Samsung Scandal : Japan's Government

1207 Words Mar 10th, 2016 5 Pages
The Toshiba scandal has Japan’s government concerned that the investors will begin to lose confidence in the country. Toshiba’s billion-dollar accounting scandal brought to light a corporate culture in Japan plagued by collusion of its senior members. The corporation was hit with embarrassing revelations that the top executives were pressuring underlings to inflate their profits by about $1.2 billion dating back to 2008 (Nishimura-Poupee, 2015). Senior managers instilled a rigid system that has powered Japan’s post-war boom with lifetime employment in exchange for total loyalty to the corporation. Most of upper management spent their career at the company, climbing the ranks to the top.
The firm hired outside directors and implemented a 16 person board in order to enhance management efficiency and improve their transparency. However, there were several problems found in the books, including a pair of former diplomats on their audit committee who were not qualified for the task (Nishimura-Poupee, 2015). Most Japanese firms include former bureaucrats that were given plum jobs in the industries that oversaw at one point in their careers. Corporations would hire these individuals despite many of them not having the relevant skills to perform their new positions because they had less incentive to question management.
About half of the board resigned after the padding of their profits came to light. The investigating panel described the company’s culture where the lower…

More about Samsung Scandal : Japan's Government

Open Document