Lose and learn: Japan's firms pay price of financial speculation

Article Abstract:

Eight of Japan's nine leading general trading firms, known as sogo shosha, have incurred severe losses due to participation in arbitrage and high-risk stock investments, known as zaiteku, during the country's 1988-89 bubble economy. The eight companies are Itochu, Mitsubishi, Sumitomo, Marubeni, Nissho Iwai, Kanematsu, Nichimen and Tomen, while Mitsui is the ninth firm that avoided investing in zaiteku. These zaiteku losses will probably curb corporate profits for several years. The sogo shosha companies' executives have forsworn any further involvement in zaiteku investments.

Economic aspects, Finance, Trading companies

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Blood and profit

Article Abstract:

A survey reveals that members of founding families of a corporation and its professional managers make for the best leadership combination for companies. The presence of family members in the company preserves the pioneering spirit of the founders, while the leadership of career managers satisfies other employees' morale. The study further shows that a leadership combination between family members and non-family members leads to greater profitability. However, a lack of drive and ambition in the managers and family members can prove detrimental to the company.

Management, Evaluation, Column, Succession planning (Business)

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No expenses pared

Article Abstract:

Japanese corporations still spend millions on business entertainment despite a general slowdown in the economy. Tradition dictates that business is done by entertaining clients, which explains the Japanese preoccupation for wining and dining. Japanese companies $42 billion in entertainment expenses for 1990 alone. Tax measures also contributed to the rise in entertainment expenses as small and medium-sized companies are encouraged to give gifts and entertain clients to get tax rebates.

Public relations

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