Paper short abstract:

The aircraft manufacturing strategies of Mitsubishi Heavy Industries and Honda throughout the 2000s show a good contrast of failure and success. Obtaining type certification in the United States was crucial for developing the aircraft. Honda succeeded it by developing its business jet in the US.

Paper long abstract:

The aircraft manufacturing strategies of Honda and Mitsubishi Heavy Industries (MHI) throughout the 2000s show a good contrast of success and failure. Obtaining type certification in the United States was crucial for aircraft product development. Honda successfully obtained the type certification by developing its business jet in the United States. Operations management in manufacturing must meet the conditions for ensuring safety under the institutional regulations. Both MHI and Honda are Japan's leading manufacturers, and both companies launched a new business of aircraft manufacturing after the 2000s. MHI developed a 70-seater and 90-seater regional jet in Japan, but was unable to obtain the type certification in the United States and postponed deliveries several times. In October 2020, MHI announced that it would postpone the development of regional jets due to the economic downturn caused by the spread of COVID-19 infection. Honda has developed an eight-seater business jet in North Carolina, USA. Honda recorded the highest sales in the world on the business jet segment in 2019. The aircraft manufacturing strategies require institutional perspectives. Analyzing the causes of the failure of MHI, we found three reasons; MHI designed and manufactured aircraft in Japan without emphasizing the institutional regulations of obtaining type certification in the United States. MHI thus disregarded the importance of the sales market regulations for aircraft. MHI changed the president of an aircraft manufacturing subsidiary every several years. The alliance strategy of MHI with Bombardier has brought about conflicts in the organization of MHI. Honda has taken the lead in obtaining type certification in the United States, and the president, who has long-term responsibility of more than 15 years, has led the organization. Honda has been developing jet engine technology through an alliance with GE. Given the manufacturing competence of MHI and Honda are highly esteemed, either the success of Honda or the failure of MHI is not attributed to the dynamic capability of internal resources. Two cases show the importance of emphasizing the institutional environment in which multinational companies operate.