Strategic Decision-Making in Japanese Trading Companies: Case Studies of Information Search Activities

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ABSTRACT

The paper describes an investigation into the information search activities of senior Japanese executives involved in strategic decision-making in Japanese trading companies. The research task was conducted over a twelve-month period between 2000-2001, at five well-known Japanese kaisha (see Appendix 1 for a list of Japanese expressions used in this paper) headquartered in Tokyo. This paper identifies sources of information that are dev-eloped and used by executive decision-makers in evaluating strategic alternatives. As well modes of access to the identified sources are highlighted and analysed.

Results from the study indicate the prominence of distinctive Japanese managerial practices such as nemawashi and settai, in developing information sources. As well it was found that these practices strongly influence how information sources are accessed. Executive decision-makers from the Presidential level to Divisional Manager level who participated in this study were emphatic in their belief that strategic decision-making in most situations is reliant upon the network of information sources cultivated by decision-makers as well as their skill in accessing the various sources.1

INTRODUCTION

Researchers of managerial practices such as Mitchell and Beach (1990) and Harrison (1996) note a paucity of 'rich' research into the processes involved in strategic decision-making. Equally so in the Japanese context, Takahashi (1997) notes the lack of understanding into decision-making processes in Japanese kaisha. Furthermore as Japan is Australia's most significant trading partner (Australian Bureau of Statistics 2000), greater understanding of information sources and access strategies used by Japanese executives can be of major benefit to Australian managers in the field, particularly those engaged in international managerial activities.

'Access', is described by Gummesson (1991) as a researcher's 'biggest problem', and this is even more relevant when considering that strategic decision-making is generally associated with executive management (Drucker 1975). By virtue of the generous support of contacts nurtured and developed over a decade in corporate Japan, access was gained at the presidential, vicepresidential and divisional head levels of five Japanese kaisha. Three of the companies are major corporations, each employing worldwide over 20 000 employees. One organisation is a medium-sized kaisha employing 474 people and the final company is a small, rapidly growing ecommerce kaisha employing 18 individuals.

Enabled by this access, the strategic decisionmaking activities of Japanese executives based in Tokyo were examined over a twelve-month period, with particular focus upon the information search activities and evaluation of strategic alternatives. This paper reports upon the information search activities of the executives when faced with strategic decisions.

PREVIOUS WORK ON INFORMATION SEARCH AND DECISION MAKING

Examination of information search activities generally occurs in context of their role in the entire strategic decision-making process. However a dearth of more micro-focused studies concerning particular activities of the process is evident in the literature. With regard to information search activities in particular, a majority of studies examined addressed information search from an IT perspective, developing decision support systems (see for example, Noci & Toletti 1998 or Lee & Chen 1997). One exception is Shrivastava's (1995) examination of information use and criteria to evaluate alternatives, which resulted in a link being posited between these elements and power centralisation - culminating in what is described as a form of decision-making that is more expedient in nature. Generally however models and frameworks offered in the literature illustrate the entire decision-making process, and it is from this literature and an exploratory study that research objectives were drawn. …