How Japan’s Recruit Holdings Regained Trust after a Scandal

Cold Call

Recruit Holdings, an advertising media, staffing, and business support conglomerate was founded in Japan in 1960 by Hiromasa Ezoe. The company was built on the principle that the company should add value to society. But in 1988, Recruit hit rough waters when Ezoe sold 2.8 million shares in a subsidiary before it went public to 76 Japanese leaders in politics, business, and media. The “Recruit Scandal,” as it was called, resulted in the resignation of Japan’s prime minister and his entire cabinet.

Thirty years later, Recruit has become a global conglomerate, with $16 billion in sales in 2017. How did the company not only survive, but thrive after its insider trading scandal? Harvard Business School professor Sandra Sucher examines how Recruit’s unique corporate culture helped to restore lost trust in her case, “Globalizing Japan’s Dream Machine: Recruit Holdings Co., Ltd.,” and her book, The Power of Trust.