Sōkaiya : corruption or Japanese business solution

Summer is the season of annual shareholder meetings in Japan , which means that it is the « season » of sōkaiya . They can then see and hear especially during the boards,  » persuading  » the shareholders to approve strategies . However, they are far from being as strong- arm. In the field of business, sōkaiya are  » professional consultants  » whose services are sometimes sought , sometimes imposed , and often intimately associated with yakuza . Moreover, it’s called corruption. In Japan, this is the normal way of doing business . Does the Sōkaiya await Drano to unclog the stagnant economy ?It was late 2011. Briton Michael Woodford was offered a position of leadership in the Japanese giant Olympus . But the incredible story of this gaijin accessing the highest levels of a Japanese company quickly turned into a nightmare.


Two weeks after his appointment, Woodford became sacquer management by the shareholders of the company on the grounds that it did not fit with the philosophy of the company , and he did not understand the workings of the mid- Japanese business .


In fact, Woodford was fired for lifting the veil on fraudulent methods practiced Olympus , especially when acquiring the company Gyrus , while  » consulting fees  » of several hundred million inexplicably appeared in the books . At the same time , he examined how often questionable – as an outside view – of doing business in Japan.

 Sōkaiya are brutal business consultant blood brothers of Yakuza

In short , it is said Sayonara, and normally, it would have been the end of the story.


Except Woodford decided to sound the alarm everywhere. Overnight , it was the front page of the media worldwide . It was discovered that the Japanese mafia was involved in the case. He became a victim of bullying , to the point that he feared for his life.


The British business man then tasted a good Japanese medicine: technical extortion and intimidation of sōkaiya .


It should be understood that in Japan , extortion and intimidation is the modus operandi for dealing with conflicts of interest in business for decades. The difference is that for them, it is not perceived as such. Rather, it is seen as a normal way dirty laundry in-house. Hitsuyo aku – or « necessary evil » so that business as usual is maintained. It’s the same difference you might say . Not for a Japanese.


Therefore, they are sōkaiya professional extortionists ? This is not a definition quite faithful to what they really are . As hard as defining what the geishas . These are not prostitutes or escorts . Then, sōkaiya are not necessarily extortionists or criminals. I would say they are professional consultants « persuasion » .


As surprising as it may be, they are a huge relief to shareholders of companies that , without them , would not have the right to speak . Sometimes , they also serve to build a consensus where there could not have them, or to « convince » the majority follow a consensus reached . Yes, it often involves  » a nasty p’tit put in its place . » They are mediators unorthodox techniques.


There are not so long they thought had disappeared . Although the  » good old days  » of sōkaiya has long passed, they are far from having disappeared . Even these experts make a comeback in the last decade . Do not get me wrong , there is no professional association and you do not see meishi in stylized lettering in their portfolio , but it is indeed a specialization. There are categories of sōkaiya , the most effective are of course the most sought after by major corporations.


From a legal standpoint , it is a very dark gray area , but originally , the sōkaiya were little or connected to organized crime. That was until the yakuza have made ​​all the profit potential of the thing.


Organized crime in Japan has lost much ground since the 1990 crisis . The authorities believe that the yakuza population grew to 40,000 , while they were enumerating 90 000 1991 and 180 000 in the early 60s. It seems they have to face the same problems as society in general : population aging , overtaxed , and recruitment difficulties. Having threadbare tolerance of citizens and politicians , they are forced to rethink their methods.


Gone are the days of old school drug rackets , prostitution and gambling . The yakuza have to adapt to new economic realities and to synchronize the time of globalization . They are now active in the stock market and the boards of major companies keiretsu ( conglomerate of major companies).


That’s when being a consultant sōkaiya suddenly becomes very interesting, and many of them are specialized , hence the return of the practice sōkaiya , and why it has become synonymous with mafia.


Olympus is the tip of the iceberg , where among others . It’s just that the company is so huge that it could not do otherwise qu’exploser openly. It is also a sign of the return of this trend that has contributed to the meteoric rise of Japan after the war .


And it is not only in Japan. This is how it works almost everywhere in Asia. South Korea is the clique of chaebols . China is the government red tape . To see them go , it seems to me quite as profitable racket . The three superpowers of Asia did not become powers by focusing on honesty and selflessness.


bobby Dennie

GetLostinAsia est édité par Bobby Dennie un canadien amoureux de l'Asie basé à Singapour qui couvre le terrain depuis 2007. visitez la page a propos GetLostinAsia is edited by Bobby Dennie a Canadian based in Singapore. I am a South East Asia travelling Junkie.I am writing and discovering asia since 2007.

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