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  • Unsuccessful protest against instatement of NJ CEO at Takeda Pharma: Note weird narratives of exclusionism

    Posted by Dr. ARUDOU, Debito on July 7th, 2014

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    Hi Blog. I’m coming to this story a bit late (it was first brought up here within comments to a different post), so my apologies — I’m running this blog on a 4-5 day cycle so I can have a life outside of cyberspace. Anyway, check this out, for the record:

    Japan’s largest drug maker, Takeda Pharmaceutical Co., last month tapped a NJ (a Frenchman by the name of Cristophe Weber) to be its next CEO. This occasioned protests by the founding Takeda family and dissident shareholders, because hiring a NJ to be its leader would allegedly be abhorrent.

    Relativism first: We’ve of course had protests and government interventions in other countries when foreigners buy up a strategically-important company. (Let me date myself: I remember the Westland helicopters scandal when I was living in England back in the 1980s!) So business xenophobia is not unique to Japan, of course.

    But check out the narratives of justification for the exclusionism being proffered with straight faces:

    1. A NJ CEO of a Japanese company would be “bad for the morale of Japanese employees”. (Why?)
    2. A NJ CEO would necessarily result in “technological transfer overseas” (i.e., NJ are untrustworthy).
    3. This would mean “finances or research and development would be entrusted to NJ” (Would it? This is an unaccountable dictatorship? This is not an issue of NJ-dom: Remember the corruption of the Olympus case, and they were all Japanese at the helm — until a NJ became the whistleblower.)
    4. A NJ CEO is tantamount to a hostile “takeover by foreign capital” (again, those trust issues).
    5. This particular NJ is unknowledgable of Japan’s health care industry of the “traditions and corporate culture” of Takeda (i.e., NJ are ignorant about Japan and Japan’s permutations of industry).

    Imagine those arguments being made if a Japanese helmed an overseas company (we already had a Japanese in 2009 placed at the helm of, for example, the Japan Society in New York – an organization founded in 1907 by powerful Americans to explore Japanese society). Accusations of racism would probably fly. But in Japan, not so much. These knee-jerk exclusionary discourses are that hegemonic.

    Anyway, the exclusionists (who only hold 1-2% of total shares, so they’re basically soukaiya) did not win out, and Weber became CEO. Nyah. Some referential articles about the Takeda Pharma Case follow. Dr. ARUDOU Debito

    ///////////////////////////////////////

    Takeda family protests putting foreigner at drug maker’s helm
    June 22, 2014 The Yomiuri Shimbun
    http://the-japan-news.com/news/article/0001369207

    The founding family of Takeda Pharmaceutical Co., the nation’s largest drug manufacturer, is in revolt against the management’s plan to install a Frenchman as the company’s first foreign president.

    The firm’s former executives are joining the founding family to thwart a plan to appoint Christophe Weber, 47, president at a shareholders meeting on Friday. But there is little possibility the decision will be reversed. The revolt indicates a deep-rooted aversion among some Japanese toward foreigners assuming top corporate posts.

    Weber was headhunted from major British drugmaker GlaxoSmithKline.

    As a result of its repeated acquisition of huge foreign makers, non-Japanese account for two-thirds of Takeda’s employees. The installation of Weber as president and chief operating officer of the 230-year-old company is seen as a symbol of the firm’s expectations for his international perspective.

    About 110 people comprising members of the founding family and the firm’s former executives in April submitted a jointly signed letter of protest to the company. They warned:

    —If Weber becomes president and Takeda is acquired by a major foreign firm, Takeda’s superior drug-making technologies may be lost if transferred overseas.

    —There is a feared brain drain of Takeda’s researchers, as this could lead to the firm making the same mistakes as major Japanese electrical appliance manufacturers.

    Judging Weber’s appointment as president as tantamount to a “takeover by foreign capital,” they stressed that they would never allow finances or research and development to be entrusted to a non-Japanese.

    Comparing a foreign president to a takeover by a foreign capital may very well be a leap of logic. Those who submitted the letter of protest hold a mere 1 percent to 2 percent of total shares.

    One of the Takeda founding family members, who signed the letter, said: “Weber does not know anything about the Japanese health care industry. He does not know about the tradition and [corporate] culture of Takeda Pharmaceutical, either. It is absurd to install such a person as president.”

    As a reason for Weber’s appointment, Takeda Pharmaceutical said: “It was a result of screening candidates from both inside and outside the company with an eye to fairness. Employees will be able to learn a great deal from working under his leadership, as he has been active in global business.”

    The company declined to comment on the specific points made in the letter of protest, referring only to the upcoming shareholders meeting.

    Takeda Pharmaceutical was established in 1781 in Osaka as a brokerage firm for crude drugs. After the Meiji Restoration in 1868, Takeda began importing Western drugs ahead of domestic competitors.

    The current president, Yasuchika Hasegawa, took over the post in 2003 from Kunio Takeda, a descendent of the founding family. Hasegawa has promoted globalization of the company’s operations by acquiring foreign companies and headhunting non-Japanese from rival firms to appoint them to executive posts.

    ///////////////////////////////////////////

    Interview: New Takeda President Sees Developing Talent as Priority
    By ERIC PFANNER and KANA INAGAKI
    The Wall Street Journal, July 1, 2014
    http://blogs.wsj.com/japanrealtime/2014/07/01/interview-new-takeda-president-sees-developing-talent-as-priority/

    PHOTO: Christophe Weber, president and chief operating officer of Takeda Pharmaceutical Co., speaks during a news conference in Tokyo on April 2, 2014.

    Days after shareholders of Japan’s largest drugmaker, Takeda Pharmaceutical Co., approved the company’s first foreign president, the company said it was moving to develop internal talent so it wouldn’t necessarily have to look outside its ranks for a successor the next time around.

    The new president, Christophe Weber, who is French, said Tuesday in an interview with The Wall Street Journal that talent development and retention was one of 10 management priorities he and a team of Takeda executives had identified for the coming months. Mr. Weber’s appointment had raised concerns that Takeda lacked managers with the skills to oversee the company’s international expansion.

    The news followed a stormy annual meeting last week, where a group of more than 100 shareholders questioned Takeda’s globalization strategy, which has included acquisitions of drugmakers like Nycomed of Switzerland and Millennium Pharamaceuticals of the United States. The appointment of foreign managers like Mr. Weber was bad for the morale of Japanese employees, the dissidents said.

    Shareholders overrode those concerns by an overwhelming margin in a vote that Mr. Weber and Yasuchika Hasegawa, the company’s chief executive, described as an endorsement of Takeda’s globalization strategy. While many Japanese companies have been moving to expand internationally as the domestic market stagnates, few have taken the radical step — for a Japanese company — of hiring foreign top executives.

    “The globalization of Takeda is good for Japanese employees and it is good for Japan,” Mr. Weber said. “I hope that we’ll have my own internal successor as well.”

    Mr. Weber, who joined the company in April, said he had spent his first three months listening to Takeda employees’ concerns and planned to announce a strategy by the end of the year.

    “There is a certain fear of the unknown,” he said. “My hope is that they will see that what we’re doing is good for everybody, especially for Japanese employees.”

    Mr. Weber is joining Takeda at a sensitive time for pharmaceutical companies in Japan, amid heightened regulatory scrutiny on ethical issues.

    Prosecutors in Tokyo said Tuesday they had charged the Japanese unit of Novartis AG with altering research data to make a blood pressure drug, Diovan, appear more effective than competing products. Novartis said it would review the charges and that it had taken steps to improve oversight in Japan.

    Takeda, too, has faced scrutiny of its drug promotions, and in March admitted to using “inappropriate expressions” in ads for a hypertension medicine, Blopress, after questions were raised about the accuracy of a graph.

    “I think our case is quite different from the Novartis case,” Mr. Hasegawa said, adding that the company had put in place measures to improve oversight.

    “The challenge is always how are we sure that 100% of our employees have the same understanding” of the company’s values, Mr. Weber said.
    ENDS

    8 Responses to “Unsuccessful protest against instatement of NJ CEO at Takeda Pharma: Note weird narratives of exclusionism”

    1. Tateman Says:

      I’ve always suspected that bringing in NJ management as a sign that the Japanese company was planning to ‘downsize’ (i.e. sack employees!) Once that is done, the NJ goes away and Japanese management is reinstated. Wa is thus maintained.

      On the other hand, maybe it really is about globalization. But it’ll be interesting to see what happens to employee numbers at Takeda over the next few years.

    2. TJJ Says:

      1.A NJ CEO of a Japanese company would be “bad for the morale of Japanese employees”.
      Unsubstantiated, and possibly irrelevant. In fact, a foreign CEO might make it a more employee-friendly place to work, and reward merit.

      2.A NJ CEO would necessarily result in “technological transfer overseas”.
      Yes, that is part of the business plan of Takeda and has been for decades. The company owns many foreign plants that work in concert with Japanese plants. And tech transfer works both ways – transfer out of Japan and transfer into Japan. It is desireable.

      3.This would mean “finances or research and development would be entrusted to NJ”
      Are you saying NJ can’t be trusted? That’s straight up racist.

      4.A NJ CEO is tantamount to a hostile “takeover by foreign capital”.
      No, you are wrong. It’s completely different. Not even vaguely similar. Please go back to school.

      5.This particular NJ is unknowledgable of Japan’s health care industry of the “traditions and corporate culture” of Takeda.
      I call Bullshit. If these peculiarities of Japan exist, please write down exactly what they are, so we can all see an judge them under the light of day. If you just call them secrets that only Japanese can know, then we have no choice but to call Bullshit.

    3. john k Says:

      “…A NJ CEO would necessarily result in “technological transfer overseas” (i.e., NJ are untrustworthy)….”

      In the same way the “management transfer” would occur by bringing in a NJ to bring the company into the 21st C?

      Or do they mean:

      “..Prosecutors in Tokyo said Tuesday they had charged the Japanese unit of Novartis AG with altering research data to make a blood pressure drug, Diovan, appear more effective than competing products…”

      exposing such practices as clearly those in Japan. A classic case of “image” and “harmony” of the Japanese way that trumps governance and due process.

    4. Robert Moorehead Says:

      So Takeda can take over foreign companies and have ⅔ of its workforce non-Japanese but having a CEO who’s not Japanese would hurt (Japanese) morale and de-motivate (Japanese) employees? Nice to know that the ⅓ of the employees who are Japanese are the only ones who really count. Were these defenders of the faith similarly concerned for the hearts and minds of the non-Japanese employees of the foreign firms when they took them over and replaced their leadership with a Japanese CEO? Clearly this is now a global company and if the protests are any measure of its Japanese workforce, it lacked people with the vision necessary to lead a global corporation. If they want to stay provincial, then they should sell off all their foreign assets.

    5. Jim Di Griz Says:

      It’s interesting in this case, to see how a small minority (including the family of the company founders), a company that made it’s self on the back of importing foreign drugs, is having such a massively hysterical reaction to the appointment of an NJ CEO (I’m guessing he didn’t learn anything from the Olympus scandal, I mean, you’d have to be pretty dumb to accept the post of CEO of a Japanese company after that).

      Again, the international and domestic media overlooks how this is contrary to Abe’s stated goals of boards appointing more outside members, and how it is contrary to Abe’s lip-flapping about globalization.

      IMHO, when the Japanese are buying up foreign companies as a way of not investing their record profits back into Japan (again, contrary to Abenomics stated goals), this is lauded as proof of ‘globalization’, but when not leading the pack, Japan seeks to avoid international responsibilities (gender equality, etc) on the dubious basis of ‘protecting Japan’s unique culture’.

      The free passes have got to stop.

    6. Dean Says:

      Got to wonder what the NJ employees are thinking. Geez, we are all irrelevant and inferior, therefor we only deserve that all knowing Japanese director.

      Hard to believe we are even reading this in 2014. I think if I worked there I would be packing

    7. Dan Says:

      The heads of Finance and R&D are already foreigners at Takeda
      – Chief Financial Officer Francois Roger (French), working from Tokyo
      – Chief Medical and Scientific Officer Tachi Yamada (American, though with a Japanese background, so maybe ok), working from Chicago (Deerfield)

      Same goes for the head of Research and head of Development who report to Tachi, though the head of Research is a non-Japanese foreigner who became Japanese, like Debito

    8. Giuseppe Says:

      This secessionist culture is slowly killing Japan on the inside.
      Rather than embracing the best and brightest people in the world and fully assimilating then into the Japanese culture (making them 100% Japanese), they treat NJ as an external entity that may-be-allowed to work in Japan under a constant umbrella of suspicion.

      Until this mentality change the Japanese economy will be limited in growth.

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