Gaijin Go Home! Takeda grobarisation is wrong globalisation

[Taro Toporific]

Shareholders attack Takeda for hiring foreign executives
The Financial Times / June 20, 2014
A push by Japan’s biggest drugmaker to globalise has come under attack by more than 100 former executives and shareholders, casting a cloud over broader efforts by the country’s top companies to internationalise.
In a letter to Takeda Pharmaceutical, 110 former executives and individual investors questioned the company’s appointment of non-Japanese to several senior positions.
“The company’s globalisation is a wrong globalisation. It should be globalised as a Japanese company. However, from the top to the bottom ,there are hundreds of non-Japanese working in the company in Japan,” said Yujiro Hara, a former head of Takeda’s real estate subsidiary who represents the group.
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[Wage Slave]

Yay! Kick out the foreigners, eshew all meaningful change and the golden days of Showa will magically and surely return!

Given how little influence shareholders have anywhere and the fact this group owns all of 2% of the shares it doesn't amount to much. As long as Takeda performs well financially they will have to put up and shut up.

[yanpa]

[quote="A Pink Newspaper"]"The company’s globalisation is a wrong globalisation. It should be globalised as a Japanese company."/quote]

Japanese companies should globalise in Japan! Only Japanese people can understand the true spirit of 国内グローバル化!

[Yokohammer]

Japanese companies should globalise in Japan! Only Japanese people can understand the true spirit of 国内グローバル化!

Ooh ... a glimmer of genius there.

But maybe it can be even better expressed as 島内グローバル化.

[Samurai_Jerk]

An argument that Takeda was hiring less talented foreigners just for the sake of internationalization while overlooking more talented locals might have some legitimacy. However, the argument as presented in the FT article is stupid even by Japanese corporate standards.

[Coligny]

... less talented foreigners ... (...) ... overlooking more talented locals...

In a mom and pop shop, maybe...

In a company this size... The question is more which percentage of the workforce you can slaughter without even affecting daily operation. Then which percentage would require a reorganization...

Starting with their commercial teams... everytime I see them at the hospital it's no less than 3 people usually with their own office lady for tea and cookies...

[Samurai_Jerk]

... less talented foreigners ... (...) ... overlooking more talented locals...

In a mom and pop shop, maybe...

In a company this size...

Please tell us as a foreigner what talents to you have that no Japanese can beat? I doubt being a ヒモ would qualify since there are plenty of J-dudes who've mastered that.

[Coligny]

Sorry, mah bad, I was thinking talent as in corporate usefulness, with Nissan rescue by the Renault group in mind.
Not like Japanese talent dog and pony show...

[Samurai_Jerk]

Sorry, mah bad, I was thinking talent as in corporate usefulness, with Nissan rescue by the Renault group in mind.
Not like Japanese talent dog and pony show...

Nice dodge.

I was thinking more along the lines of if Takeda weren't able to attract decent talent from overseas for whatever reason, they hired clowns in an internationalization for internationalization's sake attempt which led to mismanagement and shares taking a beating in the market. Even if Japanese corporate-types are on average shit, that doesn't mean they aren't even bigger asshats to be found among the barbarians. Anyway, that's just a theoretical discussion as that doesn't seem to be the case here.

[matsuki]

An argument that Takeda was hiring less talented foreigners just for the sake of internationalization while overlooking more talented locals might have some legitimacy.

If that's the case, yeah....but considering all the hurdles they need to jump through to do so, you'd think they'd hire FG who are as qualified as possible. (unless it's for really underpaid, sa-bisu zangyo, slave type shit...then they'd be lucky to find a non Jap qualified to take that....and stay the course)

[Wage Slave]

Is it about raw talent or is it more about the fact that if the company is 100% Japanese it risks becoming dangerously out of touch with the rest of the world. If the rest of the world is a big chunk of your market and a big chunk of your manufacturing and a big chunk of the R&D that matters in your industry then insisting on being 100% Japanese would seem a very limiting strategy.

To my inexpert eyes the two biggest problems some major Japanese companies have are:

1. Being out of touch with developments and consumer demand elsewhere - often these same developments reach these shores leaving Japanese companies scrambling to catch up in Japan, never mind out in the world.

2. A dated corporate culture that is relatively inefficient in terms of staff count and one that stifles innovation and initiative.

[matsuki]

Is it about raw talent or is it more about the fact that if the company is 100% Japanese it risks becoming dangerously out of touch with the rest of the world. If the rest of the world is a big chunk of your market and a big chunk of your manufacturing and a big chunk of the R&D that matters in your industry then insisting on being 100% Japanese would seem a very limiting strategy.

Very good point...but the problem is the average Suzuki or Tanaka can't seem wrap their head around this. (though I'm sure if you told them FG company can benefit from a Japanese employee or two, they'd agree )

To my inexpert eyes the two biggest problems some major Japanese companies have are:

1. Being out of touch with developments and consumer demand elsewhere - often these same developments reach these shores leaving Japanese companies scrambling to catch up in Japan, never mind out in the world.

2. A dated corporate culture that is relatively inefficient in terms of staff count and one that stifles innovation and initiative.

THIS x 99999999999999

[IparryU]

Shareholders attack Takeda for hiring foreign executives
The Financial Times / June 20, 2014
A push by Japan’s biggest drugmaker to globalise has come under attack by more than 100 former executives and shareholders, casting a cloud over broader efforts by the country’s top companies to internationalise.
In a letter to Takeda Pharmaceutical, 110 former executives and individual investors questioned the company’s appointment of non-Japanese to several senior positions.
“The company’s globalisation is a wrong globalisation. It should be globalised as a Japanese company. However, from the top to the bottom ,there are hundreds of non-Japanese working in the company in Japan,” said Yujiro Hara, a former head of Takeda’s real estate subsidiary who represents the group.
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what really irks me about your post Taro... you put little info then link to site that requires membership...

but on the inside, i know new FG is being well taken care of and he aint goin anywhere... rest info has to be in premium FG lounge.

[wagyl]

The way I read the extract from the article, the claim about the "wrong kind of internationalisation" seems as though it might be directed at the repeated hiring of outsiders to fill management roles, while ignoring the talent (including existing foreigner talent) they already have within the organisation. I have seen this situation first hand (without the nationality element), where a company gets into the habit of hiring from outside, and not allowing experienced and able existing employees to rise up the ranks. This wasteful lack of nurturing very quickly turns into a morale problem. Furthermore, in hiring the sort of people who are happy to change horses midstream for career reasons, they end up with the management ranks full of people who are happy to change horses midstream for career reasons.

[IparryU]

The way I read the extract from the article, the claim about the "wrong kind of internationalisation" seems as though it might be directed at the repeated hiring of outsiders to fill management roles, while ignoring the talent (including existing foreigner talent) they already have within the organisation. I have seen this situation first hand (without the nationality element), where a company gets into the habit of hiring from outside, and not allowing experienced and able existing employees to rise up the ranks. This wasteful lack of nurturing very quickly turns into a morale problem. Furthermore, in hiring the sort of people who are happy to change horses midstream for career reasons, they end up with the management ranks full of people who are happy to change horses midstream for career reasons.

Before the recent FG was added on, they were trying to merge with another Japanese company and let that head take charge. but the party refused as they were pretty international in the way they think and do biz and didn't want to lose their name and become the copy and paste japanese company.

i dont blame them for getting FG on board, much more potential for growth and global profits. no need to put you head up your ass and lower the standard for your company just to hire "your own kind".

[Taro Toporific]

what really irks me about your post Taro... you put little info then link to site that requires membership...

She-e-e-it----Sorry but that link to FT.com site that requires membership is just a sad requirement of "Fair Use" requirements. That is, technically it is quite illegal to post the entire article to FT.com.

Actually, the Great Tentacled One and his minions (like me) are supposed to spank anyone who posts more than 25% of a copyrighted artical on the FG.

[Taro Toporific]

Llike any Japanese company foreigners ruin all the fun. Takeda Pharmaceutical’s management like any good Japanese company spends all their profits in drinking and whoring parties and well as hiring from their alma mater their conies and massive “sales forces” that sell less than their wages. At least foreign management stops all that nonsense.
Notice that "Yujiro Hara, a former head of Takeda’s real estate" is one of those conies who did not provide any value to Takeda since the drug company has no fucking logical reason to have a real estate subsidiary, sheesh.

[Wage Slave]

Llike any Japanese company foreigners ruin all the fun. Takeda Pharmaceutical’s management like any good Japanese company spends all their profits in drinking and whoring parties and well as hiring from their alma mater their conies and massive “sales forces” that sell less than their wages. At least foreign management stops all that nonsense.
Notice that "Yujiro Hara, a former head of Takeda’s real estate" is one of those conies who did not provide any value to Takeda since the drug company has no fucking logical reason to have a real estate subsidiary, sheesh.

Good point. Look at Olympus and all the fun that was spoiled there. Real estate business you say? Skeletons which nosey foreigners might disinter?

[Russell]

Llike any Japanese company foreigners ruin all the fun. Takeda Pharmaceutical’s management like any good Japanese company spends all their profits in drinking and whoring parties ... At least foreign management stops all that nonsense.

Well, maybe they should have hired Greiji...

Greiji, where is Greiji?!?

[Taro Toporific]

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[inflames]

I read about this a few days ago in some other newspaper; the only real difference was that the other article said it was the descendants of the founder who were whining. The article also pointed out that some huge percentage of Takeda's workforce is foreign (they bough some European companies in the mid 2000s).

The ironic thing is that the current managers were doing a bad job at running it. Profits were falling (they were actually less than the dividend) and days of receivables and inventories had both risen substantially. Let another wannabe Panasonic or Sharp CEO come in and manage it - that's the best way.

[Coligny]

Profits were falling (they were actually less than the dividend) and ...

Is that even possible or legal ?
(I do sux at capitalism, but still trying to catch up)

[IparryU]

what really irks me about your post Taro... you put little info then link to site that requires membership...

She-e-e-it----Sorry but that link to FT.com site that requires membership is just a sad requirement of "Fair Use" requirements. That is, technically it is quite illegal to post the entire article to FT.com.

Actually, the Great Tentacled One and his minions (like me) are supposed to spank anyone who posts more than 25% of a copyrighted artical on the FG.

Ohhh spankings... With our without the whips?

[wagyl]

Profits were falling (they were actually less than the dividend) and ...

Is that even possible or legal ?
(I do sux at capitalism, but still trying to catch up)

Potentially there were cash reserves from previous years. I know absolutely nothing about the specifics here though.

[Russell]

Profits were falling (they were actually less than the dividend) and ...

Is that even possible or legal ?
(I do sux at capitalism, but still trying to catch up)

Potentially there were cash reserves from previous years. I know absolutely nothing about the specifics here though.

Or did they take out a loan?

[wagyl]

Profits were falling (they were actually less than the dividend) and ...

Is that even possible or legal ?
(I do sux at capitalism, but still trying to catch up)

Potentially there were cash reserves from previous years. I know absolutely nothing about the specifics here though.

Or did they take out a loan?

Who do you think they are, Apple or something?

But seriously yeah, this might happen to maintain a level of dividend like the shareholders expect, to keep share price more stable. If it is any more than an interim measure this will not keep price stable though. There is a tendency within certain management styles to let the tail wag the dog, and to force results and dividends to meet expectations in relation to share prices, rather than allowing share prices to meet expectations in relation to results and dividends.

[Coligny]

, i can guess they didn't print the money themselves.

But traditionnally, selling company assets (land, IP, share) register as profit. While uing bank accounts from previous years of activity sounds borderline on firesale.

[Wage Slave]

It sounds more and more that the real reason the foreigners are not welcome is that they don't understand the need for utmost discretion via Japanese style accounting when it comes to hiding massive holes in the balance sheet. The fact that the prime mover was running the real estate operation makes me even more suspicious. Losing a huge amount of money via real estate was incredibly easy here back in the day and it is quite possible losses have been covered up ever since - Just like Olympus. And just like Olympus, along comes a foreigner who just doesn't understand and boom - everybody's day ruined. Pure speculation of course, but I wouldn't be that surprised.

[wagyl]

, i can guess they didn't print the money themselves.

But traditionnally, selling company assets (land, IP, share) register as profit. While uing bank accounts from previous years of activity sounds borderline on firesale.

Yep, you were right, you were napping during Capitalism 101 classes. Profit, in relation to the sale of land, intellectual property or shares, is the amount that the sale price exceeds the original purchase price and the costs involved in maintaining that asset (ignoring getting any deeper into this with depreciation). Not every sale of assets makes a profit.

It is perfectly reasonable for the shareholders to seek that there be a dividend greater than the profits and reduce the bank balance held by the company. This is especially so when the shareholders can do a lot better work investing that cash than the company can in its zero interest Japanese bank accounts, or when the shareholders would like the cash in their hands so that they can reduce some loans they themselves have.

However, I would think it is most likely that the board of directors did not want to reduce the amount of the dividend per share, for fear that the share price would decrease as a result, and the value of their individual shareholding or some other reward for meeting a share price target be decreased accordingly.

So to answer the questions: possible? Yes.
Legal? Dividend payouts exceeding profits is not on its own a reason to think something is illegal.

The question you didn't ask: Is this a sound idea?
The arbiter of that is the stock market over the next few years or so.

[inflames]

Profits were falling (they were actually less than the dividend) and ...

Is that even possible or legal ?
(I do sux at capitalism, but still trying to catch up)

Yep - it is legal in Japan provided your company isn't insolvent (IIRC this is what some people from LTCB, the old Shinsei, went to prison for). Basically the company has "retained profits" (profit from previous years that hasn't been paid as dividends or used to buy back shares) and they use this to pay out the dividends.