Question

In your opinion, what are the main risks of Yogo's business strategy as applied in its domestic market, i.e. Japan?

Answer 1

Yogo Game Inc. is a Japanese social media company that has its business in Japan, America, China, and Vietnam. It is a multinational corporation that is linked to the Internet commodities and service industry. The Yogo game has employed over 2000 employees in all its subsidiaries. The Yogo Game is very successful in its home country i.e. Japan and wanted to expand towards western countries in 2000. Yogo game started its subsidiary Yogo Game America in Menlo Park, Silicon Valley, and appointed Mr. Hiro Keigo as CEO for American Subsidiary.

The Yogo Game was facing the main risk of managerial and cultural differences between the home country and other countries. The main risk of Yogo's business strategy is the difference in mentality towards job and career in the USA. The USA subsidiary of Yogo Game composed of 35% Americans and the remaining portion was filled by Japanese. The Yogo Game USA wanted to double the employees from its current number of employees that would be composed of 70% Americans and the remaining Japanese experts.

The other issue is the language barrier between Americans and Japanese employees that could create an issue of communication and cooperation between them.

The main risk of business strategy that could create an issue with American subsidiary is listed below:

a. The difference in Corporate culture: Corporate culture is a very important and essential business strategy to create a positive work culture and provide motivation to the employees to perform better in their job and duties. When it comes to Yogo Game America, the parent company faces many issues that can create issues between employees. Because both the employees have different mentality towards the job, different attitudes, and differences in work behaviors with each other. The main points need to be discussed for the risk of business strategy are listed below:

i. Individualist vs Collectivist nature: The main risk of business strategy that is applied in the home country i.e. Japan is collectivist mentality towards the job. Japanese believe in the improvement and wellbeing of the group and the whole company but on the other side, the Americans have Individualist mentality towards a job where they think about themselves first. Americans believe in personal growth rather than the growth of the collective group.

Japanese Experts and employees in top management prefer to a business culture that works towards organizational achievement and improvement of a collective group, are facing issue from American employees who prefer individual achievement. This is the main risk with the business strategy applied in Yogo Game Japan.

ii. Hierarchical vs centralized business structure: Another risk that might face with Yogo Game America is the organization structure difference in Japan and America. In Japan, companies have a hierarchical organization structure that allows employees at all levels to take participate in the business decision-making process to improve the performance of the organization and to solve major organizational issues. In this type of structure, all the business decisions will be circulated to each level of management and after having consensus, the implementation will start.   

But on the other side, in America, companies have a centralized organization structure where all business decisions will be taken by the top management and leaders. The issue with this structure is that the lower management will not take part in the business decision-making process and employees will not align their actions with the business decision.

iii. Human Resource Management Style: This is also the main risk between the human resource management style between the two countries. In the American human resource management style, the employees are provided with great employee and job satisfaction by giving them a great salary, benefits, and promotions and motivates them to perform better in the organization but the American style often neglects employee career development.

But on the other side, Japanese companies provide great career development options to the employees, many a time, employees work for their lifetime in the same organization. When these two types of employees work in the same organization, there are many issues can be created in the organization. Both the employees want to follow their own country style of human resources and finish their duties according to that.

So as per the discussion, we can say that there are differences in corporate culture between the two countries. The policies and business strategies applied in the home country can create issues in other countries.