Cases on International Business and Finance in Japanese Corporations

Contents

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pp. vii-x

Preface

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pp. xi-xiii

Japan is a country that is extremely difficult for outsiders to understand. Language plays the most basic barrier to understanding the culture: the only language used to communicate among inhabitants is Japanese; English is used to a limited degree for education and in daily life. Moreover, Japanese people are extremely cautious in disclosing their thoughts to outsiders. The basis...

Acknowledgements

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pp. xv-

About the Author

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pp. xvii-

Introduction

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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...

1 - Tokyo Disneyland: Licensing versus Joint Venture

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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...

2 - Tokyo Disneyland and the Disney Sea Park: Corporate Governance and Differences in Capital Budgeting Concepts and Methods between American and Japanese Companies

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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...

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

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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, vicepresident 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...

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

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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...

5 - Hostile Takeover Battle in Japan: Fuji TV versus Livedoor for NBS

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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...

6 - Livedoor: The Rise and Fall of a Market Maverick

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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...

7 - Nireco Japan: Introduction of the Poison Pill

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pp. 99-117

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,...

8 - Ina Food Industry: A New Management Philosophy for Japanese Businesses

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pp. 119-131

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...

9 - OSG Corporation: Hedging Transaction Exposure

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pp. 133-149

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...

10 - Bank of Japan’s Meeting in March 2006: An End to the Quantitative Easing Policy?

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pp. 151-167

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....

Index

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pp. 169-174