Franchises have recently emerged as the most rapidly expanding industry positioned to create a large impact in the domestic economic. The Chinese franchise industry developed rapidly in the period prior and subsequent to WTO accession with more than 50% of new franchises brands emerging since 2000. M&A transactions in the Chinese franchise industry have progressed actively. In the period from 2005-2007, due to the wholesale and retail market opening in accordance with the guidelines laid forth within the MOU by the WTO the Chinese franchise market is now the largest market in the world all despite a short history of only 20 years. The amount of franchise market research on China is disproportional to its current size and development potential. Beginning in the 1990s, market research conducted by the International Franchise Association focused on emerging markets in Eastern Europe and China. While the research dealt with the Chinese investment environment, it insufficiently explained the market region and cultural environment. The purpose of this research is (i) to investigate the determinants of the performance of franchise systems in China and (ii) new contract renewals based on performance factors. This study will complement existing research in terms of the franchisee perspective. This study may also prove of the benefit to the franchise companies entering the Chinese franchise market enabling them to develop an effective strategy. This study shows that support, incentives, and system standardization by franchisor yielded a positive effect on management performance. This is consistent with previous studies by Shin (2000) and Kim (2008) targeting Korean franchises. Therefore, in the Chinese market, the franchisor must focus on support, incentives, and system standardization rather than concentrate only on the recruitment of franchisees in order to improve revenue. Hypotheses regarding franchisor control have been dismissed in existing research, in the opinion of this study, due to their complexity and inability to control the merchant as a one-kind-assessment-standard. Our findings show that the franchisees' financial condition, management ability and entrepreneurial spirit, among franchisee's characteristics, have a positive effect on franchisor's business performance and satisfaction for the franchisee. This is consistent with previous studies on headquarters' management performance of Lussier (1996), Heo and Jang (2008), and franchisees' financial condition, management ability and entrepreneurial spirit effect on franchisor's satisfaction of Weaven and Franzer (2007), Kim (2009), Han (2009), and Yoon etc. (2008). Therefore, when permitting a franchisee, financial condition, management ability, entrepreneurship of the franchisee should be carefully considered. Among relational factors between franchisor and franchisee, trust has the positive influence on the management performance of the franchisor while conflict has a negative effect. However, trust, commitment and conflict factors have been shown not to have any impact on the satisfaction of the franchise headquarters. This result is consistent with the previous studies of Pavlou and Ba (2000), Morrison (1999), Weaven and Frazer (2007), Kim and Park (1994), Sohn (2007) which show that trust between franchisor and the franchisees have a positive effect and that conflict has a negative impact on franchisor's management performance. Other factors causing a negative effective on the franchisor's management performance are a rapid environmental changes and uncertainty in the business. This is consistent with Campbell et al (2007), Kim and Kim (2009), Han and Baek (2008). Finally, the high management performance and satisfaction of the franchise headquarters has a positive effect on the intention of franchise renewal. In the case of large markets such as China, the franchisor's strategy and the role is very important. In this study, we also investigated the characteristics of franchisor and franchisee, relationship, and environmental uncertainty affecting on the management performance and satisfaction of franchisor. Recently, Korean franchises are attempting to enter foreign markets through the rise in popularity of Korean culture and entertainment commonly referred to as the Korean wave. This study provides recommendations for Korean franchises intending on entering the Chinese market. First, in order to achieve stable profits, the franchise corporation needs to support the operation of the individual franchisee through incentives and standardization of services. Second, because trust between the franchisor and franchisee has a positive effect on management performance, on-going discussion and cooperation is necessary to reduce the level of conflict.
There is nothing more important than the form and function in design, because every design product can be done on the basis of them. Form and Function are already existed before the word of design has been appeared and all the natural and man-made things' basic organization is based on their organic relations. The organic relations is the source of vitality which identifies the subsistance of all the objects and the evolution of living creatures has been changed their appearances by the natural law and order. Design is no exception. Design is a man-made organic thing which is developed its own way according to the purposed aim and given situations. If so, what is the ultimate goal of design. It is without saying that the goal is to make every effort to contribute to the -human beings most desirable life by the designer who is devoting himself to their convenience and well-being. Therefore, the designer can be called the man of rich life practitioner. This word implies a lot of meanings since the essence of design is improving the guality of life by the man-made things which are created by the designer. Also, the things are existed through the relations between form and function, and the things can keep their value when they are answered to the right purpose. In design, thus, it is to be a main concern how to create valuable things and to use them in the right way, and the subject of study is focused on the designer's outlook of value and uk relations between form and function. Christopher Alexander mentioned the importance of form as follows. The ultimate object of design is form. Every design problem begins with an effort to achieve fittness between the form and its context. The form is the solution to the problem: the context defmes the problem. In other words, when we speak of design, the real object of discussion is not form alone, but the ensemble comprising the form and its context. Good fit is a desirable property of this ensemble which relates to some particular division of the ensemble into form and context. Max Bill mainatined how important form is in design. Form represents a self-contained concept, and its embodiment in an object results in that object becoming a work of art. Futhermore, this explains why we use form so freguently in a comparative sense for determining whether one thing is less or more beautiful than another, and why the ideal of absolute beauty is always the standard by which we appraise form, and through form, art itself. Hence form has became synonymous with beauty. On the other hand, Laszlo Moholy-Nagy stated the importance of function as follows. Function means the task an object is designed to fulfill the task instrument is shaping the form. Unfortunately, this principle was not appreciated at the same time but through the endeavors of Frank Lloyd Wright and of the Bauhaus group and its many collegues in Europe, the idea of functionalism became the keynote of the twenites. Functionalism soon became a cheap slogan, however, and its original meaning blurred. It is neccessary to reexamine it in the light of present circumstances. Charles William Eliot expressed his idea on the relations between function and beauty. Beauty often results chiefly from fittness: indeed it is easy to manitain that nothing is fair except what is fit its uses or functions. If the function of the product of a machine be useful and valuable, an the machine be eminently fit for its function, it conspicuously has the beauty of fittness. A locomotive or a steamship has the same sort of beauty, derived from the supreme fittness for its function. As functions vary, so will those beauty..vary. However, it is impossible to study form and function in separate beings. Function can't be existed without form, and without function, form is nothing. In other words, form is a function's container, and function is content in form. It can be said that, therefore, the form and function are indispensable and commensal individuals which have coetemal relations. From the different point of view, sometimes, one is more emphasized than the other, but in this case, the logic is only accepted on the assumption of recognizing the importance of the other's entity. The fact can be proved what Frank Hoyd wright said that form and function are one. In spite of that, the form and function should be considered as independent indivisuals, because they are too important to be treated just as the simple single one. Form and function have flexible properties to the context. In other words, the context plays a role as the barometer to define the form and function, also which implies every meaning of surroun'||'&'||'not;dings. Thus, design is formed under the influence of situations. Situations are dynamic, like the design process itself, in which fixed focus can be cripping. Moreover, situations control over making the good design. Judging from the respect, I defined the good design in my thesis An Analytic Research on Desigh Ethic, "good design is to solve the problem by the most proper way in the situations." Situations are changeable, and so is design. There is no progress without change, but change is not neccessarily progress. It is highly desirable that there changes be beneficial to mankind. Our main problem is to be able to discriminate between that which should be discarded and that which should be kept, built upon, and improved. Form and Function are no exception. The practical function gives birth to the inevitable form and the
1. Objective of the Study The objective of the study was to make fundamental suggestions for drawing a forest insurance system applicable in Korea by investigating forest insurance systems undertaken in foreign countries, analyzing the forest hazards occurred in entire forests of Korea in the past, and hearing the opinions of people engaged in forestry. 2. Methods of the Study First, reference studies on insurance at large as well as on forest insurance were intensively made to draw the characteristics of forest insurance practiced in main forestry countries, Second, the investigations of forest hazards in Korea for the past ten years were made with the help of the Office of Forestry. Third, the questionnaires concerning forest insurance were prepared and delivered at random to 533 personnel who are working at different administrative offices of forestry, forest stations, forest cooperatives, colleges and universities, research institutes, and fire insurance companies. Fourth, fifty three representative forest owners in the area of three forest types (coniferous, hardwood, and mixed forest), a representative region in Kyonggi Province out of fourteen collective forest development programs in Korea, were directly interviewed with the writer. 3. Results of the Study The rate of response to the questionnaire was 74.40% as shown in the table 3, and the results of the questionaire were as follows: (% in the parenthes shows the rates of response; shortages in amount to 100% were due to the facts of excluding the rates of response of minor respondents). 1) Necessity of forest insurance The respondents expressed their opinions that forest insurance must be undertaken to assure forest financing (5.65%); for receiving the reimbursement of replanting costs in case of damages done (35.87%); and to protect silvicultural investments (46.74%). 2) Law of forest insurance Few respondents showed their views in favor of applying the general insurance regulations to forest insurance practice (9.35%), but the majority of respondents were in favor of passing a special forest insurance law in the light of forest characteristics (88.26%). 3) Sorts of institutes to undertake forest insurance A few respondents believed that insurance companies at large could take care of forest insurance (17.42%); forest owner's mutual associations would manage the forest insurance more effectively (23.53%); but the more than half of the respondents were in favor of establishing public or national forest insurance institutes (56.18%). 4) Kinds of risks to be undertaken in forest insurance It would be desirable that the risks to be undertaken in forest insurance be limited: To forest fire hazards only (23.38%); to forest fire hazards plus damages made by weather (14.32%); to forest fire hazards, weather damages, and insect damages (60.68%). 5) Objectives to be insured It was responded that the objectives to be included in forest insurance should be limited: (1) To artificial coniferous forest only (13.47%); (2) to both coniferous and broad-leaved artificial forests (23.74%); (3) but the more than half of the respondents showed their desire that all the forests regardless of species and the methods of establishment should be insured (61.64%). 6) Range of risks in age of trees to be included in forest insurance The opinions of the respondents showed that it might be enough to insure the trees less than ten years of age (15.23%); but it would be more desirous of taking up forest trees under twenty years of age (32.95%); nevertheless, a large number of respondents were in favor of underwriting all the forest trees less than fourty years of age (46.37%). 7) Term of a forest insurance contract Quite a few respondents favored a contract made on one year basis (31.74%), but the more than half of the respondents favored the contract made on five year bases (58.68%). 8) Limitation in a forest insurance contract The respondents indicated that it would be desirable in a forest insurance contract to exclude forests less than five hectars (20.78%), but more than half of the respondents expressed their opinions that forests above a minimum volume or number of trees per unit area should be included in a forest insurance contract regardless of the area of forest lands (63.77%). 9) Methods of contract Some responded that it would be good to let the forest owners choose their forests in making a forest insurance contract (32.13%); others inclined to think that it would be desirable to include all the forests that owners hold whenerver they decide to make a forest insurance contract (33.48%); the rest responded in favor of forcing the owners to buy insurance policy if they own the forests that were established with subsidy or own highly vauable growing stock (31.92%) 10) Rate of premium The responses were divided into three categories: (1) The rate of primium is to be decided according to the regional degree of risks(27.72%); (2) to be decided by taking consideration both regional degree of risks and insurable values(31.59%); (3) and to be decided according to the rate of risks for the entire country and the insurable values (39.55%). 11) Payment of Premium Although a few respondents wished to make a payment of premium at once for a short term forest insurance contract, and an annual payment for a long term contract (13.80%); the majority of the respondents wished to pay the premium annually regardless of the term of contract, by employing a high rate of premium on a short term contract, but a low rate on a long term contract (83.71%). 12) Institutes in charge of forest insurance business A few respondents showed their desire that forest insurance be taken care of at the government forest administrative offices (18.75%); others at insurance companies (35.76%); but the rest, the largest number of the respondents, favored forest associations in the county. They also wanted to pay a certain rate of premium to the forest associations that issue the insurance (44.22%). 13) Limitation on indemnity for damages done In limitation on indemnity for damages done, the respondents showed a quite different views. Some desired compesation to cover replanting costs when young stands suffered damages and to be paid at the rate of eighty percent to the losses received when matured timber stands suffered damages(29.70%); others desired to receive compensation of the actual total loss valued at present market prices (31.07%); but the rest responded in favor of compensation at the present value figured out by applying a certain rate of prolongation factors to the establishment costs(36.99%). 14) Raising of funds for forest insurance A few respondents hoped to raise the fund for forest insurance by setting aside certain amount of money from the indemnity paid (15.65%); others wished to raise the fund by levying new forest land taxes(33.79%); but the rest expressed their hope to raise the fund by reserving certain amount of money from the surplus money that was saved due to the non-risks (44.81%). 15) Causes of fires The main causes of forest fires 6gured out by the respondents experience turned out to be (1) an accidental fire, (2) cigarettes, (3) shifting cultivation. The reponses were coincided with the forest fire analysis made by the Office of Forestry. 16) Fire prevention The respondents suggested that the most important and practical three kinds of forest fire prevention measures would be (1) providing a fire-break, (2) keeping passers-by out during the drought seasons, (3) enlightenment through mass communication systems. 4. Suggestions The writer wishes to present some suggestions that seemed helpful in drawing up a forest insurance system by reviewing the findings in the questionaire analysis and the results of investigations on forest insurance undertaken in foreign countries. 1) A forest insurance system designed to compensate the loss figured out on the basis of replanting cost when young forest stands suffered damages, and to strengthen credit rating by relieving of risks of damages, must be put in practice as soon as possible with the enactment of a specifically drawn forest insurance law. And the committee of forest insurance should be organized to make a full study of forest insurance system. 2) Two kinds of forest insurance organizations furnishing forest insurance, publicly-owned insurance organizations and privately-owned, are desirable in order to handle forest risks properly. The privately-owned forest insurance organizations should take up forest fire insurance only, and the publicly-owned ought to write insurance for forest fires and insect damages. 3) The privately-owned organizations furnishing forest insurance are desired to take up all the forest stands older than twenty years; whereas, the publicly-owned should sell forest insurance on artificially planted stands younger than twenty years with emphasis on compensating replanting costs of forest stands when they suffer damages. 4) Small forest stands, less than one hectare holding volume or stocked at smaller than standard per unit area are not to be included in a forest insurance writing, and the minimum term of insuring should not be longer than one year in the privately-owned forest insurance organizations although insuring period could be extended more than one year; whereas, consecutive five year term of insurance periods should be set as a mimimum period of insuring forest in the publicly-owned forest insurance organizations. 5) The forest owners should be free in selecting their forests in insuring; whereas, forest owners of the stands that were established with subsidy should be required to insure their forests at publicly-owned forest insurance organizations. 6) Annual insurance premiums for both publicly-owned and privately-owned forest insurance organizations ought to be figured out in proportion to the amount of insurance in accordance with the degree of risks which are grouped into three categories on the basis of the rate of risks throughout the country. 7) Annual premium should be paid at the beginning of forest insurance contract, but reduction must be made if the insuring periods extend longer than a minimum period of forest insurance set by the law. 8) The compensation for damages, the reimbursement, should be figured out on the basis of the ratio between the amount of insurance and insurable value. In the publicly-owned forest insurance system, the standard amount of insurance should be set on the basis of establishment costs in order to prevent over-compensation. 9) Forest insurance business is to be taken care of at the window of insurance com pnies when forest owners buy the privately-owned forest insurance, but the business of writing the publicly-owned forest insurance should be done through the forest cooperatives and certain portions of the premium be reimbursed to the forest cooperatives. 10) Forest insurance funds ought to be reserved by levying a property tax on forest lands. 11) In order to prevent forest damages, the forest owners should be required to report forest hazards immediately to the forest insurance organizations and the latter should bear the responsibility of taking preventive measures.
Conserving the recored cultural inheritance is actually the duty of all of us. Above all, the management and conservation of archives and documents is up to archivists who have technical knowledge about archival science. Archivists have to not only conserve archives and documents but also carry out classifying and appraising them in order to define them as current historic ones. The fundamental education about archival science is made up of history and law. Because Archive is the organisation which manage archives and documents produced by legal and administrative actions. Although there are still arguments about technical knowledge and degree archivists have to acquire, most of them prefer the studies related with history and emphasize legal studies to be the general boundary of archivits' ideology and trust. The training course about conservation of archives is conducted in about 9 National Archives of Torino, Milano, Venezia, Genova, Bologna, Parma, Roma, Napoli, Palermo. The training course in 19th was mostly based on the lectures of Phaleography, Diplomatics. There were not the education about archival science yet. Toward the end of 19th and 20th, people stressed the most basic subject in the training course of National Archive was not Phaleography and Diplomatics but archival science. The goal of archival science is to study the institution and organisation transferring archives and documents to Archive. And also it help archivists not wander about with ignorance of organisational and original procedures and divisions but know exactly theirs works. Like this, the studies on institution and organisation have got in the saddle as a branch of archival science since a few ten years. While archival science didn't evoke sympathy among people and experienced the tedious and difficult path in italy and other countries, Archive was managed by experts of other branches. As a result, there were a lot of faults in Archival Science. Specializing training course for Italian archivists came into being under the backdrop of Social Science Institute of Roma National University in 1925. The archival course of universities accomplished by the studies of history, law and economy. And such as Eugenio Casanova and Giorgio Cencetti were devoted archival science was abled to settle down in national archive. The training course for experts of 'archival science, 'Phaleography and Diplomatics' in National Archive of Bologna(Archivio di Stato di Bologna) is one of courses conducted in 17 National Archives in italy. This course is gratuitous and made up of 8 subjects(Archivistica, Paleografia, Diplomatica, Storia dell' Archivio, Notariato e documenti privati, istituzione medievale, istituzione moderna, istituzione contemporanea) students have to complete for two years. Students can receive the degree through passing twice written exam and once oral test. After department of Culture and education finally puts the marks of students, the chief Nationa Archive of Bologna confer the degree of 'archival science Phaleography and Diplomatics' on students passing the exams. This degree authenticates trainees' qualification which enables him to work at the archive in province, district and administrative capital city and archive of comunity and so on. Italian training course naturally leads archivists to keep in contact with valuable cultural inheritance through training in Archive. And it shows the intention to strengthen the affinity with each documents in the spot of archival management before training archivists. Also this is appraised as one of positive policies to conserve the local cultual inheritante in connection with the original qualitity of national archive with testify the history of each region. Traning course for archivist in Italy shows us the way how we have to prepare and proceed it. First, from producing documents to conserving than forever there has introduced 'original order that is to say a general rule to respect the first order given at the time producing documents'. Management of administrative documents is related consistently with one of historical documents. Second, the traning course for archivist is managing around 17 national archives. because italian national archive lay stress not or rducation of theory bus on train for archivest working in the first time of archival science. Third, diplomatics and phaleography for studies about historical document support archives. Forth, the studies on history id proceeding by cooperation between archivist and historian around archive. How our duties is non continuinf disputer who has to conserve and manage document and archives, but traing experts who having ability, vision and flexible thought, responsibility about archivals.
With the advent of knowledge-based society, the revitalization of technological innovation type SMEs, termed "inno-biz" hereafter, has been globally recognized as a government policymakers' primary concern in strengthening national competitiveness, and much effort is being put into establishing polices of boosting the start-ups and innovation capability of SMEs. Especially, in that the inno-biz enables national economy to get vitalized by widening world markets with its superior technology, and thus, taking the initiative of extremely competitive world markets, its growth and development has greater significance. In the case of Korea, the government has been maintaining the policies since the late 1990s of stimulating the growth of SMEs as well as building various infrastructures to foster the start-ups of the SMEs such as venture businesses with high technology. In addition, since the enactment of "Innovation Promotion Law for SMEs" in 2001, the government has been accelerating the policies of prioritizing the growth and development of inno-biz. So, for the sound growth and development of Korean inno-biz, this paper intends to offer effective management strategies for SMEs and suggest proper policies for the government, by researching into the effect of technological innovation capability and technology commercialization capability as the primary business resources on business performance in Korean SMEs in the light of market information orientation. The research is carried out on Korean companies characterized as inno-biz. On the basis of OSLO manual and prior studies, the research categorizes their status. R&D capability, technology accumulation capability and technological innovation system are categorized into technological innovation capability; product development capability, manufacturing capability and marketing capability into technology commercialization capability; and increase in product competitiveness and merits for new technology and/or product development into business performance. Then the effect of each component on business performance is substantially analyzed. In addition, the mediation effect of technological innovation and technology commercialization capability on business performance is observed by the use of the market information orientation as a parameter. The following hypotheses are proposed. H1 : Technology innovation capability will positively influence business performance. H1-1 : R&D capability will positively influence product competitiveness. H1-2 : R&D capability will positively influence merits for new technology and/or product development into business performance. H1-3 : Technology accumulation capability will positively influence product competitiveness. H1-4 : Technology accumulation capability will positively influence merits for new technology and/or product development into business performance. H1-5 : Technological innovation system will positively influence product competitiveness. H1-6 : Technological innovation system will positively influence merits for new technology and/or product development into business performance. H2 : Technology commercializing capability will positively influence business performance. H2-1 : Product development capability will positively influence product competitiveness. H2-2 : Product development capability will positively influence merits for new technology and/or product development into business performance. H2-3 : Manufacturing capability will positively influence product competitiveness. H2-4 : Manufacturing capability will positively influence merits for new technology and/or product development into business performance. H2-5 : Marketing capability will positively influence product competitiveness. H2-6 : Marketing capability will positively influence merits for new technology and/or product development into business performance. H3 : Technology innovation capability will positively influence market information orientation. H3-1 : R&D capability will positively influence information generation. H3-2 : R&D capability will positively influence information diffusion. H3-3 : R&D capability will positively influence information response. H3-4 : Technology accumulation capability will positively influence information generation. H3-5 : Technology accumulation capability will positively influence information diffusion. H3-6 : Technology accumulation capability will positively influence information response. H3-7 : Technological innovation system will positively influence information generation. H3-8 : Technological innovation system will positively influence information diffusion. H3-9 : Technological innovation system will positively influence information response. H4 : Technology commercialization capability will positively influence market information orientation. H4-1 : Product development capability will positively influence information generation. H4-2 : Product development capability will positively influence information diffusion. H4-3 : Product development capability will positively influence information response. H4-4 : Manufacturing capability will positively influence information generation. H4-5 : Manufacturing capability will positively influence information diffusion. H4-6 : Manufacturing capability will positively influence information response. H4-7 : Marketing capability will positively influence information generation. H4-8 : Marketing capability will positively influence information diffusion. H4-9 : Marketing capability will positively influence information response. H5 : Market information orientation will positively influence business performance. H5-1 : Information generation will positively influence product competitiveness. H5-2 : Information generation will positively influence merits for new technology and/or product development into business performance. H5-3 : Information diffusion will positively influence product competitiveness. H5-4 : Information diffusion will positively influence merits for new technology and/or product development into business performance. H5-5 : Information response will positively influence product competitiveness. H5-6 : Information response will positively influence merits for new technology and/or product development into business performance. H6 : Market information orientation will mediate the relationship between technology innovation capability and business performance. H7 : Market information orientation will mediate the relationship between technology commercializing capability and business performance. The followings are the research results : First, as for the effect of technological innovation on business performance, the technology accumulation capability and technological innovating system have a positive effect on increase in product competitiveness and merits for new technology and/or product development, while R&D capability has little effect on business performance. Second, as for the effect of technology commercialization capability on business performance, the effect of manufacturing capability is relatively greater than that of merits for new technology and/or product development. Third, the mediation effect of market information orientation is identified to exist partially in information generation, information diffusion and information response. Judging from these results, the following analysis can be made : On Increase in product competitiveness, directly related to successful technology commercialization of technology, management capability including technological innovation system, manufacturing capability and marketing capability has a relatively strong effect. On merits for new technology and/or product development, on the other hand, capability in technological aspect including R&D capability, technology accumulation capability and product development capability has relatively strong effect. Besides, in the cast of market information orientation, the level of information diffusion within an organization plays and important role in new technology and/or product development. Also, for commercial success like increase in product competitiveness, the level of information response is primarily required. Accordingly, the following policies are suggested : First, as the effect of technological innovation capability and technology commercialization capability on business performance differs among SMEs; in order for SMEs to secure competitiveness, the government has to establish microscopic policies for SMEs which meet their needs and characteristics. Especially, the SMEs lacking in capital and labor are required to map out management strategies of focusing their resources primarily on their strengths. And the government needs to set up policies for SMEs, not from its macro-scaled standpoint, but from the selective and concentrative one that meets the needs and characteristics of respective SMEs. Second, systematic infrastructures are urgently required which lead technological success to commercial success. Namely, as technological merits at respective SME levels do not always guarantee commercial success, the government should make and effort to build systematic infrastructures including encouragement of M&A or technology trade, systematic support for protecting intellectual property, furtherance of business incubating and industrial clusters for strengthening academic-industrial network, and revitalization of technology financing, in order to make successful commercialization from technological success. Finally, the effort to innovate technology, R&D, for example, is essential to future national competitiveness, but its result is often prolonged. So the government needs continuous concern and funding for basic science, in order to maximize technological innovation capability. Indeed the government needs to examine continuously whether technological innovation capability or technological success leads satisfactorily to commercial success in market economic system. It is because, when the transition fails, it should be left to the government.
Korea's business is composed of a few large-sized enterprises (which can be abbreviated as LSE) and a majority of small-sized enterprises (SSE). Although there has been a growing recognition of the need for the development of medium-sized enterprises (MSE) which can serve as a link between SSE and LSE, as yet there has not yet been a consensus on the definition, characteristics and the function of the MSE in Korea. Nowadays, the world is being globalized, and Japan and China are in competition to ne a great economic power. While East Asia is experiencing rapid changes, promoting MSE which can secure flexibility and efficiency through covering up the limitation of LSE and SSE is needed in order to respond the global market which is being specialized. The features of MSE in Japan can be listed as follows. First, the MSE in Japan is developing the company through getting into niche markets which are hard for major companies to enter rather than developing markets in order to compete against major companies directly. While MSEs are endeavoring to build the business firmly in the domestic market, they can possess special and competitive technical skills through trials and errors; so that they can get a chance develop their business through independent business system rather than putting their effort to compete against major companies. Second, from the MSEs with competitive edge in the market, there are many contributions to the national exportation. Those MSEs produce in domestic and maintain the quality of high price products which need cutting-edge technology, while they relocate the low and middle priced goods to the country where manufacturing costs are low, so that they can maintain the price competitiveness. Third, the industrial structure in Japan is formed from dual structure between major companies and small sized companies. In other words, in Japan's industrial structure which are composed of subcontract structure, this dual structure has taken a major role of small sized companies' growth and manufacturing businesses' international competitive power. Forth, MSE in Japan adopt a strategy of putting their value on qualitative scale growth rather than quantitative scale growth. In this paper, the case of Japanese MSE is analyzed. Along with its long history of Industrialization, Japan has a corporate environment where the SSEs can develop as a MSE and later a LSE through a full-support system. Among its SSEs, there are a number of world class corporations equipped with a large domestic market, win-win cooperation with the LSEs and an independent technology development. It can also be observed that these SSEs develop into MSEs with sustainable growth potentials. This study will focus on the condition under which the MSEs of Japan have been developed, and how they have survived the competition between SSEs and LSEs. Through this study, this paper attempts to offer solutions to Korea's polarization between the SSE and LSE, while providing the basis for SSEs revitalization. In general, if both extremities phenomenon deepen between LSE and SSE, there are possible fears of occurring disutility in national economy by the monopolization of LSE. For that reason, enterprise group, which can make SSE or MSE compete LSE in some area and ease the monopoly and oligopoly problem, is needed. This awareness has been shared for ages long. Nevertheless, there is no legal definition for MSE in Japan, and there is no definition about the enterprise size or unified view of MSE between scholars, but it is defined differently by each of academical person or research institution and study meeting. For that reason, this paper will organize the definition of MSE in Japan, and then will propose the characteristics of the background which has made MSE secure competitiveness and sustainable growth in global market. This study focus on that because through this process, the positive change to the awareness of MSE can be proposed in Korea and to seek the policy direction for building institutional framework which can make SSE become MES. Through this way, the fundamentals for SSE to become MSE can be managed and some appropriate suggestions which will be able to make MSE enter the global market in the future can also be proposed. Due to these facts, this study is very important and well timed task. In a sense of this way, this study will examine the definition and role of MSE in Japan. after this examination, this study will deal with the status, special feature, and promotion policy for MSE. Through this analysis of MSE in Japan, the foundation which be able to set the desirable role model for MSE in Korea can be proposed. Also, the political implication which is needed to push ahead to contribute to creating employment and economic growth through sustainable growth of MSEs in economic system of Korea can be offered through this study. It has been found that Japan's MSE functions as an indispensable link among various industrial structures by holding a significant position in employment rate, production and value added. Although the MSEs took up less than 1% of the entire number of businesses with 2700 manufacturing firms and 7000 non-manufacturing firms, its employment ratios are about 15%, while taking about 25% of the manufacturing industry's exports. In industries such as machinery and electronics which is considered Japan's major industry, the MSEs showed a higher than average ratio of manufacturing exports and employment rate. It can be analyzed that behind Japan's advantageous industries, close and deeply knit MSEs exist. Although there are no clearly stated policies geared towards the MSEs by the Japanese government, various political measures exist such as the R&D Project and the inducement of cooperation between enterprises which gives room for MSEs to participate in the SSE policies. In relation to these findings, the following practical measures can be considered in order to revitalize Korea's MSEs: First, there is a need for a legal definition of MSE and the incentives to provide legal support for its growth. Second, if a law to support the MSEs is established, it could provide a powerful inducement for the SSE to grow as a MSE, rather than stay as a SSE. Third, there is a need for a strategy of MSEs to establish a stable base in the domestic market and then advance to the global market with the accumulated trial and error and competitiveness. Fourth, the SSE themselves need the spirit of entrepreneurship in order to make the leap to a MSE. Because if nothing is to be changed about the system on the firms that grew, and the parts of the past custom was left to be managed alone, confusion and absence of management can take place. No matter how much tax favors the government will give and no matter how much incentive there could be through the policies, there are limits for industries to higher the ability to propagate. And because of that it is a period where industries need their own innovative skills to reform their firms.