How much authority to entrust to the Japan office is an important decision that bears on both the speed of the business and headquarters' governance. When the scope of authority is vague, it leads to slow decisions and unclear responsibility.
- The range of Japan office decisions needing headquarters approval is too wide
- The scope of authority is not documented, and judgments change each time
- Headquarters cannot fully trust the Japan office's judgment
- It is unclear how to decide the scope of authority to hand over
This article explains how much authority to give the Japan office, and how to think about dividing roles with headquarters.
Why the Scope of Authority Affects the Business
In the Japanese market there are many situations requiring quick judgment, such as deals and hiring. When approvals take time, opportunities are lost and candidates and business partners drop away.
For headquarters, on the other hand, a certain level of involvement is needed from the standpoint of governance and risk management. The scope of authority needs to be decided by balancing both.
Perspectives for Sorting Out Authority
Sort out the scope of authority by area, from perspectives like the following.
| Perspective | What to Organize |
|---|---|
| Amount and scale | What the Japan office can decide and what needs headquarters approval, according to the amount of contracts and spending |
| Scale of risk | How to handle high-impact matters such as legal, tax, and compliance |
| Dependence on the Japan market | Matters that depend strongly on Japanese circumstances, such as hiring, deal terms, and pricing |
| Japan office capability | Whether the current team and experience can judge responsibly |
| Reporting | Frequency and content of reports after decisions, and the mechanism for checking |
Review in Stages
Authority is not set once and left; widen it in stages as the Japan office's structure and track record grow. A realistic approach is to start with a narrow scope and expand while watching the quality of judgment and reporting.
Document the agreed scope and share it between headquarters and the Japan office. Deciding in advance how to handle exceptional cases makes judgment less uncertain.
Summary
- The scope of authority bears on both the speed of the business and headquarters' governance
- Sort it out by area using amount, risk, dependence on the Japan market, capability, and reporting
- Widen authority in stages according to the Japan office's structure and track record
- Document the agreed scope and decide in advance how exceptions are handled
Contact
JBN supports foreign companies' Japan offices from sorting out roles and authority with headquarters through to building the structure.
To discuss sorting out authority and roles, please contact us.