7/18/2019 BGR Takeaways for Sessioin 2

http://slidepdf.com/reader/full/bgr-takeaways-for-sessioin-2 1/1

BGR - Session 2

“The Japanese Financial System: From Postwar to the New Millennium” HBS

Supplementary Reading :“Japan: Free, Fair & Global” – HBS, January 22, 1999

 Takeaways

1. It is the underlying aim or focus of the body-politic taken as a whole (ora signicant part of it) that determines the societal paradigm, whetherindiidualistic or communitarian. The reading demonstrates that the !apanese society is communitarian.

". The reading also shows how with the best of intentions, a no holdsbarred communitarian approach can lead to systemic deterioration --- regulatory and goernance failures as well as lack of discipline(including the essential discipline ordinarily imposed by the nancialsector), with potentially disastrous conse#uences.

$. %bious issues with !apan trying to be &free, global and fair'

• Informal restrictions embedded in the system remain e.g. entrybarriers – cross border acquisitions/FDI into Japan,administrative uidance.

• Independent reu!ation is absent

• *ccounting standards and disclosure re#uirements are weak.

• +orporate goernance (and protection of interests of all

stakeholders) is #uestionable.

• eak anti-trust protection.

• eak regulation for orderly take-oers.

• oor credit rating system.

. In a community-oriented, traditional, close-knit, society like !apan,important aspects of &doing business' in !apan are

• It is paramount that your enterprise is set up as a "oint venture or

partnership with a well-connected !apanese company (which shouldpreferably be part o# a $eiretsu thus ac#uiring membership ofrecogni/ed !apanese &club' and all the benets that 0ow from it).

 

ssential to deelop, oer time, close relationships with a!!

aut%orities t%at impact t%e business – not be %ostae to t%e Japanese partner

.

•  The business undertaking, and the manner it is carried out, must not only be a!ined with goernment policy but a!so &it% &%at is socia!!y acceptab!e in !apan.

BGR MBA Class of 2015 (Semester IIIB o! 5 – "e# 2$, 201%&