The vaccination dilemma facing Japan’s CEOs

This time a year back, Yuji Kuroiwa, the guv of Japan’s Kanagawa prefecture, tried some light wordplay in the face of a scary brand-new illness, financial convulsion and life-altering strictures. 

The generally jubilant early-May “golden week” of legal holidays, he recommended, ought to be rebranded “gaman week” for 2020 — a referral to Japan’s valued quality of stolid, uncomplaining determination. A year later on, with golden week 2021 ready to begin, infections increasing, the nation in a restored state of emergency situation and less than 3 percent of Japan’s population getting the very first vaccine dosage, Kuroiwa rolled the exact same gag out for a 2nd time.

After 12 months of counting on the general public to keep Covid-19 at bay with self-restraint, the duplicated need for more unflinching endurance — of gaman without noticeable endgame — feels a much heavier imposition. It would possibly feel less so, state Japanese good friends, if the authorities were not concurrently promoting their decision to permit lots of countless professional athletes and their groups to get in the nation for the Olympics, while using no company target for immunizing the basic population. 

This stretched environment is producing an ethical issue for those leaders of Japan’s more globalised business who are desperate to return on the roadway (or the personal jet). The capability for gaman counts amongst the nation’s inmost natural deposits: both public and economic sectors lean on it continuously. However disputes on Japanese social networks expose an indignation that the shop has actually been overdrawn, instead of dealt with as valuable and limited. Given this tension, say the CEOs of several of Japan’s largest companies, business leaders are torn over whether they should get vaccinated outside the country and sneak into a gaman-exempt elite. 

The motivation to do so is serious. For the past few years, many Japanese companies have decided that the best growth options lie outside the country. The calculation is based on Japan’s shrinking population, but companies have also perceived an exceptional window for overseas dealmaking in which investors are actively pushing them to raise returns on equity and Chinese competitors are (for now) less globally acquisitive.

The result has actually been a boom in overseas acquisitions that was, pre-pandemic, generating an average of about $23bn of deals per quarter. In a relatively short space of time, that has left a number of Japanese companies — from insurers to brewers — with extensive global business empires and a pressing need to patrol them in person.

The problem with all this acquisition is that it was undertaken with what were once reasonable assumptions about how the new assets would be integrated. Not only would substantial numbers of Japanese executives visit the acquired operations and report back, but there would normally be multiple trips by the CEO and his senior leadership team in the months following the deal.

Japanese buyers often aim to keep the management of a target under close observation post acquisition — a scrutiny that depends on pre-pandemic mobility and which executives deem impossible via Zoom. The surprise visit to far-flung corners of their empires, numerous CEOs have grumbled in recent weeks, is a sorely-missed management weapon. 

Business leaders confronting this now fall into two camps. One (particularly those with acquisitions in the US) is actively pursuing schemes to get vaccinated abroad (or to spirit vaccines back home for personal use) and allow immediate travel.

At the start of the year, when Japan’s vaccination programme seemed even more remote, domestic media reported in scandalised tones that the heads of “some of Japan’s most famous companies” had managed to secure vaccines from China.

One CEO of one of Japan’s biggest household names was not part of that scheme, but finds it easy to justify: thousands of employees rely on him to run the empire to the very best of his ability, and receiving a vaccine sooner is necessary to that end.

But several CEOs in the second camp, likewise running businesses with recent abroad acquisitions, said the idea was unthinkable. Whatever the brief-term advantages of grasping months of head start on a sluggish vaccine programme, the hit to reputation — as a leader unable to gaman — would be irreparable. 

The heads of Japanese organization, one tells me, exist in a realm where, for all their revered elevation, must affect to share the quiet endurance of their staff — especially when a gaman resource that as soon as appeared in such abundant national supply is being called upon to carry everyone through a 2nd, miserable golden week.

leo.lewis@ft.com

Jobber Wiki author Frank Long contributed to this report.