The Sogo Shosha

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The Sogo Shosha

There are thousands of trading companies in Japan today, but only a few hundred are engaged in foreign trade. Amongst them are the sogo shosha, which are Japanese general trading companies. In 1993, there are only 16 sogo shosha in Japan (Shao and Herbig, 1993, p.37). These sogo shosha, whether compares with Japanese or non-Japanese trading companies, are 'unique in terms of the scale of transactions, the almost infinite number of products they handle, the global spread of their business, the multiple types of their trade, and, equally important, in terms of the services they provide and the enormous resources they command for conducting and expanding their business' (Young, 1979, p.19). A few of the services offered by the sogo shosha are such as financial services, information services, risk reduction services, organizational and coordination services, human resources, global commercial network to name a few. The sogo shosha are 'an important economic institution the Japanese have devised and refined to serve their national and corporate needs' (Young, 1979, p.19).

The link between the Keiretsu and their associate Shosha

Most Japanese firms are linked through long-standing networks of reciprocal ties. The networks that are the most formal are called keiretsu. The sogo shosha then becomes the eyes and ears for the keiretsu, identifying new products and technologies for Japan and thus taking up the role as a 'global purchaser and marketer for keiretsu members' (Lairson, p.1). They provide four important financial services the keiretsu namely 'supplying up-to-date information to the keiretsu about global markets, supply information to potential foreign exporters, auxiliary services and capital efficiency services' (Shao and Herbig, 1993, p.41). As the sogo shosha has such a vast network globally, they 'serve as an information system to their keiretsu and bank' (Herbig, 1993, p.2). Various types of...