Katsuyuki Kubo

Corporate mission, corporate policies and business outcomes: evidence from Japan

Purpose – This study sets out to explore questions such as: “Does mission statement matter? If so, in what ways?” Using data on mission statements of 128 large Japanese firms, the paper aims to show that corporate mission has a significant impact on corporate policies that determine employment, board, and financial structures.Design/methodology/approach – The paper provides evidence that strong‐mission firms are more likely to retain incumbent employees, promote managers from within firms, and have less debt and a higher percentage of interlocking shareholdings than weak‐mission firms.Findings – The evidence supports the view that strong‐mission firms value their organizational capital and thus tend to adopt policies to preserve it. It also confirms that corporate mission and its embedded policies contribute to better corporate performance. The paper suggests that the effect of explicit corporate mission and its implementation has practical impacts in corporate policies and business outcomes.Research limi...

THE RELATIONSHIP BETWEEN FINANCIAL INCENTIVES FOR COMPANY PRESIDENTS AND FIRM PERFORMANCE IN JAPAN

Kaplan (1994) concludes that the relationship between top pay and stock performance in Japan is similar to that in the USA. Using a new and comprehensive data set that includes presidents’ stock and their stock option holdings, this study estimates the sensitivity of Japanese presidents’ wealth to shareholder wealth in the period 1977–2000. Contrary to the commonly held belief that Japanese corporate governance is becoming more like that in the USA, the results show that pay–performance sensitivity actually decreased substantially after 1990. In 2000, Japanese presidents received

Does Corporate Culture Matter? Evidence from Japan

US22,100 when stock returns increased from −2.1% to 14.8%.

CEO compensation and firm performance in Japan: Evidence from new panel data on individual CEO pay

Corporate culture does matter. Using data on mission statements of large Japanese firms, we show that corporate culture has a significant impact on corporate policies that determine employment, board, and financial structures. We provide evidence that strong-culture firms are more likely to retain incumbent employees, promote managers from within firms, and have less debt and a higher percentage of interlocking shareholdings than weak-culture firms. This evidence suggests that strong-culture firms consider their culture to be organizational capital and adopt policies to preserve it. We also confirm that culture and its embedding contribute to better corporate performance. We find these culture effects to be considerable in magnitude and at least as large as those of other factors, and assert that the role of culture must be taken into account in order to understand corporate policies and performance.