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Varieties of engagement: Japanese corporate leaders’ strategic relations with foreign shareholders and institutional change

Kumiko Nemoto (School of Business Administration, Senshu University, Kawasaki-shi, Japan)

Review of International Business and Strategy

ISSN: 2059-6014

Article publication date: 2 May 2024

Issue publication date: 20 May 2024




Applying the concept of “entrepreneur managers” from dynamic capabilities theory to the question of how some Japanese managers develop and use their relationships with foreign investors, this article explores organizational contexts in which Japanese managers use foreign shareholders as resources to enhance firm capabilities in the global marketplace, deploy assets effectively and implement changes to traditional organizational customs. The article asks why and how some top managers implemented institutional changes and adopted customs that are common in the shareholder-based system while others did not.


We conducted qualitative interviews with 11 inverstor relations (IR) managers of large, listed Japanese firms in Kyoto and Tokyo.


First, by inviting a hedge fund partner and using their human capital and social capital, a Japanese CEO committed to strengthening his firm’s competencies in the global market and introduced changes that are common in the shareholder-based system. Second, a CEO with an MBA degree and exceptional communication skills in English and Japanese dedicated himself to executing much of the strategic advice suggested to him by foreign shareholders and altered some of his firm’s traditional Japanese management practices. Third, even though many Japanese firms welcomed and used foreign shareholders as advisors to help them streamline and/or acquire firm assets, their top leaders’ implementation of organizational changes was limited. Fourth, the top leaders of family-owned firms were reluctant to initiate dialogue with foreign investors.


This article adds some useful organizational context to existing scholarship on institutional theory by examining Japanese leaders’ strategic management in their relations with foreign investors. Using the concept of dynamic capabilities, it addresses the role of innovative strategic managers in firms’ institutional changes.



This research was funded by the Nomura School of Advanced Management and a Senshu University Research Grant.


Nemoto, K. (2024), "Varieties of engagement: Japanese corporate leaders’ strategic relations with foreign shareholders and institutional change", Review of International Business and Strategy, Vol. 34 No. 3, pp. 454-468.



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