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Building on the institutional theory perspective on corporate governance change and based on interviews with investor relations (IR) managers in large Japanese companies, this study aims to examine Japanese IR managers’ perceptions of the influence of foreign shareholders on Japan’s corporate governance reform and stakeholder-based system. The paper examines tensions, conflicts and collaborations among different stakeholders involved in corporate governance changes in Japan, especially in the areas of firm ownership, employment relations and boards of directors. The paper explains why convergence does not happen in some large Japanese companies by investigating Japanese managers’ responses to and perceptions of foreign shareholders in multiple corporate contexts.

The author conducted in-depth interviews with ten IR managers at large, listed Japanese companies in Kyoto and Tokyo and two managers at foreign investment banks in Tokyo, between 2018 and 2021.

This paper explores five themes that emerged from my interviews: Chief executive officers’ (CEOs’) mixed perceptions of foreign investors, the effectiveness of CEO compensation and outside directors, managers’ reluctance to accept stock price-driven business strategies, foreign investors’ engagement vs investments in index funds and gender patterns, including the effectiveness of token female outside directors. The Japanese companies the author looked at incorporated foreign shareholders as consultants and adopted a few major shareholder-based customs, such as CEOs communicating with investors, having outside directors, increasing CEO compensation and slimming down unprofitable parts of the business via restructuring and downsizing. Simultaneously, they resisted a few major shareholder-based practices. Foreign shareholders’ pressure revealed tensions and contradictions between the Japanese stakeholder system and shareholder primacy-based customs.

This paper is one of the few qualitative studies that explores Japanese IR managers’ responses to and perceptions of foreign shareholders in corporate governance reform, with a particular focus on ownership, employment relations and board members. This paper provides examples of tension, conflict and cooperation between Japanese managers and foreign investors, as seen through the eyes of Japanese IR managers. Examining changes in Japan’s stakeholder-based system of corporate governance reform enables us to better understand the processes by which, with vigorous pressure from government and foreign shareholders, a non-western country like Japan may adopt shareholder-based customs and how such a change may also lead to institutional changes.

Applying the concept of “entrepreneur managers” from dynamic capabilities theory to the question of how some Japanese managers develop and use their relationships with foreign investors, this article explores organizational contexts in which Japanese managers use foreign shareholders as resources to enhance firm capabilities in the global marketplace, deploy assets effectively and implement changes to traditional organizational customs. The article asks why and how some top managers implemented institutional changes and adopted customs that are common in the shareholder-based system while others did not.

We conducted qualitative interviews with 11 inverstor relations (IR) managers of large, listed Japanese firms in Kyoto and Tokyo.

First, by inviting a hedge fund partner and using their human capital and social capital, a Japanese CEO committed to strengthening his firm’s competencies in the global market and introduced changes that are common in the shareholder-based system. Second, a CEO with an MBA degree and exceptional communication skills in English and Japanese dedicated himself to executing much of the strategic advice suggested to him by foreign shareholders and altered some of his firm’s traditional Japanese management practices. Third, even though many Japanese firms welcomed and used foreign shareholders as advisors to help them streamline and/or acquire firm assets, their top leaders’ implementation of organizational changes was limited. Fourth, the top leaders of family-owned firms were reluctant to initiate dialogue with foreign investors.

This article adds some useful organizational context to existing scholarship on institutional theory by examining Japanese leaders’ strategic management in their relations with foreign investors. Using the concept of dynamic capabilities, it addresses the role of innovative strategic managers in firms’ institutional changes.

Based on in-depth interviews with 64 women in 5 Japanese firms, this chapter examines how women workers interpret workplace sexual behaviors and interactions in different organizational contexts. The chapter explores the processes by which workplace sexual interactions, including harmful behaviors, are normalized and tolerated. It discusses three types of sexual workplace interactions in Japanese firms: (1) taking clients to hostess clubs, which women workers often see as “a part of their job”; (2) playing the hostess role at after-work drinking meetings, where a certain amount of touching and groping by men is seen as “joking around” or simply as behavior that is to be expected from men; and (3) repetitive or threatening sexual advances occurring during normal working hours, which are seen as harassment and cause women to take corrective action. The chapter confirms previous studies that have shown that women's interpretations of sexual behaviors can vary from enjoyable to harmful, depending on the organizational contexts. The chapter also argues that Japanese organizational culture, through its normalization of male dominance and female subordination, fosters and obscures harmful behaviors. Eradicating harmful sexual behaviors will require firms to reevaluate sexualized workplace customs and mitigate the large gender gap in the organizational hierarchy in Japanese firms.

The chapters in this volume are the fruit of a feminist revolution in sociology that transformed conventional ways of thinking about work in the 1990s. Prior to the feminist revolution, the most important sociological theories that accounted for gender inequality in the workplace were human capital theories and socialization theories, both of which blamed women workers for their lower status and pay in the workplace (Schilt, 2010; Williams, 1995). Human capital theories argue that men and women receive different pay-offs from employment because they invest differently in their careers (Padavic & Reskin, 2002; Blau, Ferber, & Winkler, 1998; Polachek, 1981). Men seek higher education, skills training, and overtime at work because they are family breadwinners whose major responsibility is to support their wives and dependent children. Meanwhile, women invest less in the human capital valued by workplaces because their primary commitment is to their families. This theory assumes the heterosexual nuclear family, which is no longer the typical family form (Coontz, 1997). This rational choice perspective also fails to explain recent trends in women's educational attainment and labor force participation rates, now estimated to be equal to if not greater than men's (England, 2010).

Dina Banerjee is a postdoctoral research fellow in the Purdue Center for Faculty Success at Purdue University. She graduated with her Ph.D. from Purdue University in 2009. Her areas of specialization are gender, work and occupation; development and social change; transnational feminism and globalization; and sociology of developing nations. In her doctoral dissertation she examined the effects of sex-segregation and racial/ethnic segregation on the job-related well being of women workers in the United States. She is the coauthor (with C. C. Perrucci) of “Race, Work Experiences and Perceived Promotional Opportunity,” published in the International Journal of Contemporary Sociology. Dr Banerjee is also associated with the Women's Studies Program at Purdue University. Before coming to the United States as a graduate student, she worked as a lecturer in the University of Calcutta (Kolkata, India).