THE INVISIBLE LINK: Japan's Sogo Shosha and the Organization of Trade

A searching examination of Japan's multinational trading companies (sogo shosha) which, for all the wealth of detail it offers, is more an academic exercise than guide for Western business. As Yoshino (a professor at Harvard Business School) and Lifson (an associate in Harvard's Program on US-Japanese Relations) make clear, sogo shosha are peculiarly Japanese enterprises, deeply rooted in socioeconomic culture and without exact counterparts in either North America or Western Europe. The authors focus on the six largest--Mitsui, Mitsubishi, C. Itoh, Marubeni, Sumitomo, and Nisso-Iwai. The emergence of sogo shosha dates back to the Meiji Restoration when the emperor decreed the domestic economy should be industrialized. Latter-day sogo shosha engage in commercial activities ranging from the procurement of raw materials through the marketing of finished goods around the world. Archetypal intermediaries, they are deeply involved as well in credit, finance, transport, warehousing, intelligence gathering, technology transfer, and allied aspects of international trade. They may have equity interests in ventures important to their networks, but seeing to others' imports and exports is what they really are about. Notwithstanding their global reach, sogo shosha may have trouble thriving, even surviving, in a brave new world that puts a greater premium on knowledge-based services than, say, the ability to schedule bulk commodity shipments on an efficient basis. At least partly responsible for the firms' limited capacities to respond effectively to change, the authors suggest, are corporate structures akin to those of an extended patriarchal family. Yoshino and Lifson probe these constraints at some length; they also cover other institutional practices which confirm the suspicion that sogo shosha are sui generis. For most lay readers, then, the accessible text will be more a matter of interest than urgency.