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The Olympus Debacle

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by

Ingkar Ospanbek

on 12 December 2013

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Transcript of The Olympus Debacle

Differences between
Japanese and British leadership styles
The styles
Paternalistic leadership:
work-centered
Keiretsu system (headless combine)
Gyrus Group of Britain
$ 1.9 billion
Effects of Japanese culture
on corporate management style
Collectivism
One of the biggest and long-running
lost hiding arrangement scandal in Japan
The Olympus Debacle

Outline
Effects of Japanese culture on corporate management style
Differences between Japanese and British leadership styles
Effects of corporate governance composition
How Woodford and Kikukawa could have acted differently
After the scandal
Bushido spirit
Number of organisations link together
Cross-shareholdings
Business based on relationships
Government support
Consensus driven
Western Leadership Style clashes with Japanese corporate leadership style
$ 687 million
36%
Keiretsu system
Militarism
Government supported
Employee loyalty
Life-time employment system
Rife with cronyism
Seniority-based advancement
Senior system
Strict divided system of social bracket
Do not question
the big boss
The Golden mean
Consensus driven
Implicit leadership style
Shintoism
Hiring western managers
Close-door policy
of exclusion
Against blunt
management style
Internal control
highly hierarchical
limited
leaders require respect and obedience from subordinates
leaders prefer not to take risk
democratic
risk-takers
Way of thinking
- Based on collectivism:
cronyism, family,
relationship and etc.
- Based on individualism:
more direct
Participative leadership:
work-centered and people-entered
Leadership style
- Focuses on improving
the work-process: harmony
- Focuses on the result
Aim:
to defuse adversarial relationship between buyer and supplier

Criticism:

strong preference to do business with someone in the "family"

absence of oversight and shareholder activism
"When the main business is struggling, we need to earn money through "zaitech"

Toshiro Shimoyama
Olympus president 1984-1993
Effects of corporate governance composition
High number of board members (old boys club)
Strict legality vs. responsibility to one's family
Avoiding trouble
Mindset of personalizing the company
Dismissal
How Woodford and Kikukawa
could have acted differently
In general
old-school business practices (Kikukawa)
modern management practices (Woodford)
Woodford restructured European operations
Woodford:
should have been better informed

"nemawashi"

should have had a conversation

has a blunt style
Kikukawa:
should have not ousted Woodford

should have had a conversation

aware of cultural differences
After the Olympus Scandal
What happened with Woodford
Old management board
New management board
Kimoto: New CEO
Sasa: New president
New legislation
The problems are still the same!
Any questions?
References


Business, B.N., 2013. BBC New Business. [Online] Available at: http://www.bbc.co.uk/news/business-23156879 [Accessed 4 December 2013].

Davidoff, S.M., 2011. The New York Times. [Online] Available at: http://dealbook.nytimes.com/2011/11/01/olympus-scandal-reveals-how-little- has-changed-in-japan/?_r=1 [Accessed 4 December 2013].

Deresky, H., 2013. International Management: Managing Across Borders and Cultures. London.

Economist, T., 2011. The Economist. [Online] Available at: http://www.economist.com/blogs/schumpeter/2011/12/olympus-scandal-0 [Accessed 4 December 2013].

Hong, J.C., 2013. Japan reflects on militarism. China Daily, pp.57-68.

Kopp, R., 2010. Japaninterculture. [Online] Available at: http://www.japanintercultural.com/en/blogs/default.aspx?blogid=90 [Accessed 4 December 2013].

Tabuchi, H., 2011. The New York Times. [Online] Available at: http://www.nytimes.com/2011/11/10/business/global/corporate-japan- rocked-by-scandal-at- olympus.html?adxnnl=1&pagewanted=all&adxnnlx=1384992748- moUyhYnSZxGjkFB+t8QlPw [Accessed 4 December 2013].

Westlake, A., 2012. JDP - Japan Daily Press. [Online] Available at: http://japandailypress.com/despite-vocal-disapproval-olympus-board- nominees-voted-in-231170/ [Accessed 4 December 2013].

Xun, J.B., 1999. Bushido spirit-Thinking about Japanese culture. Journal of Peking University, 4, pp.36-37.
References


Business, B.N., 2013. BBC New Business. [Online] Available at: http://www.bbc.co.uk/news/business-23156879 [Accessed 4 December 2013].

Davidoff, S.M., 2011. The New York Times. [Online] Available at: http://dealbook.nytimes.com/2011/11/01/olympus-scandal-reveals-how-little- has-changed-in-japan/?_r=1 [Accessed 4 December 2013].

Deresky, H., 2013. International Management: Managing Across Borders and Cultures. London.

Economist, T., 2011. The Economist. [Online] Available at: http://www.economist.com/blogs/schumpeter/2011/12/olympus-scandal-0 [Accessed 4 December 2013].

Hong, J.C., 2013. Japan reflects on militarism. China Daily, pp.57-68.

Kopp, R., 2010. Japaninterculture. [Online] Available at: http://www.japanintercultural.com/en/blogs/default.aspx?blogid=90 [Accessed 4 December 2013].

Tabuchi, H., 2011. The New York Times. [Online] Available at: http://www.nytimes.com/2011/11/10/business/global/corporate-japan- rocked-by-scandal-at- olympus.html?adxnnl=1&pagewanted=all&adxnnlx=1384992748- moUyhYnSZxGjkFB+t8QlPw [Accessed 4 December 2013].

Westlake, A., 2012. JDP - Japan Daily Press. [Online] Available at: http://japandailypress.com/despite-vocal-disapproval-olympus-board- nominees-voted-in-231170/ [Accessed 4 December 2013].

Xun, J.B., 1999. Bushido spirit-Thinking about Japanese culture. Journal of Peking University, 4, pp.36-37.

do not question the big boss
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