Institute for Development Studies, University of Nairobi

This paper tries to provide an analytical explanation to the dynamic performance of the Japanese Small and Medium Industries from a technology management and organizational perspective. First, the transformation stages of these businesses is discussed to give a better understanding to the issue of dynamism amongst these industries. The approach of these businesses to technology upgrading and eventual innovation stage is then analysed. The Japanese system of small inceremental improvements on technology known in Japanese as kaizen in combination with a system of business conversion method practiced by these businesses is examined. The organizational structure and characteristics of these businesses is also assessed since it is inseparable from the technology management method of these businesses. Enterprise netivorking, the most outstanding aspect of the organizational trait of these businesses is analysed as to how it facilitates technology upgrading and innovation. It is from the analysis of this combination of technology management practice and the organizational form of the Japanese manufacturing SMEs that lessons aimed at the development of manufacturing SMEs in Kenya is finally drawn in the last section of this paper.