A New York Times reporter calls to solicit Don's reaction to rival agency Cutler Gleason and Chaough landing the Clearasil and Jai Alai accounts. "Every time Don Draper looks in his rearview mirror, he sees me," the reporter quotes CGC's Ted Chaough as boasting. "I've never heard of him," Don replies.
Pete arranges a meeting with the Honda motorcycle company, which is expanding into automobile production. Pete's "new yellow buddies," Roger protests, killed his friends during World War II. "The war is over," comments Bert. Pete says that he's reading the book The Chrysanthemum and the Sword to familiarize himself with Japanese customs.
Phoebe arrives at Don's apartment to watch Sally and Bobby while their father dines at Benihana. Don tells Sally that he has a date. "I don't like that," she says.
While Don is at dinner, Sally hacks off her hair. "You have short hair and Daddy likes it," she tells Phoebe. "Are you and Daddy doing it?" Sally asks.
At Benihana, Don and his date Bethany sit with other diners watching the tableside chef. Ted Chaough, also scoping out the Japanese restaurant, spots Don and goads him by predicting victory with Honda. "Who's he?" asks Bethany. "Some fly I keep swatting away," Don replies.
Back home, Don carps at Phoebe about the response he'll receive from Betty over Sally's hair.
Betty slaps Sally when she sees her hair. Little girls do things like this, counsels Henry. Punishment will only make matters worse. Smiling, Betty calls him soft.
At the office, the partners minus Roger greet two Honda executives and their translator, who explains the rules for a competition between the agencies for Honda's business. Roger arrives uninvited and insults the executives with references to atomic bombs and "Jap crap." Cooper humbly apologizes.
Pete accuses Roger of sabotaging him because new accounts reduce the agency's dependence on Lucky Strike and therefore Roger himself. Roger lunges at Pete, but Don intervenes.
At her friend Laura's slumber party, Sally lifts her nightgown while watching television. Laura's mother catches Sally and immediately drives her home. Privately, the mother notifies Betty that Sally was playing with herself.
"You don't do those things," Betty scolds Sally later. "You especially don't do them in public."
"It's one thing after another," Henry points out, suggesting that Betty seek professional help for Sally. Betty admits to having seen a psychiatrist herself. "I don't think it helps," she says.
Cooper informs his partners that the Japanese likely expect Sterling Cooper Draper Pryce to resign from the competition because of Roger's outburst. "Chaough wins another one by default," grumbles Don. To revive their chances, he proposes they violate the competition rules -- which limit the budget to $3,000 and prohibit finished work -- and shoot a splashy television commercial. Lane objects on financial grounds.
Don is reading The Chrysanthemum and the Sword when Betty calls about Sally. She insinuates that witnessing Don's bachelor life could be causing Sally's problems. "You brought another man into your house," Don retorts.
At work, Don quotes from The Chrysanthemum and the Sword: "A man is shamed by being openly ridiculed and rejected." Neither CGC nor SCDP can afford a commercial, Don continues, but if Chaough thinks that Don is shooting one, he'll follow suit. Pete frets that a fantastic commercial will deliver Chaough the account. "Let me worry about that," says Don.
Joan offers to hire a director who is already booked with CGC work for SCDP's Honda commercial. While they chat, Don wheels a red Honda motorcycle by the door.
The director alerts Chaough, who quickly envisions an elaborate commercial. He asks Smitty, now at CGC, how Don operates. "He definitely doesn't think the rules apply to him," says Smitty.
Peggy and Joey openly wheel the red Honda motorcycle into a television studio near one that Chaough has booked. Chaough's people try to enter the studio, but are turned away. Inside, Peggy rides the Honda in circles.
Back at the office, Don asks Faye why people "need to talk about everything." It makes them feel better, she responds. As they chat, Faye reveals that she pretends to be married to avoid "distracting conversations."
Don admits to feeling inadequate as a parent and mentions that Sally may see a psychiatrist. Faye offers encouragement, then excuses herself. "Fake dinner plans with your fake husband?" asks Don.
Betty visits Dr. Edna, a child psychiatrist. Betty explains that Sally has been "different" since Gene died. "I feel like Sally did this to punish me," says Betty. They set up sessions for Sally starting at four days a week.
Chaough gloats to Don after unveiling his commercial. Don faces the Honda executives and chides them for not following their own rules. Presenting a check for $3,000, he withdraws SCDP from the competition.
At the office, Roger bemoans the deaths of his war buddies to Joan, who tells him to stop feeling sorry for himself.
Pete and Lane inform Don that he charmed the Japanese executives; SCDP has a shot at Honda's automobile account, and CGC is out. Lane takes credit for permitting Don's "unseemly" stunt. He could have canceled the studio rental, he says, but "I realized that our financial future was related to Mr. Chaough's demise."
Carla and Sally sit in Dr. Edna's waiting room. A boy emerges from the office. "Hello, Sally," says the doctor. "Why don't you come inside?"