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Cases on International Business and Finance in Japanese Corporations

Cases on International Business and Finance in Japanese Corporations

Mitsuru Misawa
Copyright Date: 2007
Pages: 192
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  • Book Info
    Cases on International Business and Finance in Japanese Corporations
    Book Description:

    While Japan's export-oriented economy has been advancing with astounding speed, significant differences remain between the management philosophy and techniques used within Japanese companies and those used in the West. These include the significant differences in the use of capital budgeting techniques, economic and political assessment of projects, decision-making styles, and techniques of corporate governance.

    eISBN: 978-988-220-423-2
    Subjects: Economics

Table of Contents

  1. Front Matter
    (pp. i-vi)
  2. Table of Contents
    (pp. vii-x)
  3. Preface
    (pp. xi-xiv)
    Mitsuru Misawa
  4. Acknowledgements
    (pp. xv-xvi)
    Mitsuru Misawa
  5. About the Author
    (pp. xvii-xviii)
  6. Introduction
    (pp. 1-10)

    The history of Japan’s economy during the 60 years after the Second World War followed a trend of internationalization. Many corporations switched from doing business domestically to doing business internationally. Because Japan is geographically small with limited natural resources, economic growth and a higher per capita income became viable only through the export of products to overseas markets. As a result, every company concentrated on producing inexpensive goods of better quality in a cost-effective manner. Internationalization was the goal for every company.

    While globalization of the Japanese economy has been advancing with astounding speed, significant differences remain between the management...

  7. 1 Tokyo Disneyland: Licensing versus Joint Venture
    (pp. 11-28)

    In 1997, the senior executives of the Japanese Oriental Land Corporation (OL), known to many as the Japanese version of Disneyland,² were on a roller-coaster ride. They were at once anxious to grow their existing company through a new project as well as make Walt Disney Productions (WD) a risk-taking partner through direct investment in Japan’s second theme park. This was to be a precondition to participating in the new project being proposed.³ Although the partnership between OL and WD was a prominent success story of foreign investments in Japan by a US company, the partnership (see Exhibit 1) floundered...

  8. 2 Tokyo Disneyland and the DisneySea Park: Corporate Governance and Differences in Capital Budgeting Concepts and Methods between American and Japanese Companies
    (pp. 29-48)

    In the spring of 1997, it had been 14 years since Tokyo Disneyland opened its doors for business. Company executives at Japanese Oriental Land Corp. (OL), known to many as the company that brought Disneyland to Japan (see Exhibit 1) were enjoying the success of their well-established company and began looking at new business endeavors that would allow for further growth and enhance OL’s earning capability.

    While there was an undoubted need for growth and expansion, the timing and approach of any new endeavor would be critical. Management knew that most of OL’s customers were repeat visitors. However, while customers...

  9. 3 A Rogue Trader at Daiwa Bank (A): Management Responsibility under Different Jurisprudential Systems, Practices, and Cultures
    (pp. 49-60)

    July 18, 1995 was a day that Sumio Abekawa, president of the Japan-based Daiwa Bank, would never forget. On that day, Abekawa received a letter from Toshihide Iguchi, vice-president of the bank’s New York branch in charge of securities trading and control. In his letter, Iguchi explained that he had been selling securities that the bank had in custody to cover up for a loss he had caused by unauthorized and unlisted trading of US Treasury bonds. He reported that his trading had resulted in the bank’s loss of approximately US$1.1 billion¹ and that he had covered up his trading...

  10. 4 A Rogue Trader at Daiwa Bank (B): The Board Meeting on September 25, 1995, in Japan
    (pp. 61-64)

    On July 18, 1995, Sumino Abewaka, president of Daiwa Bank , received a letter informing him of illegal trading at the New York branch that had resulted in a loss of approximately US$1.1 billion. Over two months later, on September 25, a board meeting took place in the main headquarters in Osaka. Directors who had been in charge discussed the possible outcome and their responsibilities in relation to the incident. Heated discussion followed in an attempt to outline the responsibilities of officers and directors.

    When a bank traded US Treasury bonds, securities companies — the bank’s counterpart in the transactions — normally...

  11. 5 Hostile Takeover Battle in Japan: Fuji TV versus Livedoor for NBS
    (pp. 65-86)

    On January 17, 2005, Fuji Television Network Inc.¹ (Fuji TV), the centerpiece of the giant Fujisankei Communications Group (FCG),² made a takeover bid for Nippon Broadcasting System Inc.³ (NBS).⁴ The move intended to make NBS, an AM radio station that owned 22.5% of Fuji TV, a consolidated subsidiary. Their plans were thwarted, however, by maverick CEO Takafumi Horie and his rapacious internet company, Livedoor Co.⁵ Livedoor had purchased more than a third of the NBS stock through off-floor trading (see Exhibit 1), a move that violated Japan’s unspoken yet accustomed rule against this type of backdoor business practice that was...

  12. 6 Livedoor: The Rise and Fall of a Market Maverick
    (pp. 87-98)

    Livedoor Co. was founded in 1996 by Takafumi Horie. A high-profile, 33-year-old leader in the internet business, Horie had been leading his e-baby through a series of mergers and acquisitions (M&As) to expand its portfolio of businesses and secure growth. His strategies, which were based on US-style M&As that were considered unconventional in Japan, shifted into a higher gear in 2005 when he launched a hostile battle against Fuji Television Network Inc. (Fuji TV). Horie tried to take over control for Nippon Broadcasting System (NBS), a radio broadcaster in the media group led by Fuji TV.² The contest between Fuji...

  13. 7 Nireco Japan: Introduction of the Poison Pill
    (pp. 99-118)

    It has long been believed that hostile takeover bids had little chance of succeeding in Japan. This perception changed in early 2005 with the takeover battle for Nippon Broadcasting System Inc. (NBS), fought between Livedoor Co. Ltd. and Fuji Television Network Inc. (Fuji TV).¹ It was a high-profile case that attracted much media attention because it was the first domestic takeover bid (TOB) to use American-style merger and acquisition (M&A) tactics in Japan. With the battle for NBS, the threat of hostile takeovers had become a reality in Japan.

    In February 2005, Hidemaru Yamada, president of Nireco Corporation² thought this...

  14. 8 Ina Food Industry: A New Management Philosophy for Japanese Businesses
    (pp. 119-132)

    Ina Food Industry Co. Ltd. was situated in the city of Ina, Nagano Prefecture, and surrounded by the soaring mountains of the Japanese Alps. Hiroshi Tsukakoshi, Ina Food’s 68-year-old chairman (see Exhibit 1), had led the company through an incredible 48 years of continuous revenue and profit growth (see Exhibit 2). The company was a leading manufacturer of powdered agar,¹ a traditional gelatin product derived from seaweed (see Exhibit 3). In 2005, news about the medicinal benefits of its product led to a boom in demand. As a result, Ina Food experienced phenomenal growth in sales. Revenues for the six-month...

  15. 9 OSG Corporation: Hedging Transaction Exposure
    (pp. 133-150)

    On Monday, April 24, 2006, the US dollar fell to a new three-month low against the yen of ¥114.30/$ in Tokyo’s foreign exchange market, the lowest rate since January 16, 2006. This was a reflection of trading in New York three days earlier, on Friday, when the dollar had fallen more than 1.75% against the yen. The depreciation of the dollar against the yen was a direct result of a meeting of the group of seven industrialized nations (G7) leaders in Washington D.C. on April 21, 2006. In that meeting, G7 leaders voiced dissatisfaction over the slow speed of China’s...

  16. 10 Bank of Japan’s Meeting in March 2006: An End to the Quantitative Easing Policy?
    (pp. 151-168)

    As the Bank of Japan (BOJ) officials filed out of their 110-year-old headquarters on March 8, 2006, the world was watching. That might not seem so odd given the attention paid to the US Federal Reserve or European Central Bank. Yet, it had been more than a decade since entire economies had been waiting anxiously for the outcome of monetary policy talks in Tokyo.

    The main issue on the table was the BOJ’s quantitative easing policy — a five-year-old, super-loose, monetary stance, under which it had flooded the market with far greater amounts of liquidity than needed¹ (see Exhibits 1 and...

  17. Index
    (pp. 169-174)