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A Qualitative Study on Hedge Fund Activism in Japanese Corporations

Nguyen, Julien LU ; Byars, Oliver Toivo LU and Åberg, Victor LU (2025) IBUH19 20251
Department of Business Administration
Abstract
This study investigates the activist engagement strategies of U.S.-domiciled hedge funds when engaging with Japanese firms. The study forms a comparison of the engagement strategies both before Japan’s 2015 Corporate Governance Code and after. To create this comparison, two campaigns were examined. First, the U.S.-domiciled hedge fund Steel Partners and its campaign against Japanese firm Bull-Dog Sauce Ltd. from 2007 was selected to explore this dynamic before the Corporate Governance Code. Then, the case of the U.S.-domiciled hedge fund ValueAct Capital and the Japanese firm Seven & i Holdings from 2022, represented the engagement from after the Corporate Governance Code.
The study employed a qualitative document analysis, further... (More)
This study investigates the activist engagement strategies of U.S.-domiciled hedge funds when engaging with Japanese firms. The study forms a comparison of the engagement strategies both before Japan’s 2015 Corporate Governance Code and after. To create this comparison, two campaigns were examined. First, the U.S.-domiciled hedge fund Steel Partners and its campaign against Japanese firm Bull-Dog Sauce Ltd. from 2007 was selected to explore this dynamic before the Corporate Governance Code. Then, the case of the U.S.-domiciled hedge fund ValueAct Capital and the Japanese firm Seven & i Holdings from 2022, represented the engagement from after the Corporate Governance Code.
The study employed a qualitative document analysis, further supplemented by an Applied Thematic Analysis. Institutional logics theory was utilized as a lens to analyze the hedge funds’ framing strategies. The theory assisted in forming three core institutional logics: shareholder logic, stakeholder logic and stewardship logic, which were all strategically blended by the hedge funds in their engagement strategies.
The findings showed that both hedge funds employed a stakeholder and stewardship logic to signal cultural embeddedness and legitimacy. Steel Partners' engagement strategy did reflect symbolic compliance but it still emphasized shareholder primacy which weakened its legitimacy ultimately causing the campaign to fail. ValueAct Capital’s engagement strategy integrated a more hybridized logic blending approach, highlighting stakeholder concerns, and long-term performance. This normatively aligned with Japanese governance norms, making the campaign more successful.
The contributions of the study surrounded a better understanding of cross-border shareholder activism, specifically looking at engagement from the U.S. to Japan. This study highlighted the role that institutional logic blending played in forming more successful engagement strategies as they more effectively overcome institutional barriers. Lastly, the paper indicated the influence that Japan’s Corporate Governance Code had on activist engagement. (Less)
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author
Nguyen, Julien LU ; Byars, Oliver Toivo LU and Åberg, Victor LU
supervisor
organization
course
IBUH19 20251
year
type
M2 - Bachelor Degree
subject
keywords
Shareholder activism, hedge funds, corporate governance, institutional logics, Japan, Corporate Governance Code, applied thematic analysis
language
English
id
9204166
date added to LUP
2025-06-23 10:55:20
date last changed
2025-06-23 10:55:20
@misc{9204166,
  abstract     = {{This study investigates the activist engagement strategies of U.S.-domiciled hedge funds when engaging with Japanese firms. The study forms a comparison of the engagement strategies both before Japan’s 2015 Corporate Governance Code and after. To create this comparison, two campaigns were examined. First, the U.S.-domiciled hedge fund Steel Partners and its campaign against Japanese firm Bull-Dog Sauce Ltd. from 2007 was selected to explore this dynamic before the Corporate Governance Code. Then, the case of the U.S.-domiciled hedge fund ValueAct Capital and the Japanese firm Seven & i Holdings from 2022, represented the engagement from after the Corporate Governance Code. 
The study employed a qualitative document analysis, further supplemented by an Applied Thematic Analysis. Institutional logics theory was utilized as a lens to analyze the hedge funds’ framing strategies. The theory assisted in forming three core institutional logics: shareholder logic, stakeholder logic and stewardship logic, which were all strategically blended by the hedge funds in their engagement strategies. 
The findings showed that both hedge funds employed a stakeholder and stewardship logic to signal cultural embeddedness and legitimacy. Steel Partners' engagement strategy did reflect symbolic compliance but it still emphasized shareholder primacy which weakened its legitimacy ultimately causing the campaign to fail. ValueAct Capital’s engagement strategy integrated a more hybridized logic blending approach, highlighting stakeholder concerns, and long-term performance. This normatively aligned with Japanese governance norms, making the campaign more successful. 
The contributions of the study surrounded a better understanding of cross-border shareholder activism, specifically looking at engagement from the U.S. to Japan. This study highlighted the role that institutional logic blending played in forming more successful engagement strategies as they more effectively overcome institutional barriers. Lastly, the paper indicated the influence that Japan’s Corporate Governance Code had on activist engagement.}},
  author       = {{Nguyen, Julien and Byars, Oliver Toivo and Åberg, Victor}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{A Qualitative Study on Hedge Fund Activism in Japanese Corporations}},
  year         = {{2025}},
}