The influence of corporate headquarters on leadership styles in Japanese and US subsidiary companies.

The results of a questionnaire survey are found to reinforce the link between leadership styles and cultural upbringing and education

Introduction

Japanese multinational companies continue to enjoy considerable success in producing and marketing goods and services in international markets. The role played in this success by the relationship between parent headquarters (based in Japan) and overseas subsidiaries (located in foreign countries) is a subject of intense interest. How independent are such overseas subsidiaries with regard to issues such as making their own decisions, resisting pressure placed on them by headquarters, setting their own preferred leadership agenda, and influencing and controlling their own marketing plan? Answers to these questions have profound effects on the styles of leadership displayed in Japanese overseas subsidiaries. The objective of this article is to assess the amount of influence exerted by headquarters in Japan on the decision-making ability of subsidiary companies and the way in which this is reflected in the leadership styles of subsidiary management. For the purpose of the article only Japanese subsidiaries located in North America are considered.

Influence of overseas headquarters and leadership implications

Two divergent views can be explored. Totoki (1990) suggests that the Japanese corporation frequently leaves the decision-making responsibilities, which often include the development and implementation of marketing strategies, to their subsidiaries. These managers will receive overall direction but will develop and implement their own strategies to accomplish the corporate objective. Rehfeld (1990) offers an alternative view. Writing of his experiences as vice president of Toshiba America, and president of Seiko Instruments USA, he suggests a more intrusive and directive role on the part of "Tokyo". Three issues are worth mentioning. First, the role played by Japanese shadow managers who communicate informally with Tokyo and are often used to relay - what amount to - orders from Tokyo, effectively depriving non-Japanese executives of any real decision-making power. Second, the pervasive and empowered roles played by two groups of Japanese-based managers: international sales and marketing (ISM) and R&D engineers. No changes could be made without the approval of "engineering in Japan"; additionally, the president of Toshiba America reported directly to the general manager of ISM responsible for global business development outside Japan. Third, the emphasis placed on trying to get everyone to agree through the practice of consensus decision making resulted in a persistent pursuit of exploring alternatives "even when the solution seemed obvious". The result was a proliferation of task forces and study teams on which "Japanese managers from Tokyo" were invariably influential.

An issue concerning Japanese managerial practices is the difficulty in duplicating such actions at host locations. Bowman and Caison (1986) suggest that leadership style can be recreated in host environments, provided that …