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Nomura's Cultural Challenges Post-Lehman

Nomura Holdings acquired Lehman Brothers' international operations in 2008 after Lehman filed for bankruptcy. However, blending the Japanese and American cultures has proven difficult, with tensions arising around executive compensation, decision-making speed, and treatment of women. Nomura's strict dress code and separation of men and women during training sessions contrasted sharply with Lehman's culture. Question 2: Some obvious cultural differences between Nomura and Lehman include Nomura's more conservative dress code for women and hierarchical decision-making process compared to Lehman's more casual culture and emphasis on client relationships over nationality. Question 3: Initially, Nomura seemed to take a very Japan-centric approach, with an all-Japanese male executive committee

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Kobenan Yann-Cedric Kossonou
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87 views1 page

Nomura's Cultural Challenges Post-Lehman

Nomura Holdings acquired Lehman Brothers' international operations in 2008 after Lehman filed for bankruptcy. However, blending the Japanese and American cultures has proven difficult, with tensions arising around executive compensation, decision-making speed, and treatment of women. Nomura's strict dress code and separation of men and women during training sessions contrasted sharply with Lehman's culture. Question 2: Some obvious cultural differences between Nomura and Lehman include Nomura's more conservative dress code for women and hierarchical decision-making process compared to Lehman's more casual culture and emphasis on client relationships over nationality. Question 3: Initially, Nomura seemed to take a very Japan-centric approach, with an all-Japanese male executive committee

Uploaded by

Kobenan Yann-Cedric Kossonou
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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It’s not always easy to do business globally, as executives at Japanese brokerage firm Nomura Holdings Inc.

are
discovering. 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
women—many of whom had earned prestigious degrees from the likes of Harvard—were taught how to wear their hair,
serve tea, and choose their clothing according to the season. The company’s dress code for women was also strictly
interpreted. 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.” Two years
later, unable to garner support from Tokyo for an overhaul of the global wholesale-banking operations, however, Bhattal
recently resigned as Nomura’s highest-ranking foreign executive.

Question 1: Summarize the case study in three sentences maximum. Make sure that all the key facts are included in your
summary.

Question 2: What obvious cultural differences between Nomura and Lehman do you see in this situation?

Question 3: What global attitude do you think characterizes Nomura? Be specific in your description. Do you see any
evidence of that changing?

Question 4: 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?

Question 5: What could Nomura managers do to support, promote, and encourage cultural awareness among
employees? Explain.

Question 6: 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.

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