Case study: It's not always easy to do business globally, as executives at Japanese brokerage firm Nomura

Holdings Inc. are discovering.72 Nomura acquired Lehman's international operations in late 2008 after

Lehman's parent company sought Chapter 11 bankruptcy protection, an action that added about

8,000 non-Japanese workers. For Nomura, the time seemed right to strengthen its global expansion

strategy. However, since the acquisition, cultural and business differences between the two organizations

have been a major stumbling block. Although blending two diverse cultures requires intentional efforts

when different organizations merge or are acquired, it's particularly challenging when the key assets in the

cross-border acquisition are the people employed by the organization being acquired.

Workplace tensions arose over executive compensation, how quickly decisions were made, and how

women were treated. For instance, during Nomura's initial training session for new hires, the men and

women were separated. The womenmany of whom had earned prestigious degrees from the likes of

Harvardwere taught how to wear their hair, serve tea, and choose their clothing according to the

season. The company's dress code was strictly interpreted for women, also. Women from Lehman were

told to remove highlights from their hair, to wear sleeves no shorter than mid-bicep, and to avoid brightly

colored clothing. Several women were sent home from the trading floor for dressing "inappropriately."

One said, "I was sent home for wearing a short-sleeve dress, even though I was wearing a jacket." A

Nomura spokesperson said, "The dress code is displayed on the company's intranet and is intended to

ensure that clients and colleagues don't feel uncomfortable."

Lehman bankers also said they found the process for getting approval on deals was "slower and

more difficult than it was at Lehman." Also, at Lehman, clients were categorized, in large part, by the

fees they paid. At Nomura, more emphasis was placed on other factors, such as the length of the

relationship. The bankers at Nomura said that "their new colleagues were too willing to dump loyal

clients for a quick profit."

In its defense, Nomura has tried to blend the two cultures. In offices in Europe and in Asia outside

of Japan, there's a mix of nationalities. Also, the company has promoted a handful of non-Japanese

employees to high-ranking positions. "To reduce the Tokyo-centric nature of the company, Hiromi

Yamaji, head of global investment banking, moved to London, and Naoki Matsuba, global head of

equities, moved to New York." Until March 2010, Nomura's executive committee was all Japanese

men. However, in an attempt to make the company more globally oriented, an ex-Lehman executive

and foreigner, Jasjit "Jesse" Bhattal, a native of India, was promoted to the committee. Nomura's

deputy president and chief operating officer, Takumi Shibata, said, "When your business is global,

management needs to be global."

Solve these questions:

1. What obvious cultural differences between Nomura and Lehman do you see in

this situation?

2. What global attitude do you think characterizes Nomura? Be specific in your

description. Do you see any evidence of that changing?

3. Do some cultural research on Japan and the United States. Compare those

cultural characteristics. What similarities and differences exist? How might these

cultural differences be affecting the situation at Nomura?

4. What could Nomura managers do to support, promote, and encourage cultural

awareness among employees? Explain.

5. What do you think the statement, "When your business is global, management

needs to be global," is saying? In your opinion, is Nomura doing this? Explain.