JSP156 / LS173 Japanese Business Management & Labor Strategic Issues in Doing Business in Japan THE JAPANESE BUSINESS ENVIRONMENT
REAL ESTATE COSTS IN JAPAN Some figures: Ginza: US$23,000 per square foot! Chiyoda-ku: US$81,165 per square foot!! Tokyo alone is more expensive than all of the United States! At one point, Japan was 4X more expensive than the U.S.!
REAL ESTATE COSTS IN JAPAN
URBAN LAND PRICE INDEX
REAL ESTATE & SHARE PRICES
MULTI-LAYER DISTRIBUTION & REGIONAL DIFFERENCES CONBINI POS TERMINALS SEASONAL PRODUCT LINES LONG STORE HOURS CONVENIENT PAYMENT OF BILLS D.M.: MAIL ORDER BUSINESS Y 2,200,000,000,000 INDUSTRY: CLOTHING (40%) FURNITURE, APPLIANCES, OTHER HOUSEHOLD (16%) PERSONAL GOODS & SERVICES (44%) REGIONAL DIFFERENCES
LEGAL SYSTEM Less than 11,000 lawyers in Japan (vs. >500,000 lawyers in US) Government of Japan is the largest “law firm” in the world Product liability: 15 yr. period: 130 suits (vs. 13,595 suits in the U.S. in one year) must prove intent Koban (“police box”) system Organized crime (83,600 boryokudan members) 6,300 extortion companies ( sokaiya ) CountryHomicidesThefts JAPAN1.2 / 100,0001,414 / yr. GERMANY3.5 / 100,0004,051 / yr. U.S.A.6.3 / 100,0004,049 / yr.
YAKUZA
ENVIRONMENTAL ISSUES TOXIC PLUTONIUM O-BENTO & O-HASHI SODAI GOMI (DEBRIS) NAGASAKI DOLPHINS
JAPANESE CONGLOMERATES BANK OF JAPAN BANK
ZAIBATSU MITSUBISHI YASUDA Dissolved by 1947 Anti-Monopoly Law (AML) of the Supreme Commander of the Allied Powers (SCAP) after WWII
KEIRETSU 1952 Laws towards keiretsification of the economy: Kyodo koi (cooperative behavior): cartels among businesses Law against using old clan names abolished Old Three groups re-formed: Mitsui, Mitsubishi, Sumitomo New Three groups formed: Fuyo, Sanwa, Dai-Ichi Kangyo Banks allowed to own stocks in client companies (against AML) Import restrictions & foreign capital restrictions protected cos.
KEIRETSU “link”, “affiliate with”, “connect to” Definition: A keiretsu is a group of individual entities viewed together, usually as a hierarchical organization, involving a flow of goods and services either upwards or downwards in the hierarchy Types: Horizonta l: Bank-based Vertical: Manufacturing, Distribution Characteristics: Maintain control and overall management through equity cross- holdings/directorships, financing, joint investments and projects Diversified but successful in a few principal areas Not for profit but for stability of its members
COMPARING SYSTEMS
HORIZONTAL KEIRETSU
INTRA- KEIRETSU TRANSACTIONS
MITSUI
MITSUBISHI
BOT-MITSUBISHI
SUMITOMO
SANWA
DKB
RELATIONSHIPS AMONG KEIRETSU
Sakura Bank 1999 Chuo Trust Mitsui Trust Dai-Ichi Kangyo Bank Fuji Bank Industrial Bank of Japan Mizuho Trust Sumitomo Bank Bank of Tokyo-Mitsubishi Mitsubishi Trust Nippon Trust Sanwa Bank Tokai Bank Toyo Trust Tokai Trust Tokyo Trust Asahi Bank Asahi Trust Daiwa Bank
Mizuho Holdings Sumitomo Mitsui Banking Group Dai-Ichi Kangyo Bank Fuji Bank Industrial Bank of Japan Mizuho Trust 2001 Daiwa Bank Holdings Daiwa Bank Kinki Osaka Bank Nara Bank Mitsubishi Tokyo Financial Group Bank of Tokyo- Mitsubishi Mitsubishi Trust Nippon Trust Tokyo Trust UFJ Holdings Sanwa Bank Tokai Bank Toyo Trust Tokai Trust Chuo Mitsui Trust Sakura Trust
Mizuho Holdings Sumitomo Mitsui Financial Group Sumitomo Mitsui Banking Corporation Mizuho Bank Mizuho Corporate Bank Mizuho Trust 2002 Mitsui Trust Holdings Resona Holdings Daiwa Bank Asahi Bank Kinki Osaka Bank Nara Bank DaiwaTrust Chuo Mitsui Trust Mitsui Asset Trust Mitsubishi Tokyo Financial Group Bank of Tokyo- Mitsubishi Mitsubishi Trust UFJ Holdings UFJ Bank UFJ Trust
NEW KEIRETSU (FROM 2002)
NEW KEIRETSU (FROM 2008)
Mizuho Financial Group Mitsubishi UFJ Financial Group Sumitomo Mitsui Financial Group Sumitomo Mitsui Banking Corporation Bank of Tokyo-Mitsubishi UFJ Mitsubishi UFJ Trust Mizuho Bank Mizuho Corporate Bank Mizuho Trust 2011 Chuo Mitsui Trust Holdings Resona Holdings Resona Bank Saitama Resona Bank Kinki Osaka Bank (Nara Bank) (Resona Trust) Chuo Mitsui Trust Chuo Mitsui Asset Trust
NEW KEIRETSU
VERTICAL KEIRETSU
TOYOTA