Shinsei Case Study

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Shinsei Bank Case
Shinsei bank has a rich history in terms of influence over the Japanese banking sector. Of all the defining moments, there are a few moments that reflect the culture shift of Shinsei bank from the more traditional Japanese approach to the more Western business model. These moments include the denial by Shinsei to forgive 97 billion Yen in debt owed by Sogo, the creation of the Shinsei Securities operations and the institutional banking department, being listed on the Tokyo Stock exchange and the hiring of Tom Pedersen as the Chief Learning Officer All the above moments are important because all reflect the shift from tradition and probably may account for the current lack of culture or rift between the traditional Japanese employees and the foreign employees of Shinsei. Traditional Japanese banks were expected to view profits as long term and were expected to be more socialist in terms of sharing the burden with society. By rejecting the request of Sogo to forgive its debt, Shinsei set the tone that its main responsibility is not to society but to earn a profit for its shareholders. This aspect was strengthened by the creating of the Securities Operations and the Institutional banking department. As the case pointed out, these positions were filled by foreigners who had experience in creating profits. In turn, these employees were mostly paid on commissions, which exacerbated their risk taking for short-term profits, which is inconsistent with the views of the traditional Japanese employee. In addition, by being listed on the stock exchange marked a milestone for the company because now its focus was completely shifted to earning profits and doing whatever was necessary to earn profits. All the above changes led to a culture rift between the traditional Japanese employees and foreign workers. As the case pointed, this rift or lack of culture was noted by Porte. Understanding the seriousness of the problem, Porte hired Tom Pedersen to...
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