In the fall of 1962, Mr. Leonard Prescott, vice-president and general manager of the Weaver-Yamazaki Pharmaceutical Company Ltd. of Japan, was considering what action, if any, to take regarding his executive assistant, Mr. John Higgins. In Mr. Prescott's opinion, Mr. Higgins had been losing his effectiveness as one who was to represent the U.S. parent company because of his extraordinary identification with the Japanese culture.
The Weaver Pharmaceutical Company was one of the outstanding concerns in the drug field in the United States. As a result of extensive research it had developed many important drugs and its product lines were constantly improved, giving the company a strong competitive advan¬tage. It also had extensive international operations throughout many parts of the world. Operations in Japan started in the early 1930's, though they were limited to sales activities. The Yamazaki Pharmaceutical House, a major pro¬ducer of drugs and chemicals in Japan, was the franchise distributor for Weaver's products in Japan.
Export sales to Japan were resumed in 1948. Due to its product superiority and the inability of major Japanese pharmaceutical houses to compete effectively because of lack of recovery from war damage, the Weaver Company was able to capture a substantial share of the market for its product categories. In order to prepare itself for increasingly keen competition from Japanese producers in the foreseeable future, the company decided to undertake local production of some of the product lines.
From its many years of international experi¬ence, the company had learned that it could not hope to establish itself firmly in a foreign coun¬try until it began manufacturing locally. Consequently, in 1953 the company began its preliminary negotiations with the Yamazaki Company Ltd., which culminated in the establishment of a jointly owned and operated