Managerial Finance Case
TOKYO DISNEYLAND AND THE DISNEY SEA PARK: CORPORATE GOVERNANCE AND DIFFERENCES IN THE CAPITAL BUDGETING CONCEPTS AND METHODS BETWEEN AMERICAN AND JAPANESE COMPANIES.
1.What are the industry differences in US Corporate Governance and Japanese Corporate Governance?
JAPANIES CORPORATE GOVERNANCE US CORPORATE GOVERNANCE
Stakeholders of organiztions:
Japanies system believs in the wealth maximization of stake holders, including managers, labour, suppliers, crediters etc American syatem always emphasized on striving for wealth maximization of the share holders and calculated it in terms of CF, capital gains etc
Positive NPV Concept:
Japanies Governance was of the opinion that the motto is not solely wealth maximization of share holder so the capital budgeting criteria was different US governace always check feasibility of the projects in terms of positive NPV
Principle-Agent Relationship
There was no concept of principal agent relationship in Japan, as Japanies believe that even the managers are the principal and can likely to have their own goal setting Unlike Japan, Uscompanies firmly believe in
Principal agent relationship and consider managers to be agents who have to work on the goal setting of share holders
Wealth-Maximization:
Japan believe in long term value maximization US believes in short term value maximization
Status Of Employees:
Empolyees are important stakeholders for Japan The NPV concept of America shows that they believe share holders to be the only stakeholders.
2.Identify differences in US decision making process and Japanese decision making process?
US decision making system:
US decision makers strongly believe in the investment of those projects which have positive cash flows. They analyze the investment decisions with the help of NPV and IRR. The decision making method has advantage that cash flows are discounted as a result the concept of time value of money is taken into consideration in order to determine the feasibility
1.What are the industry differences in US Corporate Governance and Japanese Corporate Governance?
JAPANIES CORPORATE GOVERNANCE US CORPORATE GOVERNANCE
Stakeholders of organiztions:
Japanies system believs in the wealth maximization of stake holders, including managers, labour, suppliers, crediters etc American syatem always emphasized on striving for wealth maximization of the share holders and calculated it in terms of CF, capital gains etc
Positive NPV Concept:
Japanies Governance was of the opinion that the motto is not solely wealth maximization of share holder so the capital budgeting criteria was different US governace always check feasibility of the projects in terms of positive NPV
Principle-Agent Relationship
There was no concept of principal agent relationship in Japan, as Japanies believe that even the managers are the principal and can likely to have their own goal setting Unlike Japan, Uscompanies firmly believe in
Principal agent relationship and consider managers to be agents who have to work on the goal setting of share holders
Wealth-Maximization:
Japan believe in long term value maximization US believes in short term value maximization
Status Of Employees:
Empolyees are important stakeholders for Japan The NPV concept of America shows that they believe share holders to be the only stakeholders.
2.Identify differences in US decision making process and Japanese decision making process?
US decision making system:
US decision makers strongly believe in the investment of those projects which have positive cash flows. They analyze the investment decisions with the help of NPV and IRR. The decision making method has advantage that cash flows are discounted as a result the concept of time value of money is taken into consideration in order to determine the feasibility