nomura securities international a subsidiary of the nomura securities, one of the world's...
TRANSCRIPT
Nomura Securities International
A subsidiary of the Nomura Securities, one of the world's largest brokerage firms and, in the United States, has total capital exceeding $1 billion and a balance sheet exceeding $30 billion
A U.S. registered broker/dealer and a primary dealer in U.S. Treasury securities, operating from offices in New York (headquarters), Chicago, Los Angeles, Brazil, Japan and Hong Kong.
Along with its affiliates, employs over 1,200 people throughout America.
Introduction
This case is about how a Japanese firm encountered difficulties in the United States concerning its management and ultimately, its performance.
It highlights the cultural and personality differences between the Japanese and the Americans.
Introduction
One of the examples we will be dealing with is the conflict of interest between Mr. George Rosebush (an American sales trader) and Mr. Yamaguchi (the manager) and their strained relationship.
This resulted in disagreements and conflicts between the top management and its employees.
Formal Organization
Definition
The rational coordination of the activities of a number of people for the achievement of some common explicit purpose or goal, through division of labour and function, and through a hierarchy of authority and responsibility.
The Hierarchy of Authority
Parent Company (NSC Ltd)Parent Company (NSC Ltd)Parent Company (NSC Ltd)Parent Company (NSC Ltd)
Subsidiary (NSI) in U.S.Subsidiary (NSI) in U.S.Subsidiary (NSI) in U.S.Subsidiary (NSI) in U.S.
Department Managers(Mike)Department Managers(Mike)Department Managers(Mike)Department Managers(Mike)
JapaneseJapanese PersonnelPersonnelJapaneseJapanese
PersonnelPersonnel
SubordinatesSubordinates(George & Francois)(George & Francois)
SubordinatesSubordinates(George & Francois)(George & Francois)
Formal Organization
As they move down the hierarchy ladder, their power and authority to make decisions decreases.
George has to take orders from Mike and Mr. Yamaguchi.
E.g.
Hierarchy of Authority
Formal Organization
Focused on high quality research and development of worldwide financial network.
Intend to rely on talented local professionals (American) to further market expansions.
Enhance its domestic image and international image.
Goals
Formal Organization
Allow borrowers to tap into Japan’s vast pool of potential investors.
Planned to serve clients from New York and compete directly.
Increase its activities in the U.S. Securities market.
Internal harmony
Formal Organization
Higher Authority – makes all the decisions and planning
The jobs that subordinates hold are very specialized.
Lower Authority (subordinates) – merely carry out the orders delegated to them
Division of Labour
E.g. The salesman concentrates on developing investment strategies. The sales trader is responsible for executing these strategies.
Human Organization
Definition
It is the emergent role sets of managers and employees. It is more or less about how the company actually operates instead of how it is supposed to. It answers the question of how managers and employees make the formal organization work.
Human Organization
All top management were Japanese, the Americans remained subordinate to them.
Those who made the really important policy decisions were the senior managers, many of whom were not in the U.S. but in faraway Tokyo.
The top management had little experience and little knowledge about American market’s operation and function yet they made most of the decisions
Human Organization
The Japanese management remained conservative and unwilling to take risks.
They were reluctant to delegate to traders the authority to commit the firm’s capital.
There was also a lack of trust between the Japanese and Americans.
The management wanted to discuss all matters and only after much deliberation would a consensus be reached.
Human Organization
This resulted in slow response time to the customers in the US securities market.
The analysts of the company,being stationed in Tokyo, and the information they were supposed to provide weren’t readily accessible to the traders in the U.S.
The division of labor within the management proved to be a disadvantage.
Human Organization
There was a lack of communication between the salesmen and the traders, thus rendering the traders ineffective in serving their clients.
The company’s initial plan of employing Americans to strengthen their client relationships did not work out in the end.
Duplicate orders were sometimes passed on to the Tokyo office.
Human OrganizationThere was no internal ‘harmony’ within the company because the Japanese isolated the Americans, not giving them access to information that was in Japanese.
Their experience with the U.S. market was of no use since the had no authority, no responsibilities in the company and their valuable suggestions were often rejected.
The language barrier between the Americans and the Japanese made it difficult for them to work together.
To begin with, they only employed two American traders.
In what way is it influenced by Japanese and/or American
Culture?
Ways in which it was affected by Japanese Culture
George’s interview with the top management showed that the Japanese conducted the interview according to their own culture, disregarding the American norms etc.
Asking questions regarding his personal life and having conversations in Japanese in from of George
E.g.
Ways in which it was affected by Japanese Culture
The decisions merely emerged from the system, and the company was not receptive to new ideas.
The company did not dare to take risks, more conservative, more geared towards high savings.
When George and Francois came up with a proposal to stimulate client interest, they were turned down.
E.g.
E.g. Their reluctance to commit too much capital and their immediate severed cost cutting measures
Ways in which it was affected by Japanese Culture
The Japanese kept to themselves, did not socialize with the Americans. This caused a lack of internal ‘harmony’ which is very important to the running of the company.
Many of the information, events etc. were announced in Japanese, thus leading to a breakdown in communication. They refused to converse in English despite the fact that they were operating in an English-speaking country and that they had staff whom did not understand Japanese.
Ways in which it was affected by Japanese Culture
It is Japanese culture that new hires often spend their first year or two and the job in low-level positions. Despite the fact that George and Francois were more than ready to take on more responsibility, the management insisted that they continue to answer the telephones and relay information to the trading desk. Therefore, they promoted their employees based on seniority rather than their competence.
Ways in which it was affected by American Culture
Some of the staff there had adjusted to American culture.
There was a part of the interview which was geared more towards American business culture. Specific job duties and the requisite skills were discussed.
Mike’s name.E.g.
Conclusion about which culture influence the company more
It was very much Japanese culture that dominated the operations of the company. Their customs, and language very used in the U.S. company
Cultural Background of Mr. Rosebush
American
First time working in a Japanese firm
Previous work experience includes selling Individual Retirement Accounts and tax-sheltered annuities in the New England area.
Cultural Background of Mr. Yamaguchi
Japanese
No familiarity with American business .
Used to be a bond trader in Nomura’s Hong Kong office for seven years.
Does not know the accepted cultural practices and norms of the Americans.
Personality of Mr. Rosebush
DOMINANTLY TYPE A
Impatient with the rate at which most things happen
George was initially instructed to sit down with the traders in the American equities department, but after a few weeks he wanted to start trading on his own, wanted to assume more responsibilities.
E.g.
Personality of Mr. Rosebush
Obsessed with measuring success with what one acquires
Strives to think or do more things simultaneously
Was restless when most of his days were spent answering the telephones and relaying information to the trading desk.
Was a sales trader for Japanese common stocks as well as a market maker for ADRs.
E.g.
E.g.
Personality of Mr. Rosebush
Cannot cope with leisure time
He did not like the fact that he was spending his time doing crossword puzzles and this lowered his morale.
E.g.
Personality of Mr. Rosebush
George requested several times if meetings could be held in English
INTERNAL (people who believe that they control their destiny)
E.g.
=> this shows that he makes an attempt to control his environment.
Personality of Mr. Rosebush
NEED FOR AFFILIATION (the extent to which people want to build interpersonal relationships and being liked) E.g.
Has developed strong interpersonal skills in his previous jobs
Built good working relationships with the other major market makers of Japanese ADRs.
Personality of Mr. Rosebush
OPENNESS TO EXPERIENCE (extent to which people are original, with broad interests, are willing to take risks)E.g.
creative => would come up with proposals that would stimulate clients interest
take risks => willing to work in a foreign firm especially one from such a different culture
Personality of Mr. RosebushHIGH CONSCIENTIOUSNESS (refers to the number of goals on which a person focuses ; tends to be responsible, dependable and achievement oriented.
E.g. responsible and dependable => George does his job well when work is assigned to him.
OUTSPOKEN
E.g. George confronted Mr. Yamaguchi when Mr. Yamaguchi failed to recognize the need for foreign nationals to respect the language and customs of their host country.
Personality of Mr. YamaguchiLOW SELF-MONITOR (consistent across situations as they are not vigilant to situational cues and act from internal states)
Mr. Yamaguchi knew that George and Francois could not understand Japanese, yet he announced the venue of the meetings in Japanese.
E.g.
Personality of Mr. YamaguchiLOW OPENNESS TO EXPERIENCE (people are more conventional and find comfort in the familiar)
He is inflexible as he calls meetings in Japanese. Not only that, he insisted on George speaking to Mr. Honda even though they had problems in communications.
E.g.
Personality of Mr. Yamaguchi
AUTHORITATIVE
He wants things to be done his way.
E.g.
E.g.
INCONSIDERATE
He got angry and demanded an explanation when George and Francois failed to turn up for meetings, knowing that they could not understand Japanese.
Personality of Mr. Yamaguchi
HIGH NEED FOR POWER (Indexes the desire to control or influence others)
E.g.
He wants things to be done his way. He insisted on George speaking to Mr. Honda personally.
What aspects of their behavior towards each other are cultural?
What aspects are due to individual personality?
Situation 1: Announcement of location of meetings in Japanese CULTURAL
=> Use of Japanese language when announcing location of meetings. (language barrier)
=> Shows that the Japanese on the whole regard their national language with pride
PERSONALITY
=> portrays Mr. Yamaguchi’s low self-monitor and low openness to experience.
Situation 2: Insistence of talking to Mr. Honda personally
CULTURAL
=> Japanese follow a certain code of conduct, follows the chain of command on receiving and giving orders, thus, subordinates are expected to carry them out closely.
PERSONALITY
=> Portrays Mr. Yamaguchi’s high need for power and low openness to experience.
=> The above holds regardless of whether the orders are effective or not.
Situation 3:Wanting George to understand people who speak English with an Asian accent.
CULTURAL
=>Differences in business methods.
=> George feels that it is important to recognize the need for foreign nationals to respect the language and customs of their host country.
=> Japanese, on the whole are polite. They respect their superiors and are sensitive to their needs. Thus Mr. Yamaguchi wanted George to overcome his ability to understand people who speak with a foreign accent.
Situation 3:Wanting George to understand people who speak English with an Asian accent.
PERSONALITY
=> is too proud to back down, admit his mistake and listen to his subordinate’s suggestion instead.
=>portrays Mr. Yamaguchi’s high need for power.
=>wants things to be done his way
=>portrays Mr. Yamaguchi’s low openness to experience.
Situation 4: The Confrontation
CULTURAL
=> Cultural shock to Mr. Yamaguchi (in Japanese culture, the Japanese are more subdued and they respect people of superior authority) Confrontation in front of others is shown as clear defiance.
=> In American culture, people speak what they feel is right, thus George felt that he should voice out his opinion.
Situation 4: The Confrontation
=> George was seen as being rude to his superiors.
PERSONALITY
=>portrays George’s internal side (voice out his opinions in an attempt to control his environment)
Options for Mr. Rosebush to deal with the situation
Stay at NSI and continue to develop new plans to improve business in the company
Gather people to voice out options to the top management to make NSI a more conducive environment for the American Personnel to work in.
Options for Mr. Rosebush to deal with the situation
Learn how to speak Japanese to close up the cultural gap between him and his fellow colleagues and superiors.
Explain to the headquarters the problems he and his fellow Americans face.
Explain to Mr. Yamaguchi the problems they are facing and find a solution to reach agreement.
Options for Mr. Rosebush to deal with the situation
Quit NSI, he can either
enroll in a leading business school to pursue his MBA
or, choose to work in another firm with similar ideals and values as him. He would have gained experience in NSI and thus, would be marketable to other firms in US seeking to enter this area of the securities business.
Options for Mr. Yamaguchi to deal with the situation
Discuss with his department (esp. George and Francois) the problems and try to figure out the root / cause and remedies.
To go against the Japanese conventions and delegate authority to George and his subordinates.
Report the problems to the Headquarters and request assistance / recommendations.
Options for Mr. Yamaguchi to deal with the the situation
Learn to speak English and use it as a tool for communication in meetings and discussions etc, for the convenience of George and the other Americans.
Request for a transfer back to Hong Kong, as he is unfamiliar with the working style in the US.
Fire George.
If I am Mr. Rosebush
Apologize to Mr. Yamaguchi. This would enhance my working relationship with him in the future, if any.
If I wants to work, I would probably have no problems finding a job of similar nature because of my invaluable experience.
Analyze the market and see whether it is feasible to continue working or to study ( recession/boom )
I would then resign from the company as I cannot maximize my potential working there. Also my promotional prospects seem bleak in the company.
If I am Mr. Yamaguchi
Have a talk with George and Francois personally to sort things out and to understand the situation
Evaluate my subordinate’s performances, realize their capabilities, then come to a compromise on the best management style to retain their valuable services
If I am Mr. Yamaguchi
Make some effort to build trust between superior and subordinates by
being fair
demonstrate competency
showing consistency
The End