'No' Examples

EXAMPLE 1 - HOLDING STEADY

FROM $8 MILLION TO A BILLION DOLLARS IN SEVEN YEARS

In 1986, the owners of an American trading company, which had been operating in Japan through an $8 million branch were considering listing its shares on the Tokyo Over-The-Counter (OTC) Market. The Japan Securities Dealers Association (JSDA) at first took the position that this was impossible (a 'no'), because the company was not public in its own jurisdiction. This dealt the coup de grace to any interest within the American investment banking community. Not one American investment banker could see how a private, unknown trading company with no products of its own and contracts terminable at three months' notice could possibly go public on the Tokyo OTC.

The company's owners accepted the JSDA's 'no' openly, without remonstration and reacted by a letter, which was presented to some of the key decision makes at the Association. the letter pointed out that under the NASDAQ rules, Japanese companies could list their shares in the United States, even though they were not publicly held in Japan. A copy of this letter was sent to the U.S. Treasury Department, which had just negotiated concessions from the Japanese government for the liberalization of the Japanese financial markets.

A picture began to take shape in the mind of the decision makers in the Association, of increasing nuisance, complaint, possibly even retaliation. In the comfort of their 'no', they began to doubt, and then to look for a less costly way of handling the dispute. Shortly after, an exception was somehow discovered in the Association's 'administrative guidance' (unwritten rules) for the case.

In the ensuing months, the American company received a great number of other 'no's', taking them all in good humor. Three years later, the company registered its stock on the OTC with a capitalized value exceeding $500 million. Seven years later the company was worth a billion dollars and in 1994, despite the collapse of Japan's economic bubble, the owners sold the company for $1.25 billion.

EXAMPLE 2 - CHANGING COURSE

Some years ago when the author of this program was teaching at the Harvard Law School, his home institution, the University of Hawaii issued an ultimatum: either return at the end of the first year and resume teaching at the University (which would have meant interrupting his teaching program at Harvard and the preparation of his book), or relinquish tenure. After a moment's reflection the author decided to remain at Harvard. Which was the "better" choice? Certainly life in Hawaii was comfortable, but would submitting docilely to the University's inflexible 'no' and hanging onto tenure really have been worth the price of foregoing so much life experience and adventure?

EXAMPLE 3 - THE PRICE OF 'NO'

A player is negotiating over the terms of his engagement to give a seminar on the Japanese negotiating code in Washington. The sponsor refuses to clarify the details of the engagement, particularly the question of whether there will be a minimum guarantee and the details of expenses. The first player demurs (exercises his 'no'). The conference sponsor decides to call off the event (a 'no').

The player moves on to other opportunities but at the same time keeps the benefits of the event (and the loss of these benefits) clearly in the minds of the sponsors: how the event might have contributed to the prestige and visibility of the Institute, how it might have attracted other corporate sponsors, and most importantly (to the sponsors) how the Institute itself might contribute to resolving some of the substantive issues to be covered by the program. After several months of episodic discussions an agreement is finally reached. The agreement clarifies the original understanding but increases the promotional budget and ads the proviso that the travel expenses of the speaker's partner, who will contribute significantly to the event, will also be covered.

EXAMPLE 4 - VERIFYING THE 'NO'

In some societies such as Japan one does not always know when another player is expressing a 'yes,' a 'maybe,' or a 'no.' (See also Check Point).

Some years ago a Silicon Valley-based company decided to discontinue its plans for an initial public offering (IPO) in Japan. Although the head of the company's Japanese operations (a Japanese national) appeared to go along with the American parent's decision, his actions proved otherwise. He continued to plan the IPO with the underwriter. He installed his own controller. He purchased land for a new laboratory which was really unnecessary except to build up the hard assets as window dressing for the Japanese subsidiary's balance sheet. On the surface he appeared to be giving a 'yes.' Below the surface he knew -- although the president and other top decision makers in the American company failed to see -- that he was essentially refusing to go along with the new change in policy.