The past couple of weeks have been filled with press reports out of Japan about some Dentsu units there being involved in bid rigging related to the Tokyo Olympic and Paralympic Games. Some regional governments have already taken steps to ban the firm from bids on future contracts.
And the Tokyo prosecutor’s office is considering charges.
And Dentsu itself this week formed a committee to look into the situation, saying it takes the allegations “very seriously.”
The bid rigging contretemps is the latest scandal to haunt the firm’s Japan operation within the last decade.
In 2015 a young Dentsu female employee committed suicide on Christmas Day and Dentsu was later found to be culpable given the pressure on her to work excessive amounts of overtime. It’s a cultural phenomenon (“karoshi” translates to “overwork death”) that still plagues Japan to this day, despite regulations in place to curb it.
Dentsu was fined, settled with the family and instituted some workforce changes in the aftermath. Also company CEO Tadashi Ishii stepped down, accepting responsibility for the tragedy.
In 2017 the Japan unit was faced with another scandal, this time involving client overbilling. After press reports divulged the irregularities, the company formed a committee with outside help to get to the bottom of the mismanaged accounts. Reforms were put into place.
The young woman’s death was tragic and the billing scandal revealed ineptitude and flawed processes. But the latest charges cross the line into the potentially criminal.
Maybe Dentsu Japan should form a “Get A Grip” committee. To be fair, other (and smaller) agency groups have been implicated in the bid rigging affair. They’re not worth mentioning because they’re not industry leaders. Dentsu envisions itself as an industry leader. To fulfill that vision it needs to get its house in order.