Japan's 300 year old Companies are Values Driven

Japan has many enduring companies with over 300 years of history.

What unites them is the set of values which they hold dear.

Comparing these values to the principles of leading companies around the world, GLOBIS students discovered that there are many similarities.

Examples of common values:
• Putting the customer first
• Valuing people
• Treating the local region with respect
• Obeying laws.

Some companies take these principles even further.

Sake brewer Gekkeikan (founded 1637) aims to treat all their employees with respect—performing Buddhist memorial services annually for every former employee that has passed away.

This simple act shows that the company treats their staff with respect for their entire lives.

This policy of “valuing employees for their whole lives—and even longer” goes above and beyond normal company policies.

Charity is another area where companies can do good.

In many businesses, donations are made when times are good but tend to stop when business turns bad.

However, enduring companies continually make donations and contribute to the community, regardless of business conditions.

Further, they also emphasize long-term coexistence with business partners.

Even if there is a short-term loss, they decide that “since we have benefitted from their assistance in the past, it is OK for us to incur a loss now, in order for us to have a lasting relationship.”

These sets of values spread to business partners, clients, employees and beyond.

From CSR to CCV

Although long-lasting companies are conscious of Corporate Social Responsibility, we found that they actually go above and beyond CSR.

We call this "Community Coexistence Value Management (CCV)."

The mere existence of these companies provides value to the local community.

For example, Gekkeikan holds a deep sense of gratitude toward the regions where they operate.

Historically, presidents of Gekkeikan have served on over 80 official posts in local regions and industries.

They are constantly planning ways to give back to the community, donating money to build fire stations and hospitals, even setting up scholarships for local students.

Because of all this, Gekkeikan has become an invaluable part of the local community.

CCV can be thought of in broader terms, especially in global management.

For decades, Japanese companies have built factories across Southeast Asia and China.

If these companies were branching out simply because labor costs are cheaper, they would never earn the respect of the local people, nor be able to retain talented workers.

True globalization must continuously and consistently provide value to local areas, during good times and bad. In turn, both sides can mutually reap the benefits.

One example springs to mind.

In Thailand in 2011 immediately after a huge flood, Akio Toyoda, the president of Toyota Motor Corp., went to the affected areas and said:

“No matter what happens, we will not abandon this land.”

President Toyoda must have been aware of the fact that you cannot practice sound management only during the good times.

It is when crisis strikes that corporations can truly take the lead.

Good Governance is Essential

All companies want to avoid scandals.

However, studies show that companies with over 300 years of history tend to have governance systems based on extremely high ethical standards.

For example, if you contribute to a local region by hosting a festival, you gain the trust of the people.

When a person gains somebody’s trust, they tend to shy away from bad behavior.

Although the culture of “shame” in Japan may play a role here, a system that continually encourages ethical behavior has been established throughout the company.

This is critical.

Many enduring companies also treat traditional customs such as Shinto and Buddhist rituals with the utmost respect.

Soy sauce manufacturer Higeta Shoyu (founded in 1606) has an in-house Shinto shrine.

Through this, they acknowledge the existence of God every day.

Newer companies as well—household names such as Sony, Panasonic, and Kao—also maintain shrines in the workplace.

This idea, found in many Japanese companies, is to be humble by constantly acknowledging something greater than yourself.

Nurturing People is a Must

There is a common keyword among enduring companies regarding nurturing people.

That is the “apprentice system.”

At trading company Okaya & Co., Ltd. and architecture firm Takenaka Corporation, all new hires enter a dorm as apprentices.

This encourages team spirit and helps foster good communication among employees.

Even after the advancement of mechanization, sake maker Gekkeikan continues to teach their new hires the traditional ways of making rice wine.

Yamato Intec, a cast metal company in Nagano, forces all new staff to work in their factory for five years, regardless of their position or academic background.

Apparently, after these five years have finished, everybody in the company likes the smell of cast metal!

Until recently, lengthy training periods, sports festivals, and clubs were seen at all companies in Japan.

Many of these activities have been abolished to reduce costs.

As a result, many companies are struggling with problems such as a lack of communication between employees.

As illustrated above, enduring companies continue to respect traditional values often overlooked by newer firms.

In other words, values help drive companies, bringing successes beyond the bottom line.

As Dean of the Japanese program at the Graduate School of Management, GLOBIS University, and as Managing Director at the GLOBIS Management School, Yoshihiko Takubo is involved in project planning, management, research, and development of study materials. he also serves as a lecturer for the Analytical Skill Courses and the Leadership Development Courses. In 2012 he served as Vice Chairman of the Committee on Educational Issues at the Japan Association of Corporate Executives. Mr. Takubo has written Communicating Through Numbers, Lay The Groundwork For Your Business and GLOBIS MBA Critical Communication (all published by Diamond, Inc.). He also co-translated Cultivate your Kokorozashi (Toyo Keizai Inc.), The Grand Design for the New Century (Nihon Keizai Shimbun Inc.) and The Environment and Business: A Complete Forecast (Nihon Keizai Shimbun Inc.). The Japanese publication of Mandela’s Way: Fifteen Lessons on Life, Love, and Courage (Eiji Press) was translated under his supervision.
Prior to joining GLOBIS, Mr. Takubo worked at the Mitsubishi Research Institute, engaged in investigation, research, and consulting services mainly for the energy industry and national government ministries.
Mr. Takubo received his undergraduate and graduate degrees in Science and Technology from Keio University. He subsequently enrolled in the PED (Program for Executive Development) course at IMD (International Institute for Management Development) in Switzerland.

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