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.
• 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, enduring companies also emphasize long-term coexistence with business partners. Even if there is a short-term loss, they decide that, since they have benefitted from their partners’ assistance in the past, it is OK to incur a loss now to maintain 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 (CSR), we found that they actually go above and beyond that. 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.
Broader CCV & Global Management
For decades, Japanese companies have built factories across Southeast Asia and China. If these companies were branching out simply because labor costs were 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.
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 & Humility
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 the gods 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 humility through constantly acknowledging something greater than yourself.
There is a common practice among enduring companies when it comes to nurturing people: 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 passed, everybody in the company has learned to love the smell of cast metal!
Until recently, lengthy training periods, sports festivals, and clubs were seen at all companies in Japan. But now, these activities are being abolished to reduce costs. As a result, many companies are struggling with problems such as a lack of communication between employees.
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.