This paper discusses three main issues: the historical and contemporary evolution of subcontracting in Japan, the influence of Deming's approach on subcontracting, and the adaptability of Japanese subcontracting systems in other cultural contexts. With reference to the evolution of subcontracting in Japan, we make recourse to various theories of subcontracting to help us understand the reasons of development of subcontracting in Japan. An interesting point raised by Nishiguchi is that producer strategy is the main reason for subcontractors adopting highly asset specific entities. This view is in contrast to the traditional theories of contracting. Finally, cases of successful transplants of Japanese consumer electronics and automobile suppliers industries in the u.k. and the U. S. demonstrate that the transfer of Japanese model of subcontracting to foreign contexts is possible and is not culture-bound.