Japan's Top Management from the Inside by Makiko Yamada

By Makiko Yamada

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Extra resources for Japan's Top Management from the Inside

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In addition to the general authority held by the representing director, the practice of simultaneously serving as both board director and executive officer means there is no one to check on the management of Japanese corporations. In the absence of a watchdog, directors/executive officers are free to dictate intracompany activities and engage in dealings with outside parties. Furthermore, almost all business decisions, including those on corporate policies and strategies, are made by the board of directors behind the scenes.

In short, without the rapid expansion of the Japanese economy the current style of management could not have evolved. Although life-long employment and cooperative relationships with labour unions are considered to be the major characteristics of Japanese companies in the postwar era, these are not the foundations of Japanese management. Rather they evolved out of the business environment faced by postwar managements. It is also important to note that labour unions played a decisive role in shaping several aspects of labour management, namely the seniority-based pay structure and fixed annual pay rises.

After the initial phase Pfizer Japan started to employ foreigners, and because of the worldwide promotion system used by the Pfizer group, the headquarters interviewed wouldbe employees first, then Japanese staff interviewed them and decided who should be employed in Japan. Shino and Inaba never complained about non-tariff barriers in Japan, but it seems to the author that finding excellent Japanese staff must be the most difficult barrier to overcome for foreign companies. The hardest part of selling a medicine in Japan is securing the Ministry of Health and Welfare's approval to have the medicine covered by public health insurance.

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