Thursday, October 12, 2006

Dual Social Responsibility System in Japan?

In his book "Japan Remodeled, How Government and Industry are Reforming Japanese Capitalism", Steven K. Vogel profiled several corporate case studies to illustrate that there is no lack of Japanese firms which are keen to challenge the country's established corporate norms.

Such as Shinsei Bank whose corporate policies were said to have "infuriated government officials, unnerved its own employees, and alienated many potential business partners." Among other things, the Bank refused to roll over credit to some of its most troubled borrowers. In June 2000, it pulled out of a "debt-forgiveness scheme" to rescue Sogo, hence contributing to the subsequent failure of the major departmental store.

Another company cited was telecommunications newcomer Hikari Tsushin which developed a business model that relied on speedy decisions, hard work, and generous rewards for performance, and not on long-term relationships with banks and other business partners. As the firm pointed out, "we are unique, we are the anti-system firm!"

While such dare-to-be-different Japanese firms exist, it also seems that the authorities sometimes stymie their efforts, by citing the importance of “social responsibility.” For instance, Shinsei Bank was ordered to keep lending to certain clients, since the Bank had the "obligation" to play a public interest role.

Hence, I wonder if it is possible for Japan to devise a dual social responsibility system, meaning that older and more established companies are compelled to play by the old rules, while newer and unconventional firms, particularly those from emerging industries, be allowed to be the mavericks that they truly are.

Of course this might throw up the question of fairness and double standards, but might it not be something worth considering? If so, why would it work? And if not, why not?

0 Comments:

Post a Comment

<< Home