Japan and Mr. Prescott

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In the fall of 1962, Mr. Leonard Prescott, vice-president and general manager of the Weaver-Yamazaki Pharmaceutical Company Ltd. of Japan, was considering what action, if any, to take regarding his executive assistant, Mr. John Higgins. In Mr. Prescott's opinion, Mr. Higgins had been losing his effectiveness as one who was to represent the U.S. parent company because of his extraordinary identification with the Japanese culture. The Weaver Pharmaceutical Company was one of the outstanding concerns in the drug field in the United States. As a result of extensive research it had developed many important drugs and its product lines were constantly improved, giving the company a strong competitive advan­tage. It also had extensive international operations throughout many parts of the world. Operations in Japan started in the early 1930's, though they were limited to sales activities. The Yamazaki Pharmaceutical House, a major pro­ducer of drugs and chemicals in Japan, was the franchise distributor for Weaver's products in Japan. Export sales to Japan were resumed in 1948. Due to its product superiority and the inability of major Japanese pharmaceutical houses to compete effectively because of lack of recovery from war damage, the Weaver Company was able to capture a substantial share of the market for its product categories. In order to prepare itself for increasingly keen competition from Japanese producers in the foreseeable future, the company decided to undertake local production of some of the product lines. From its many years of international experi­ence, the company had learned that it could not hope to establish itself firmly in a foreign coun­try until it began manufacturing locally. Consequently, in 1953 the company began its preliminary negotiations with the Yamazaki Company Ltd., which culminated in the establishment of a jointly owned and operated manufacturing subsidiary. The company, known as the Weaver-Yamazaki Pharmaceutical Co, Ltd. of Japan, was officially organized in the summer of 1954. Initially, the new company only manufac­tured a limited line of products. However, through the combined effort of both parent com­panies, the subsidiary soon began to manufacture sufficiently broad lines of products to fill the general demands of the Japanese market. For the last several years, importation from the United States had been limited to highly spe­cialized items. The company did a substantial amount of re­search and development work on its own, though it was coordinated through a committee set up by the representatives or both parent com­panies to avoid unnecessary duplication or re­search effort. The R&D group at the subsidiary had turned out a substantial number of new products, some of which were marketed successfully in the United States and elsewhere. The management of the Weaver Company looked upon the Japanese operations as one of the most successful international ventures it had undertaken. It felt that the future prospect looked quite promising with steady improve­ment in the standard of living in Japan. The subsidiary was headed by Mr. Shozo Suzuki, as president, and Mr. Leonard Prescott as executive vice-president. Since Mr. Suzuki was executive vice-president of the parent com­pany and also was president of several other subsidiaries, his participation in the company was limited to determination of basic policies. Day-to-day operations were managed by Mr. Prescott as executive vice-president and general manager. He had an American executive assis­tant, Mr. Higgins, and several Japanese directors who assisted him in various phases of the oper­ations. Though several other Americans were assigned to the Japanese ventures, they were primarily concerned with research and develop­ment and held no overall management responsi­bilities. The Weaver Company had a policy of moving American personnel around from one foreign post to another with occasional...
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