Abstract: IBM Japan as the Double-Faced Agent

Osamu Uda


How a subsidiary in a particular country develops basically depends on the charter-agreement between its parent company and its subsidiary and the capability of its subsidiary. However, we can also see the reality of interplay between these two factors and other exogenous factors—for example, regulatory procedures and business practices in particular countries. The interplay creates the new contexts surrounding subsidiaries dynamically. At times, it might bring about deregulation. In this paper, mainly dealing with the development project of the "Tokyo Olympic System" by IBM Japan, we explore how the project led to deregulation of data communications in Japan, as well as the accumulation of technology in IBM. IBM headquarters went ahead with the project for letting people know the application of data communications to their society. IBM Japan faced legal problems under telecommunications regulations, which prohibited the connection of its own computers with public communications lines. However, IBM Japan got concessions that allowed connecting its computer with public lines temporarily from the Japanese government in the name of the international event. As a result, Japanese companies recognized data communications as useful in their businesses and began to lobby for deregulation of data communications. Therefore, the public communications act was revised at 1971, enhancing telecommunications deregulation in Japan.