Abstract
Japanese corporate governance has strengthened over the last decade (the perceived development); however, this is only one aspect of this change. Another aspect requires some analysis to determine the essence and reality of Japanese corporate governance. I use the terms “vertical governance” and “horizontal governance” in the analysis for this paper. Vertical governance, which can be summarized as forced CEO discipline, is the dominant perspective of the current global governance debate. Horizontal governance is introduced in this paper and is a concept summarized as voluntary CEO discipline. I argue that horizontal governance has been a salient characteristic of traditional Japanese corporate systems for decades, although it is relatively new in terms of its theoretical perspective. The significant changes in Japanese corporate governance since the late 1990s have the potential to undermine the foundation of horizontal governance of Japanese firms (the unperceived decline). Caution is necessary in assuming that these changes portend improvements in overall Japanese corporate governance.
This chapter is a revised version of an article that appeared in Hitotsubashi Journal of Commerce and Management, 44(1) (2010), 13–28.
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Notes
- 1.
I use these terms interchangeably although there is a slight difference in their meaning.
- 2.
Managers have been aware of the importance of firm-specific investment long before the term was coined and disseminated by academics.
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Tanaka, K. (2015). The Perceived Development and Unperceived Decline of Corporate Governance in Japan. In: Kambayashi, N. (eds) Japanese Management in Change. Springer, Tokyo. https://doi.org/10.1007/978-4-431-55096-9_2
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