Topic > Business Case Analysis - 1593

Leonard Prescott, vice president and general manager of Weaver-Yamazaki Pharmaceutical of Japan, believed that John Higgins, his executive assistant, was losing effectiveness in representing the U.S. parent company due to an extraordinary identification with Japanese culture. The parent company, Weaver Pharmaceutical, had extensive international operations and was one of the largest U.S. pharmaceutical companies. Its competitive position depended heavily on research and development (R&D). Sales activity in Japan began in the early 1930s when Yamazaki Pharmaceutical, a major drug and chemical manufacturer in Japan, began distributing Weaver products. World War II interrupted sales, but Weaver resumed exporting to Japan in 1948 and subsequently gained a substantial market share. To prepare for increasingly fierce competition from Japanese manufacturers, Weaver and Yamazaki established a jointly owned and operated manufacturing subsidiary in 1954 to produce part of the Weaver product line. Through the joint effort of both parent companies, the subsidiary soon began producing sufficiently broad product lines. to meet the general demands of the Japanese market. Imports from the United States were limited to highly specialized items. The company independently conducted significant research and development activities, coordinated by a joint committee representing both Weaver and Yamazaki to avoid unnecessary duplication of effort. The subsidiary produced many new products, some of which were successfully marketed in the United States and elsewhere. Weaver's management considered the Japanese operation one of its most successful international ventures and believed that the company's future prospects were promising, especially considering Japan's steadily improving standard of living. The branch was led by Shozo Suzuki who, as executive vice president of Yamazaki and president of several other branches, limited his participation in Weaver-Yamazaki to basic policymaking. Day-to-day operations were managed by Prescott, assisted by Higgins and several Japanese directors. Although many other Americans were assigned to the enterprise, they did research and development and had no general management responsibilities. Weaver Pharmaceutical had a policy of moving U.S. personnel from one foreign location to another with occasional tours of the international home office division. Each of these assignments generally lasted three to five years. There were a limited number of expatriates, so the company's personnel policy was flexible enough to allow an employee to stay in a country indefinitely if they wanted. Some expats had stayed in one place abroad for over ten years. Prescott replaced the former general manager, who had been in Japan for six years.