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The sayings of Akio Morita - A Textbook for the Heart



Courage to Change Japanese-style Business in Crisis (1992)
"Global Localization"

At the beginning of the 1990s, Japan was such a strong international business competitor, focused around car manufacturing and electronics, that it was seen as something of a problem in Europe and the States, where they joked that Japan would "export itself out of a job". The usual Japanese business practice was to focus on market share, even more than profits, and this was somewhat different to Europe and America. It was in this climate that Akio Morita published "Japanese-style Business in Crisis", which called for a re-evaluation of Japanese-style business that has not been considered at that point, and mapped a way for Japanese and Western businesses to exist side by side and mutually prosper.

In November last year I joined Keidanren (Japan Federation of Economic Organizations) Chairman, Gaishi Hiraiwa, as a member of a mission to Europe, where we exchanged ideas with leading political and business figures from Germany, Belgium, Holland and England.

Meeting for discussions with some of Europe's big corporations at the Hague Roundtable in Holland, we had some long and meaningful exchanges with powerful businessmen, such as Pehr Gyllenhammar of Volvo, Wisse Dekker of Philips, Gianni Agnelli of Fiat and Andre Leysen of Agfa.

On the way back, I also accompanied Mr. Hiraiwa to the United States, where we held discussions with businessmen there, such as James Dixon Robinson III of American Express, George Fisher of Motorola and Kay Whitmore of Kodak.

I found these kinds of talks stimulating and they gave me some hints about various differences that exist with the Japanese way of doing business.

The discussion about European produced cars left a particularly deep impression on me. The heads of European car industries emphasized limitations on the European based manufacture of Japanese cars, believing that "the influence of imported Japanese cars and European made Japanese cars was the same".

When I first heard this I though that this kind emphasis hadn't existed. My company had factories in 10 locations across Europe and most of our televisions and other equipment sold in Europe, was made in Europe. Our television manufactured in Bridgend, UK, had won the Queen Award for Export three times.

We believed that if we invested in Europe and became a European enterprise, we would be accepted. I thought deeply about how we could become a fully European business and decided that not just manufacturing, but all aspects of operation must be localized, including transferring control away from head office. Moreover all affiliates should work hard to become a good corporate citizen of their local communities.

I turned this approach of "global localization" into a company slogan and promoted it as a program of structural reform and awareness-raising throughout Sony worldwide. Locals control management, manufacturing and procurement, and if they produce a high-quality, affordable product then they should be known as an excellent local manufacturer. Opposing such a concept seems excessively unreasonable and we should increase efforts to change such minds.

( Extract from" Nijuisseki e " (Towards the 21st Century), published by WAC)

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