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International Arena Series

Shoei Utsuda
Chairman of the board of directors, Mitsui & Co. LTD.

October 12, 2010

Before a packed classroom at the Tuck School of Business, Mr. Shoei Utsuda, Chairman of the Board of Japan’s Mitsui & Co., explained the model of sogo shosha, or “general trading companies,” a staple of Japanese economy. In 2009, the revenues of Japan’s seven sogo shosha, which he described as uniquely Japanese organizations, comprised about one sixth of the country’s GDP. Mitsui is Japan’s second-largest sogo shosha, with 2010 revenues of US$44B and 41,000 employees worldwide.

Shoei Utsuda at Tuck

Sogo shosha consist of multiple operating companies in a wide range of industries that are connected through cross-ownership and interlocking directorships. They emerged during the 1940s to meet the basic needs of the Japanese people after the devastation of World War II and promote growth in light industries. They have evolved over the years, and today play a critical role in ensuring stable supplies of energy and natural resources for Japan.

Mr. Utsuda pointed to several reasons for the survival of sogo shosha as Japan’s economy boomed, matured, and then stagnated. Unlike conglomerates, sogo shosha view people as their greatest assets, and avoid investing heavily in plants and equipment. This enables them to enter and exit businesses quickly and flexibly. Unlike investment banks, sogo shosha participate actively in the management of their portfolio companies, and draw on their vast corporate inter-relationships to ensure financing, markets, and sources of supply for the projects that they undertake.

Mr. Utsuda closed by talking about Yoi Shigoto or work that benefits society, customers, and partners, a concept that he has used to reshape the company’s corporate culture following several ethics scandals over the past decade. Mr. Utsuda emphasized that with people and relationships at the heart of its business, the scandals could have destroyed the company. Thus, he hopes that Yoi Shigoto will provide the foundation for the next stage in Mitsui’s continual evolution.

by: Lisa Miller, Executive Director, CIB

photos by: Joseph Mehling, Dartmouth '69