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Deutsches Institut für Japanstudien

Management Careers, Internal Control and Corporate Governance. Where Japan and Germany Differ

Career concerns of managers function as an important control mechanism in the context of corporate governance. They bear important motivating and disciplining effects. In Japan, where – in the absence of a well-functioning external market – management careers have been generally restricted to in-house promotions, career concerns also result in efforts by middle management to exert control over and influence top management decisions as they impact their career perspectives.

Takaaki Eguchi’s paper explains the background and implications of such internal control mechanisms in Japan and points to their limitations in recent years given the increasing need for a stronger top management function. Reviewing relevant empirical research, Franz Waldenberger shows that managerial careers in Germany have long been embedded in an external market.