BGR Takeaways for Sessioin 2
Post on 01-Mar-2016
DESCRIPTIONHow Biz Governments work 2
BGR - Session 2The Japanese Financial System: From Postwar to the New Millennium HBSSupplementary Reading:Japan: Free, Fair & Global HBS, January 22, 1999
Takeaways1. It is the underlying aim or focus of the body-politic taken as a whole (or a significant part of it) that determines the societal paradigm, whether individualistic or communitarian. The reading demonstrates that the Japanese society is communitarian.
2. The reading also shows how with the best of intentions, a no holds barred communitarian approach can lead to systemic deterioration --- regulatory and governance failures as well as lack of discipline (including the essential discipline ordinarily imposed by the financial sector), with potentially disastrous consequences.
3. Obvious issues with Japan trying to be free, global and fair: Informal restrictions embedded in the system remain e.g. entry barriers cross border acquisitions/FDI into Japan, administrative guidance. Independent regulation is absent! Accounting standards and disclosure requirements are weak. Corporate governance (and protection of interests of all stakeholders) is questionable. Weak anti-trust protection. Weak regulation for orderly take-overs. Poor credit rating system.
4. In a community-oriented, traditional, close-knit, society like Japan, important aspects of doing business in Japan are:
It is paramount that your enterprise is set up as a joint venture or partnership with a well-connected Japanese company (which should preferably be part of a Keiretsu thus acquiring membership of recognized Japanese club and all the benefits that flow from it). Essential to develop, over time, close relationships with all authorities that impact the business not be hostage to the Japanese partner. The business undertaking, and the manner it is carried out, must not only be aligned with government policy but also with what is socially acceptable in Japan.
BGR MBA Class of 2015 (Semester IIIB Nov 5 Dec 27, 2014)