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Have Japanese Firms Changed? pp 218–246Cite as

Palgrave Macmillan

Changing Ownership and Governance Innovation

Japanese Enterprises in Transition

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Abstract

The corporate governance practices of large Japanese enterprises were a focus of controversy during and after the rapid rise of these enterprises to international prominence in the 1980s. The perception of Japanese governance mechanisms at that time stands out as the antipodal opposite of the current thrust for the ‘global’ standards. The popular view at the height of Japan’s economic power was that top executives in Japan, with no distracting interventions from pesky shareholders, exercised their discretion to target long-term efficiency-enhancing goals, to the profit of employees, shareholders, and other stakeholders. According to this view, the agency costs of managerial autonomy should be adequately compensated by the knowledge capital accumulated in and utilized by salaried management. In the US, on the other hand — according to the conventional view at the time — shareholders pressured salaried managers to maximize short-term returns at the expense of their firms’ economic health, thus ultimately harming the competitiveness of US industry in the 1980s.

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Authors
  1. Asli M. Colpan
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  2. Takashi Hikino
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  3. Toru Yoshikawa
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Editor information

Editors and Affiliations

  1. Graduate School of Policy and Management, Doshisha University, Japan

    Hiroaki Miyoshi (Professor) & Yoshifumi Nakata (Professor) (Professor) &  (Professor)

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© 2010 Asli M. Colpan, Takashi Hikino, and Toru Yoshikawa

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Colpan, A.M., Hikino, T., Yoshikawa, T. (2010). Changing Ownership and Governance Innovation. In: Miyoshi, H., Nakata, Y. (eds) Have Japanese Firms Changed?. Palgrave Macmillan Asian Business Series Centre for the Study of Emerging Market Series. Palgrave Macmillan, London. https://doi.org/10.1057/9780230294905_10

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