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INTRODUCTION
More than 8,000 trading companies exist in Japan today, but only a few hundred are engaged in foreign trade. Most are senmonshosha (specialized trading firms); only 16 are sogo shosha. Sogo means "general" and shosha is a trading company, hence the sogo shosha (Japanese General Trading Companies) handle a wide range of products. What makes these 16 firms unique are their size, scope, information gathering capabilities and functional diversity. Traditionally, domestic wholesalers of Japan, or Tonya, specialize in a particular operation. The General Trading Companies (GTCs) are huge wholesale intermediaries that exist between large manufacturers and small producers. They supply large volumes of raw materials and distribute goods from large manufacturers to smaller distributors to numerous retailers (Young, 1979). A GTC is an economic organization whose functions consist of minimizing risks involved in transactions through its ability to distribute risks, reducing transaction costs via its ability to take advantage of economies of scale, and making efficient use of capital (Yamamura, 1985). Sogo shosha are Japanese traders, existing at the centre of Japan's global economic effort, and serving as intermediaries for half of their country's exports and two-thirds of their imports.
The GTCs handle more than half of Japan's total foreign trade and much of their domestic transactions. The total annual domestic sales of the nine largest sogo shosha amount to 31 per cent of Japan's gross national product. In 1984, the largest GTC, Mitsubishi Corporation, had total sales exceeding $69 billion, making it the biggest company in Japan and third largest in the entire world. Its profits though were only $190 million, thus producing a dismal 0.274 per cent return. In 1988, Mitsui had $150 billion in sales, employed 12,000 people worldwide, had equity investments in 620 companies in Japan and 320 abroad. This GTC accounted for 5 per cent of the Japanese GNP (Dicle and Dicle, 1990). Collectively they are the largest purchasers of US exports in the world, accounting for 10 per cent of total overseas sales and 4 per cent world trade (Yoshino, 1986). The top nine companies--Mitsubishi, Mitsui, Marubeni, C. Itoh, Sumitomo Shoji, Nissho Iwai, Tomen, Kanematsu Gosho, Ataka and Nichimen Jitsugyo--maintain approximately 1,110 offices in over 200 cities around the world and staff more-than 20,000 highly-trained specialists who each...