American investment decision making processes
American investment decision making processes is based on maximization of shareholder’s wealth where realistic and necessary for the growth of the company. It means company’s only goal is to maximize profit and we can say that its main responsibility is to operate the company the best interest of shareholders, the company’s true owners, by maximizing returns
Japanese investment decision making processes
Japanese investment decision making processes is based on relative safety and domestic market with the change in the market condition such as shrinking of japanez population japanez company facing black out. because of its slow and rigid investment decision making processes it does not allow for competitiveness on global scale
In regards to the HBR case study on Tokyo Disneyland and Disney Sea Park
The philosophy and capital budgeting techniques s differ significantly among Japanese and American firms. In a joint venture, such differences have a momentous impact on decision-making processes. Different approaches toward capital budgeting and distinct corporate governance regimes led the two firms to evaluate the project in different ways
In 1997, building on its earlier success with Tokyo Disneyland, Oriental Land Corp. Japan and the Walt Disney Co. discussed the possibility of a new joint project known as the Tokyo DisneySea Park.Walt Disney having Western business philosophy of maximization of shareholder’s wealth it walked into the negotiation with only their shareholders’ interest in mind. and as ageist to it Tokyo Disney Sea Park have slow and rigid investment decision making processes so Walt Disney has refused to compromise or lower the terms for Tokyo Disney Sea Park. Besides Hong Kong, Walt Disney had other choices for building a new theme park. While Hong Kong was the most serious contender, there were other Asian cities that courted the world-class brand name. Walt Disney’s terms were so rigid that OL, the main Japanese investor in this contract, objected. Walt Disney was not willing to cough out anything for the construction of the park, but it imposed a 10% royalty on the admission fee and sales of foods and beverages Moreover, at the time of negotiation, Walt Disney’s financial position was weak, its movie and TV production divisions were struggling financially Under these terms, Walt Disney would collect a fixed amount of cash . Finally, in June 2005 the park began a trial of its nightly fireworks display, drawing complaints from residents in nearby Discovery Bay about the smoke and noise created. In the meantime, local district councilors and environmental watchdogs opened fire on management’s refusal to install the cleaner and less noisy air-launch system adopted by Disneyland in California for its nightly fireworks.
