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The end product: An insider

Hiro trained with the department for a time, then rotated through jobs there, as a market analyst and a trader. Financial markets proved to be a competitive arena quite different from the relationship-dominated world of commercial banking; as a result, the local culture of the Securities Department was vastly different from that of Ringo's branches. Hiro missed the challenge of probing relationships for weak spots and opportunities. However, he found that commercial banking and securities trading shared an important common thread: that Ringo's internal, organizational logic, not profit maximization, drove most decisions.

One February morning, the departmental controller called Hiro, whose job was trading American stocks, into his office. "What the hell did you do yesterday?" he screamed at Hiro. "I made some trades and lost some money," Hiro replied. The controller was far more irritated than the actual loss seemed to justify. It turned out that, two days previously, the controller had negotiated with the department manager a revised budget that could be achieved if the department sat tightly on its present positions. Hiro's loss had damaged the plan. The controller said to Hiro, "Meeting the budget is our top priority. The budget of each department aggregates to the budget of the bank. You'd better understand that you're ruining this process." Hiro replied, "As a trader, my job is to go into the market and try to make money. We still have almost two months before our fiscal year ends. Are you saying I shouldn't even make money because it will affect the budget?" "Yes:' answered the controller, "that's exactly what I'm saying!"

On another occasion, Hiro was part of a team that was trying to develop new products for Ringo. The team came up with a fairly simple idea that involved combining two different futures contracts to create an arbitrage position. A number of the bank's non-Japanese competitors were making money with similar strategies, and it seemed likely that the arbitrage opportunity would be profitable for Ringo. When the team presented the idea to senior managers, however, it proved impossible to implement, because the two different futures were traded by two different departments. In an arbitrage position, one typically makes money on one contract and loses money on the other. This would mean that one department would profit and one would lose, and neither department wished to risk a loss, despite the high probability that Ringo would make money overall.

Hiro is now in his early thirties. He has been with Ringo just over ten years and is due to become a manager, climbing the next rung on the salaryman's ladder. He is still assigned to the Securities Department, although he personally prefers branch banking and believes his skills would serve the bank better there. Hiro married his college sweetheart in his late twenties and moved out of the company dormitory. After ten years, he is a moderately competent salesperson, a moderately competent securities analyst, and a moderately competent trader. He is extremely competent at being a Ringo Bank insider. He understands vastly more now about Ringo's organizational imperatives than he did as a greenhorn, and his increasing command of Ringo's internal logic has helped him develop a sixth sense, an ability to predict how an idea will be received within the bank. Now more than ever before, he is locked into working for Ringo, because his most highly polished, most useful skills would be worth little in another environment.

Salarymen share certain basic behavioral imperatives because they have been molded and shaped by experiences like Hiro's. In the next chapter, we will focus on four themes that will help Western readers understand Hiro's worldview better, allowing them to grasp why behavior that seems puzzling to outsiders makes perfect sense to him and his fellow salarymen.

Excerpted from Inside the Kaisha: Demystifying Japanese Business Behavior, Chapter 1, by Noboru Yoshimura and Philip Anderson (c. President and Fellows of Harvard College, 1997 ).

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