Japanese and UK Corporate Management, Case Study Example

There are various factors that led to the difference in corporate management between Japan and the UK. Japanese corporate governance is the first factor. Japan is known to have weak corporate governance because it does not encourage or welcome foreign investors to take over in their country. It has defenses to protect it from takeovers. In this case, we can see the SPEJ released 20 Hollywood movies in Japan, and this made them capture their home video market. Managers lack the desire to strive in open investments as in case the president of Sony Pictures entertainment. Japan convinced the Sony corporation top executives to stop division of Sony Digital Entertainment and fund it fully. This will make it 100% subsidiary of Sony Corporation that will explore market opportunities.

Contrasting cultures between Japan and the UK also contributes to emerging difference in corporate governance. Japanese is believed to be committed to their work in their place of work unlike the workers in the UK. They have a high social orientation at work and unconditional priority of work over their families. They also believe in team work of flexible multi skilled workers and specialization. Their production policy bases on keeping a high quality while minimizing costs due to waste and inefficiency. For example, the Sony Digital entertainment had made enormous strides despite having 40 employees with cramped offices of an unassuming sky scrapper in Tokyo’s center. The Japanese in general believes their cultural support is robust for reliance in case of maximum production. For example, Fukuda’s staff also work for long hours than any other division but are also known to be the most satisfied group of employees

Customs and values between UK and Japan in decision making for corporate management have contributed to difference existing in both countries. Japan believes in direct communication by directors to their employees. Decisions should be contributed by everyone in the organization and not only, by those in the top line management. Their decision making process is slow, but easy to implement because it eliminates resistance among the members of the organization. For example, Fukuda of SPEJ approaches Munekata of SPE of Hollywood in 2006 with a proposal of developing a large number of cell phone accessible site introduced the plan to Sony Corporation’s top executives and after coming to an agreement they approved the idea and provided over $400 million. In the UK, however, the process is autocratic and extremely quick this is because it does not have much involvement (Financial Reporting Council), it encourages resistance among members and hence, it takes time to implement.

Negotiation techniques application in international ventures is another factor. Negotiation means, searching for an agreement that will satisfy both parties involved. Each country or cultures has its own way of negotiating. When coming to a negotiating agreement, they should understand each other’s way of dealing, expectation and strategies. Through the joint venture that was established in 2001 between Sony Corporation and Swedish telecommunications provider Ericsson, there was the emergence of Sony Ericsson, which was a world wide mobile handset industry. The Japanese are well prepared for negotiation and will always be informed about the other cultures. They use the keiretsu model whereby a group of people from all sections of the company and its partners come together to do negotiations. This is evident when Fukuda of SPEJ and his team approached mobile phone carriers; to test the concept of the three minute clip in mobile phones with the consumers. UK uses the four stage method which entails investigation, presenting the deal, bargaining and coming to an agreement (Financial Reporting Council).
Comparative theory of the corporate governance supports this theory and gives supporting theoretical information on conclusions regarding to their management and governance.

Recommendation and Solutions

The Prime Minister of Japan should appoint two influential committees to deal with its weak corporate governance. The committee has to issue a package of structural reforms that serve as a rebuke to business leaders. It should also lower the corporate taxes and try to provide a simpler system to attract foreign direct investors.

References

Financial Reporting Council, FRC. (2006). The UK Approach to Corporate Governance. Retrieved 24 April, 2012 from <http://www.frc.org.uk/documents/pagemanager/frc/FRC%20The%20Uk%20Approach%20to%20Corporate%20Governance%20final.pdf>

Morck, R & Nakamura, M. (1999). Japanese Corporate Governance and Microeconomic Problems. Harvard Institute of Economic Research 1893.

Yafeh, Y. (2000). Corporate Governance in Japan: Past Performance and Future Prospects. Oxford Review of Economic Policy 16 (2), 74-84.