Decision Making In a Japanese General Trading Company: A Foreign Investment Perspective

Japanese general trading companies (sogo shosha) are unique entities that have developed a successful decision making process for their foreign investment activities. This dissertation examined the five largest trading companies and addressed two research questions: First, what is the decision making process of a Japanese general trading company as it relates to foreign investment? Second, does this decision making process have merit for Western management practices?;In order to answer these questions, an evidence-based research methodology was employed. An extensive literature review was conducted that concentrated on three major themes: Japanese general trading companies, decision making, and foreign investment. A decision making model was developed based on this literature and the author's observations. Propositions related to the research questions were fashioned and refined using the literature, input from an expert review panel, and the decision model.;This dissertation revealed that the decision process has been successful and that the general trading companies have been able to adapt and evolve. It confirmed that while culture plays a dominant role in Japanese business and decision making, Japanese general trading companies are learning organizations. Although Japanese decision making is a consensus building bottom up process, these firms are capable of incorporating selected Western management practices. Financial and risk analysis, and reduced formality as well as shorter timeframes, and globalization of the management staff have become part of the decision making process.;This dissertation also held that there are elements of Japanese decision making that can be applied to Western management practices. The integration of national staff (foreign managers) into the decision making process and the cultivation of information networks have merit. Of greater significance is their ability to learn and adapt to a changing global environment. Although the author does not advocate total convergence, he does believe that there is value in examining these unique organizations.