The japanese worker

Is it better to stay with one firm throughout your working life or to change firms from time to time?

In Japan, there is a close relationship between the worker and his company. Employees work hard and do hours of unpaid overtime to make their firms more efficient. If necessary, they give up weekends with the family to go on business trips. They are loyal to their organizations and totally involved with them. For example, many of them live in company houses, their friends are people they work with, and in their spare time they do sports and other activities organized by their

employers.

The system of lifetime employment creates a strong link between the enterprise and its workforce. It covers about 35% of the working population. Generally, when a person joins a firm after leaving high school or university, he expects to stay with that firm until he retires. He has a secure job for life. Therefore, he will not be laid off if the company no longer needs him because there is no work. Instead, it will retrain him for another position.

The pay of a worker depends on his seniority, that is to say, on the years he has been with the firm. The longer he stays there, the higher his salary will be^ When he is 30or 40years old, therefore, he cannot afford to change jobs. If he did move, he would also lose valuable fringe benefits. Promotion depends on seniority as well. Japanese managers are rarely very young, and chief executives are at least 60,and very often 70years old. The Japanese have a special way of making decisions. They call it the consensus system This is how it works. When a firm is thinking of taking a certain action, it encourages workers at all levels to discuss the proposal and give their opinions. The purpose is to reach consensus (general agreement). As soon as everyone agrees on the right course of action, the decision is taken.

Because of this method, a group of workers, rather than one person, is responsible for company policies. One advantage of this is that decisions come from a mixture of experience from the top, the middle and the bottom of an enterprise Another advantage is that junior staff frequently suggest ideas for change. A disadvantage, perhaps, is that decision-making can be slow.

Malaysian takeover

What is a takeover bid? Why do some bids succeed and others fail?

The Guthrie Corporation owns rubber, tea and cocoa plantations in Malaysia. Until 1981,it was British-based, being owned mainly by British shareholders. These were either big institutions,.like investment trusts and insurance

companies, or small private investors. However, one morning in September, ownership of Guthrie suddenly changed hands. In the space of four hours, a Malaysian Government agency, Permodalan, bought control of the business. People say it was the fastest takeover in the history of the London Stock Exchange.

This is what happened. The Malaysians already owned 25%of the corporation. They used the London stockbrokers, Rowe and Pitman, to increase their stake in it. They began the day by offering to buy 5%of the company's shares for 901 pence each. The market price was then 662pence. The big investors jumped at the chance to sell at such a favourable price. By lunchtime, Rowe and Pitman had spent £72million and obtained 25.5%of the plantation group's shares. At the same time, Permodalan managed to buy a further 10%of the shares from Malaysian shareholders. Since it now had a shareholding of well over 50%,it controlled the Guthrie Corporation.

After making its successful bid, Permodalan offered to buy the remaining shares in the company. A month later, Guthrie's directors recommended shareholders to accept the offer, though they thought the price of 901pence did not reflect the true value of the business. They explained that only a small number of shares would remain in independent hands, so the market for those shares would be limited. Their price would probably fall below 901pence.

Everyone in the financial world was surprised at the speed of the takeover. Newspapers described it as a 'dawn raid' on the Stock Exchange. Most people admired the way in which it had been planned and carried out; However, some criticized the bid. One person said 'It is wrong that people can get control of a business so quickly without informing the majority of the shareholders'.

Why did Permodalan take over Guthrie? First, the Malaysian Government wanted to have control of important resources such as rubber and cocoa. Secondly, it was worried that the corporation was moving further away from South-East Asia. In recent years, Guthrie had diversified its business activities, buying companies in other parts of the world. For example, it had just invested $68 million in the American company, Page Airways. Permodalan decided a takeover was necessary to protect its already large investment in Guthrie.