers and by consolidating managerial resources through vertical integration among textile manufacturers. A new finding of this study is that, in the late decline phase, competing textile manufacturers aimed to develop horizontal cooperative relationships.