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Web-only Exclusives
November 30, 2000

From Our Correspondent: Hirohito and the War
A conversation with biographer Herbert Bix

From Our Correspondent: A Rough Road Ahead
Bad news for the Philippines - and some others

From Our Correspondent: Making Enemies
Indonesia needs friends. So why is it picking fights?

Asiaweek Time Asia Now Asiaweek story

A Different Style Emerges

This group is not tied to the way things were


KNOW THIS WHEN EVALUATING June 27 as a key date in Japanese corporate history: the rockier and more chaotic it turns out to be for companies that hold annual meetings that day, the better. It is, after all, the date a revolution in Japanese corporate management can be said to have officially begun. More than 1,400 companies, some 95% of the top division of the Tokyo Stock Exchange, are holding their annual meetings that day. About 160 of them expect to have new presidents approved.

Pay special attention to the Dai-Ichi Kangyo Bank (DKB) annual meeting. It would not be impolite to wish the DKB president-appointee Sugita Katsuyuki a hearty "all-the-worst" before the meeting. A contentious gathering would be a clear signal that no Japanese gangsters, or sokaiya, had been illegally paid off so they wouldn't disrupt the meeting.

Sugita, 54, insists that the days of paying for quiet annual meetings are over. He says he'll cut ties with the gangsters "even at the cost of my life." And to add to the drama, he has the Herculean task of remaking Japan's fourth largest bank and recapturing the trust and loyalty of shareholders, employees and customers.

Obviously, the changes in store for Japanese managers are serious. When Nomura's new president, Ujiie Junichi, 51, took office he made an unusual statement to every one of the 12 incoming executive managing directors. "Your term is two years, and if your performance shows that you are not fit for the post, you are to leave after your term. OK?" The message was clear: a two-year term is stipulated by law, but after that performance will be the key. Ujiie faces the double whammy of boosting performance while counteracting bad publicity from the company's most recent troubles. It is accused of paying gangsters more than $400,000 to, among other things, keep annual meetings quiet.

Nomura boasted a 14% share of Japan's straight bond business in 1996. But in April and May, this market share plummetted to 3.7%. Nomura has now been rocked by two major scandals in less than a decade. Enter Ujiie, who comes to the challenge from an unusual perspective. Usually, Japanese companies emphasize domestic sales experience as the way to get ahead. Ujiie earned two advanced degrees in the U.S., including a doctorate from the University of Chicago, before joining Nomura. There followed a string of successful overseas assignments. "I will change Nomura with all my courage and faith," says Ujiie. "I will make it a company that will fit perfectly to the ethics codes and norms."

Even companies not in trouble with the law are revamping management. Sony president Idei Nobuyuki and Toyota CEO Okuda Hiroshi, both world-savvy, outspoken leaders are at the vanguard of Japan's corporate change. Goto Takuya, incoming president at Kao Corp., a leading household products maker, is another of the new breed. Until weeks ago, he was a junior executive at the corner of the table of board meetings. Similar appointments of less senior executives are happening at Hino Motors, a truck manufacturer, Toray Industries, and Yamato Transport.

Japan's leading toy maker, Bandai, recently replaced its president, the son of the company's founder, with Mogi Takashi, who had been president of the company's software arm. Mogi, 63, joined Bandai when he was 39. Over the years, he gained a reputation as a cool performer. In fact, his remark soon after his appointment that he wasn't ready to speak about such things as his "corporate vision" suggests he will not be rushed. Undoubtedly, he'll need all his patience. Mogi is the first outsider to run what was once a family business. But the family still holds the outsider's fate: Yamashina Makota, the former president, is becoming chairman and will influence how much authority Mogi has.

Still, new managers are attempting to inject ideas and life into an economy that, at least in this decade, has been sorely in need of both. To be sure, much of the unique style of Japanese management ought to be and will be preserved. But, at least for now, unusual sounds of dissent in annual meetings may be music to the ears of executives who think it's time for a change.

By Tim Healy and Murakami Mutsuko / Tokyo

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