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United States narrowly nationalistic?

Daniel Sneider San Jose Mercury News

Consider this improbable scenario: the Hewlett-Packard corporation announces it is appointing a Chinese electronics entrepreneur to replace Carly Fiorina as its new chief executive office. At the introductory press conference, his remarks have to be translated from Chinese because he doesn’t speak English.

My guess is that the reaction in Silicon Valley and in the United States would be one of shock and, in some camps, outright hostility. Voices would be raised about the foreign takeover of a leader of American innovation.

Yet when Sony, probably the most widely known Japanese technology firm around the world, announced last week that a foreigner would run the company, it drew barely a shrug in Tokyo.

Americans like to think of themselves as being far more open to change, certainly more global in their outlook than island-bound Japan. American multinational corporations stride the globe, the corporate accompaniment to the unparalleled military and strategic domination of the United States.

But the Sony case suggests that the United States may be more insular, perhaps even more narrowly nationalistic, than Japan these days, and that Americans are even more resistant to the winds of globalization than the blue-suited Tokyo salarymen who have long been derided as the paragons of conformity.

Some may say this is an unfair comparison. After all, Sony does about 70 percent of its business outside of Japan. The new CEO is Howard Stringer, a Welsh-American who heads Sony’s U.S. music and film operations. Sony has always been a maverick, far more willing to take risks than staid electronic rivals such as Matsushita, the parent of Panasonic.

But HP is no less global in its business dealings than Sony. Last year almost two-thirds of its sales were outside the United States, and its foreign sales over the past two years have grown at twice the rate of its domestic sales. From production plants in Shanghai to labs in Bangalore and Tokyo, its operations are spread across the globe. Yet its board of directors is composed entirely of Americans.

In contrast, Sony was among the first Japanese firms to bring outsiders, and foreigners, onto its board, including Peter Peterson, the head of the private equity firm Blackstone Group. Board meetings are conducted in English.

Of course, many Silicon Valley firms have a strong foreign presence in their leadership. And Sony has always been more global in its outlook and in its management style than most Japanese firms, even those with large overseas sales and operations.

But the idea of a foreigner at the head of a Japanese firm is hardly unprecedented. Sony’s board, for example, includes Carlos Ghosn, a Brazilian-born Frenchman, who has become a superstar in Japan for turning around the Japanese automaker Nissan.

Much of this is the product of necessity. The bursting of Japan’s speculative bubble in 1990 and the years of stagnation that followed made the Japanese more ready to open their doors. Firms such as Nissan were in deep trouble and were pushed by foreign partners. Sony is facing huge competitive challenges in its core businesses.

There is still plenty of resistance to foreign takeover of Japanese firms and markets. Foreign direct investment in Japan has increased significantly, but it is still tiny by international standards.

Prime Minister Junichiro Koizumi says he wants to double foreign investment in Japan and backed a plan to let overseas firms buy Japanese companies by swapping shares, a common practice elsewhere. But members of the conservative ruling Liberal Democratic Party, representing some Japanese corporate interests, are moving to block the passage of a law to allow this.

Still, more and more Japanese share the feelings of a young man who was asked for his opinion about Sony’s shift in leadership.

“We no longer have a problem with a foreigner having power over a Japanese company,” he told a Japanese newspaper. “When a company needs help, I don’t think it matters who you are or where you are from.”

And if Stringer succeeds, Sony will have proven it still deserves its reputation as a vanguard of the future in Japan.

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