M&A

5 conditions for successful Japanese cross border M&A

SoftBank’s acquisition of Finnish mobile games maker Supercell in 2013 for $1.5bn did not grab the headlines to the extent its $21.6bn acquisition of Sprint did, but Nikkei Business in its December series on cross border M&A points to it as evidence of the final characteristic necessary for successful acquisitions – “animal spirits” – a hunger for growth with the acquisition showing the direction in which Masayoshi Son wants to take the company.

The Nikkei Business magazine goes on to conclude the series with “Five Conditions for Success” in cross border M&As:

1. Do not go near M&As without a concrete and detailed management strategy for what will happen after the merger

2. Set up a specialist team within the company, which investigates target companies and draws up shortlists

3. Be very strict on the contents of the agreement. It will be vital when unforeseen problems occur after the acquisition.

4. For cross border acquisitions, the key is to motivate the management team in the acquired company. However a proper agreement must be put in place regarding switching to other companies and performance based compensation.

5. Make preparations in advance for all kinds of scenarios. Although it’s hard to predict events like the Lehman shock, preparations will help with coping with change.

I would add a few to that. For example, whilst it might be best to take some time before making radical changes to the acquired company, symbolic changes such as taking the parent company name relatively early on help focus the two companies on “what is different now” and “what we have in common” and stop both companies from sliding back into their pre merger habits, with the acquired company feeling neglected and directionless.

Try to bring the acquired company executives into the HQ fold as soon as possible. Even though it’s best to delegate to them the authority they are used to, it’s also important for them to understand how to socialise their proposals through nemawashi with their peers in the headquarters. Actually moving to Japan seems to have been a step too far for many non-Japanese executives, but frequent business trips should be encouraged and supported. Perhaps even a mentor could be appointed.

Finally, as the Nikkei Business itself points out, it’s actually the Japan HQ that needs to change if their acquisitons are to succeed.

If you are being acquired by a Japanese company, you may be interested in Japan Intercultural Consulting’s (represented by Rudlin Consulting in EMEA) post merger integration services.

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Successes of cross border M&A #6 – Terumo

When Terumo, Japan’s biggest medical device maker bought CaridianBCT from Gambro AB for $2.63bn in 2011, it was expected that the head of Terumo’s BCT unit, Hiroshi Nagumo, would take over as CEO of the new Terumo BCT company. However Nagumo decided to appoint the CEO of CaridianBCT, David Perez, as CEO instead, with Nagumo reporting into him as SVP and GM for Japan. Perezalso became an executive officer on Terumo’s main board and the headquarters of Terumo’s blood management unit was moved to CaridianBCT’s base in Colorado.

Nagumo says he made himself “Number Two” after objectively considering whether he could really perform as “Number One”. At the time Terumo’s total turnover was Y328bn,of which the blood management unit represented around Y25bn. CaridianBCT’s turnover was double that at around Y50bn. A third of the combined company’s sales were to the USA, and around 20% to Japan.

“When I thought about appointing myself as the CEO, and leaving the headquarters in Japan, I realised that I would always end up thinking about the customers that I had known the longest, the doctors in Japan” and that this would be counter to the objective of the acquisition, which was to develop new products and expand market share globally.

In 2012, the sales of the combined company’s blood management business actually fell in Japan, but thanks to growth overseas, the total turnover rose 4.1%.

As Nikkei Business points out in their series on cross border M&A last month, in the past when Japanese multinationals acquired companies overeas, they tended to send in Japanese managers to run them, but this does not work so well if, as in this case, the acquired company is larger than the acquiring company’s own business in that sector. It can lead to the demotivation of the staff in the acquired company and loss of customers.

However Terumo did reshuffle the management, and had a strong sense of how they wanted to proceed after the acquisition. Nagumo had been preparing a project called “Unite” from a year before the acquisition – it aimed to integrate sales, customer service and logistics across the two companies. Terumo fitted itself to CaridianBCT’s structures, except in Asia, where Terumo was stronger than Caridian, so a different structure, where Terumo’s operations there became TerumoBCT’s representative dealers.

It took a year to discuss, and then in 2012 it was announced as a one “fell swoop” integration – “we did not want to take so long that customers became confused” says Nagumo.

Production is taking longer to integrate. Decisions have to be made about what products will be made in the factories in the USA, Japan and Northern Ireland. On the other hand, Terumo’s quality control management has been introduced into Caridian’s operations already. As a result, claims have dropped to a quarter of the level before the acquisition.

Not everything went smoothly – Perez was amazed at the number of meetings deemed necessary by Terumo before a decision was made. At the same time, Terumo was puzzled as to when a decision was made, when it had not been properly “socialised” within the company. “A certain amount of time has to be allowed to understand what is different, culturally”, says Nagumo. In 2013, former Terumo staff will be posted long term to the USA and in 2014, former Caridian staff will be posted to the Japan office.

As a result of the success of the BCT business, Terumo has also moved its artificial heart business to the USA, a unit it purchased from 3M in 1990. As the Nikkei comments – it’s a nice illustration of how to make sure a post merger management structure fits market and customer needs.

If you are being acquired by a Japanese company, you may be interested in Japan Intercultural Consulting’s (represented by Rudlin Consulting in EMEA) post merger integration services.

Japan’s M&A boom – a way of forcing globalization?

I was reading the last chapter of a book (The 1990s and beyond (pdf)) I wrote which was published in 2000 about the history of Mitsubishi Corporation in London, and was reminded that I had come up with a concept of “forced globalization” to describe what Japanese companies might need to do to truly globalize, based on their experiences up to the 1990s. Much of what I said still holds true, but what I had not anticipated was the surge in cross border acquisitions by Japanese companies as another route into globalization these past ten years.

My view then was that Japanese companies will not “naturally” globalize, in a business-led pursuit of profitable growth, because of the “representing Japan” mindset of companies such as Mitsubishi Corporation, and the fact that so much knowledge creation and business creation is in Japanese and the Japanese staff feel most comfortable with keeping it that way.

I proposed that human resource-led “forced” globalization – starting with globalizing the management, might be the only way to break the mould.The graphic I produced to illustrate this is not in the pdf, so I have reproduced it here:

“Natural” globalization:

“Forced” globalization:

I was imagining Japanese companies would continue doing what we attempted at Mitsubishi Corporation in the 1990s, which was to hire and develop more non-Japanese people, in the hope that they would then create more global business. This strategy still continues for many Japanese companies, but as I predicted, takes time, and often the non-Japanese employees quit before it bears fruit, through frustration.

Acquiring an overseas company is an instant way to globalize the business, and in theory should instantly globalize the management. But as described in previous posts, often the overseas managers are kept at an arm’s length.

The bottom line from all of this, which has not changed at all in the past decades, is that Japanese companies will only do what the Japanese employees of that company see the need to do. The majority of Japanese employees are not likely to want to become global themselves – it is too far out of their comfort zone. Nor do they want to bring non-Japanese into their circles as this would be a threat to their own careers and status in the company. Nor do they want to be actively involved in the management of the overseas subsidiaries – the risks of being associated with any failure are too great.

The constructive message of this, however, is it is therefore up to the employees and management of the acquired company to take the initiative and ask to integrate with the Japan parent – just as the Brazilian employees and managers at Schincariol asked Kirin to change the company name to Brazil Kirin. Japanese executives are familiar and happy with complying with requests that come from “bottom up” and represent the consensus views of a group of employees.

If you are being acquired by a Japanese company, you may be interested in Japan Intercultural Consulting’s (represented by Rudlin Consulting in EMEA) post merger integration services.

Successes of Japanese cross border M&A #5 – Kirin

Given the headline grabbing news of Suntory acquiring Beam Inc for $16bn today, the second case study on Kirin in the final part of the Nikkei Business’s recent series on Japanese cross border acquisitions will have been read closely by Suntory executives. Suntory through the acquisition has become the third biggest drinks maker in the world, having already acquired Lucozade and Ribena from GSK in and Orangina Schweppes in 2009.

There were talks between Kirin and Suntory in 2010 regarding a possible merger which failed due to an inability to agree on the management and ownership of the merged organisation – Suntory is privately held, and still family run, whereas Kirin is a publicly listed company, belonging to the Mitsubishi group of companies.

Kirin had also been acquiring companies since 2007 when it bought the Australian dairy and beverage company National Foods which then acquired Dairy Farmers. Kirin then aquired Lion Nathan, a major Australian brewers, and formed Lion Nathan National Foods in 2009.

Kirin’s concern was that in a consumer facing industry, simply despatching executives from Japan to run the business would result in marketing and product development that does not suit the local market, so they have delegated a fair amount of authority to the local executives. It was a process of trial and error since 2010, with the acquisition of Brazil’s Schincariol (the second largest Brazilian brewery and beverage company after AmBev) in 2011 proving a turning point.

Kirin promoted the Brazilian COO to CEO with the new board having 3 Japanese and 4 Brazilian members. Schincariol was also still an owner-run company, with each factory managing its own purchasing and warehousing. Kirin could have intervened to standardize but was concerned that they may have made mistakes without local knowledge. So whilst major investments and disposals had to be approved by Japan headquarters, operational decisions were left to the local executives.

Schincariol managed to make Y3bn cost savings by 2012 and doubled their operating profit. At the request of the local staff, they changed the name to Brazil Kirin in November 2012.

Nikkei Business comments “it seems that learning from the company you acquire brings results.”

Successes of Japanese cross border M&A #4 – NTT Communications

Having covered the perceived failures of the Nippon Sheet Glass/Pilkington, Daiichi Sankyo/Ranbaxy and Ricoh/Ikon M&As, Nikkei Business in its December 9th edition then goes on to examine some of the more successful deals by NTT Communications, Kirin Holdings and Terumo.

NTT Communications bought US telecommunications company Verio in 2000 for $5.5bn, just before the dotcom bubble burst, resulting in NTT Communications posting a $5bn loss in 2002. Nikkei Business points out the same assumption was made “that the company would just keep growing as it is” that Nippon Sheet Glass and other Japanese companies made about their acquisitions and that the acquiring company then uses economic crises as an excuse for the acquisition’s failure and the need to shrink it down or cut back, rather than their lack of any plans for worst case scenarios.

NTT Communications went down that route, and did not make any further major acquisitions until 2011, however, they used the intervening years to completely overhaul their M&A strategy. Instead of relying on investment banks and consultants, they decided to build up their own knowhow and insist on planning beforehand how they were going to restructure any business, rather than after the acquisition was made. In the case of Verio, they pulled out of the ISP business and merged the backbone business with NTT Europe, leaving only small-medium enterprise hosting with Verio. This was in order for NTT to strengthen its services to larger customers.

As well as rethinking how to restructure their business, they also decided that future candidates for acquisition would be found by themselves, and analysed inhouse – all aspects from management, services, legal, financial and HR. They listed up over 1000 targets for this process. They saw the need to get back into the acquisition game as the telecommunications market was changing, and there was a need for interconnected large scale data centers, used by multiple customers. NTT Communications felt the only way to put such an infrastructure in place quickly was through acquisition. In 2012 they bought an Indian data center company Netmagic and UK company Gyron Internet, followed by a French web based conferencing system company Arkadin and then in 2013 spent a further $875m on US companies Virtela and Raging Wire. Operating profit has been on the rise since 2011, and sales look to be recovering next year too.

Successes & Failures of Japanese cross border M&A (#3 Ricoh and Ikon)

Ricoh undertook a “10,000 person restructuring” in 2011, using the usual method in Japan of trying to force into early retirement or transfer to subsidiaries their unwanted staff. This resulted in a judgement in the Tokyo courts in favour of two Japanese Ricoh employees on their claim that they had been unfairly forced to transfer to a subsidiary.

The Nikkei Business magazine, in its recent series on the successes and failures of Japanese cross-border M&A links this domestic issue to Ricoh’s acquisition of the US office equipment distributor Ikon Office Solutions in 2008 for $1.6bn. Ricoh acquired Ikon in order to compete with Canon, particularly in trying to enter the office tablet and projector markets in developed countries. However, just as with Nippon Sheet Glass/Pilkington and Daiichi Sankyo/Ranbaxy, the sudden change in operating environment from the Lehman Shock meant that Ricoh’s resulting bloated structure with many overlaps following the acquisition became a far more acute problem.

As the Nikkei points out, Japanese companies need to recognise that following a major M&A, their own Japan headquarters needs to change its structure in order to remain strong in everchanging global business environments.

On that point, during my recent visit to Japan, I was surprised how often the idea of setting up a separate, global headquarters, possibly not even based in Japan, was brought up by Japanese executives at the various blue chip companies I visited.

Successes and failures of Japanese cross border M&A (2 – Daiichi Sankyo and Ranbaxy)

In September 2013 the US Federal Drug Agency issued an import alert, prohibiting further manufacture of FDA regulated drugs at one of Ranbaxy Laboratories’ Indian factories, causing shockwaves at Daiichi Sankyo, who had bought 64% of Ranbaxy in 2008. This was the second time an alert had been issued in the past 5 years.

Nikkei Business, in their series on Japanese cross border M&As, draws parallels with the NSG/Pilkington case blogged previously saying that the same mistakes had been made by the Japanese acquiring company, in failing to do enough analysis beforehand.

Daiichi Sankyo thought it had fixed the quality problems which were exposed by the FDA in 2009, by firing the Ranbaxy former owner and CEO and sending a director from Japan as well as a quality control officer from the US subsidiary.

Daiichi Sankyo has not disclosed to the Nikkei the cause of the quality problems – apparently this is not even shared widely within the company. The Nikkei supposes that Daiichi Sankyo lacked understanding of Ranbaxy’s organisational structure and corporate culture. A supplier to Ranbaxy explains that “Indian companies do not work in a team the way Japanese companies do. There is a lack of solidarity, and a lack of trust between the boss and subordinates. There is just the hierarchical link between directors and employees. Orders from above are obeyed unquestioningly, and even if juniors sense there are problems, they do not say anything.”

Another comments “Employees in Indian companies are different from Japanese companies in that if they are asked for data and documentation from the authorities, they do not put the information together very thoroughly. There is also not the atmosphere where issues can be openly disclosed.”

If this is the case, it is therefore difficult to understand what is going on from the outside, and the word of the people on the ground cannot be 100% relied on, notes the Nikkei. What is needed for successful M&A is a strengthening of governance – management must be given the structures to understand exactly what is going on on the shopfloor.

As the Nikkei concludes, another failing of Japanese cross border M&As often lies in not being able to appoint a trusted person who also has the necessary local and industry expertise. The Indian executive, Atul Sobti, whom Daiichi Sankyo appointed in 2009 to replace the CEO/owner had previously been an executive at Japanese car companies, only lasted a year. In my experience, it is often the case that Japanese companies rate familiarity with Japanese corporate cultures over industry expertise when hiring local senior management. However Daiichi Sankyo seem to have changed their mind on this, as the successor to Sobti, Arun Sawnhey, is a pharmaceutical industry veteran.

One reason Japanese companies often give for not interfering too heavily in the newly acquired subsidiary is that they are anxious to retain the existing senior management, recognising that they do not have executives in the Japan headquarters they can despatch who have sufficient local and global industry experience and expertise. At the same time, judging by both the Ranbaxy and Pilkington cases, the local executives complain of a lack of access, support and influence in relation to the Japan HQ to carry out their jobs, and leave, or conversely, are quickly got rid of when problems arise or financial targets are not met.

A better balance has to be found between implementing the necessary changes to governance and strengthening oversight, whilst also ensuring that the senior local executives are given the support and integrated into the network back in Japan HQ to allow them to perform their roles effectively. Japanese executives are too ready to keep non-Japanese executives at arm’s length, so that if there are any problems, Japanese executive hands are clean.

Successes and failures of Japanese cross border M&A (Pilkington & Nippon Sheet Glass)

Softbank’s $21bn acquisition of Sprint, the merger of Tokyo Electron and Applied Materials and most recently LIXIL’s 3bn euro acquisition of German bathroom fitting manufacturer Grohe have provoked a two part series in the Nikkei Business magazine on the successes and failures of Japanese cross border M&A, starting with the article of 2nd December, which I read just as I was travelling to Japan to help with a post merger integration project.

Since 2000, domestic M&As have decreased, but cross border M&As have soared for Japanese companies, with a pause after the Lehman Shock in 2009-2011. Of the 15 M&As noted by the Nikkei from March 2011 to October 2013, 14 were cross border, and the majority were deals of over $1bn.

The Nikkei comments that although the reason for these acquisitions is clear (the hunt for growth outside the saturated Japanese domestic market), the post merger story has not been that rosy for many of the acquiring companies in the past decade. The Nikkei focuses on three cases – Nippon Sheet Glass’s acquisition of Pilkington in 2006, Daiichi Sankyo’s acquisition of Ranbaxy in 2008 and Ricoh’s acquisition of US company Ikon Office Solutions in 2008, to see what lessons can be learnt.

Nippon Sheet Glass/Pilkington

NSG were worried that they might be dumped by Toyota, their key customer, if they could not match Toyota’s overseas expansion. Before the acquisition of Pilkington, 80% of NSG’s sales were in Japan. Pilkington’s turnover was double that of NSG, so by acquiring it, NSG was finally able to be on equal terms with Asahi (who had previously acquired Saint Gobain). After the acquisition, the March 2008 results showed that NSG Group sales were 80% overseas, with profits at a record high. Stuart Chambers and other Pilkington executives took over the key management positions in the group and it seemed as if the company had become global overnight.

However the good times did not last, as the Lehman Shock brought about the world economic crisis, followed by the euro debt crisis, impacting the two main businesses of automotive glass and construction glass. The NSG management did not take any effective action “and then it hit us” says a Japanese executive at the time “that we knew nothing about Pilkington”. They thought it would be a growth engine, so did not do anything beyond cut employees and shut down operations.

Too focused on growth and globalization

This is where Japanese M&As often come unstuck says the Nikkei – they are so focused on the growth and globalization, they do not fully develop strategies and pathways for ensuring the M&A actually bears fruit. “We had to focus on the immediate crisis, rather than the growth of the new company” says Kazumitsu Fujii, an executive officer.

NSG did know Pilkington quite well – having held equity in the company since 2000, and collaborated on various projects together. Howerver they had not undertaken any simulation of the financial impacts of any worsening market conditions post merger. As one executive at the time says “we did not even have any thought that the economic situation would get so bad so quickly”.

Stuart Chambers resigned in September 2009, citing family pressures from being in Japan all the time – and it was felt that his heart was not really in the job.

NSG had a 4-3-3 10 year vision. The first four years were to be about integrating the two companies’ systems and cutting down the debts. The next three years were to expand sales in automotive and construction glass and the second 3 years were to be about investing in new businesses.

However the company has not managed to move on from the first phase yet. It seems that the lack of understanding and knowledge between the two companies has meant that the negative financial situation has dragged on. “We thought that once we had made the leap into being a global company, all kinds of paths would open up to us, but it was not the case” says a former employee.

The new President, Keiji Yoshikawa says “we are having to fix areas we did not see at the time of the acquisition”. Pilkington had centralised, standardized global HR management and sales systems which looked efficient at first glance, but meant that there were regional differences which were ignored.

For example, construction glass has to take account of the different climates and lifestyles, but apparently such products were not given much priority. So NSG have started to allocate budgets to projects such as fire resistant glass in Germany.

After 7 years, NSG have finally started to understand Pilkington, concludes Nikkei Business.

Standardization and taking the initiative

My personal thoughts on this, having conducted various cross cultural communications seminars for Pilkington and Nippon Sheet Glass at the time, was that the two companies knew each other pretty well. The gap was more to do with differing views and levels of experience in managing globally.

Pilkington, like many Anglo Saxon multinationals, would indeed emphasise a standard unified approach to management and product development around the world, in order to ensure maximum profitability. The Japanese view that products should be customised to suit different markets is not cost effective, in this world view.

The other issue, as is so often the case when Japanese companies acquire Western ones, is that both parties sit back and wait for the other to take the initiative – and this was amplified by the Lehman Shock – where quick and decisive action was needed. Pilkington may well have expected NSG to take the lead, whereas NSG was expecting Pilkington to have the global experience to provide the guidance for what to do in such extreme circumstances.

Japanese companies should try treating foreign acquisitions not as lodgers but adopted sons

There has been a 33% drop in the number of overseas acquisitions by Japanese companies in the first quarter of this year compared to the last year. I view this as a temporary blip because of the weakening yen. However, recently announced corporate reshuffles show that senior executives are being asked to step down early if they are perceived to have been responsible for the failure of major overseas acquisitions. So there may be an element of “once bitten, twice shy”.

The most recent quarterly survey of 148 leading Japanese companies by The Nikkei indicates there is still an appetite for acquisition. Of the executives polled, 42.6% said they wanted to acquire companies both domestically and abroad, with North America and Europe being the favoured overseas destinations.

One way these executives could do a better job of acquiring overseas companies is to be conscious of the fact that Japanese companies behave like traditional Japanese families – and adapt their acquisition and integration processes accordingly. For example, Japanese families, even to this day, adopt son-in-laws, who take on the family name and become the heir, especially if there is a family business at stake.

Japanese companies seem reluctant to use the “adopted son-in-law” model for their overseas acquisitions. Sometimes the acquisition is more like a marriage – a long courtship of holding an equity stake in a large foreign company and then a final consummation some years later. And like a marriage, this approach requires effort and commitment on both sides, through thick and thin, to build a new family, with a new set of values and customs.

A more prevalent model seems to be treating the acquired overseas company like a lodger in the house, rather than a member of the family. So long as the lodger behaves, with no loud music late at night, and pays the rent on time, they are left to their own devices.

Initially North American and European companies may welcome this approach. They are allowed to continue as before, with plenty of autonomy and not much interference. However, like a lodger, they start to feel isolated from the family activities, and wonder whether they should be looking to move out to better lodgings. Or they may hit financial difficulties and stop paying the rent, at which point the Japanese landlord cracks down hard.

When North American and European companies acquire other companies, some attention is at least nominally paid to the cultural aspects, but the main focus is on integration or imposition of systems, structures, policies and targets. The acquired company is usually left in no doubt as to how they are going to have to adapt to the new parent, well before the ink is dry on the purchase agreement.

If Japanese companies do not feel comfortable with this clinical approach, then a lot more thought needs to go into how exactly their new overseas subsidiary can be a true adopted son and heir – or spouse.

This article by Pernille Rudlin first appeared in the April 22nd 2013 edition of The Nikkei Weekly and also appears in Pernille Rudlin’s new book “Shinrai: Japanese Corporate Integrity in a Disintegrating Europe” which is available as a paperback and Kindle ebook on Amazon.

Subtle factors that motivate workers differ in Japan and the West

Every time a Japanese company acquires a Western company, there is a concern about how the Japanese organization will deal with the “high risk, high reward” culture that is prevalent not only in the financial industry but across many Western business sectors.

Actually, Japanese multinationals have been dealing with this issue for some years, and the solution has usually been to pay the local market rate. It does, of course, result in some anomalies. Presidents of Japanese blue-chip companies are paid only around 10-20 times the salary of the lowest paid worker, whereas at Fortune 500 CEO can earn anywhere from 300-500 times a junior employee’s salary.

So it may turn out that the Japanese president is earning significantly less than the foreign directors reporting to him from the acquired company. Lower down the ranks, more junior Japanese find that when they are posted overseas, they are having to manage locally hired hotshots who are earning salaries and bonuses that add up to the equivalent of an extra zero on the end of a normal Japanese expat salary.

Many Japanese working for foreign banks and consultancies in Japan have also been making 10 times the average salary in Japan. Of course, Japanese on traditional salary packages can comfort themselves with the thought that they have more secure jobs, especially given what has been happening recently. But I think there is a danger in oversimplifying this risk/reward trade-off.

Knowing that you won’t be laid off when times get tough, or conversely that you are being paid handsomely, is not sufficient for most people, Japanese or Western, to feel completely fulfilled and motivated in their work. These factors may ensure people stay in their jobs but not that they perform those jobs to the best of their abilities.

High salaries and bonuses are in some ways proxies for the things that really motivate people to work. Being paid well should indicate that an employee is doing something that has had a major impact on the company. It should also reflect the employee’s authority and responsibility to make an impact. Getting quick raises should show that one’s career is advancing and that one’s skills and capabilities are developing.

These are all drivers of engagement – pride and motivation in work – for people working in Western companies. Surveys show that the drivers of engagement for Japanese people working in Japanese companies are subtly different. Career advancement opportunities and ability to make an impact are important, but so are other factors – immediate personal relationships, having input to department decisions, and having a manager who understands what motivates each employee and who has good relationships with them.

All people, regardless of nationality, want to feel recognized for making a positive difference in the world through their work. For many Japanese, the traditional way to do this has been through becoming a longtime respected member of a major company. For many Westerners, this route does not exist, so impact on society has to be more visibly rewarded through pay or status.

Japanese and Western companies need to avoid two extremes when trying to combine corporate cultures. Paying people well but not giving them the authority to make an impact and advance their careers will eventually lead Westerners to leave a company. Offering lifetime employment but without good, enduring personal relationships and mutual respect may mean that although Japanese employees stay, their morale is low.

This article by Pernille Rudlin originally appeared in the Nikkei Weekly.

This article appears in Pernille Rudlin’s latest book “Shinrai: Japanese Corporate Integrity in a Disintegrating Europe” available as a paperback and Kindle ebook on Amazon.

Category: M&A