Courage to Change Japanese-style Business in Crisis (1992)
"Reforming Japan’s Economy and Social System as a Whole”
In the current Japanese economic climate, an organization that tries to reform itself is thought to be courting disaster, and as a result they do not take positive steps in this direction. This prevailing prioritization of self-protection is a problem and few entrepreneurs have the courage to take the lead in setting an example. This is an extremely difficult problem, but some businesses are starting to tackle the problem and move in that direction.
If I dare to use my own organization as an example, we have recently begun to introduce a flexible holiday scheme that allows employees to take vacations when they want in order to allow them greater individual freedom.
We also introduced a system whereby prospective employees are not judged on the university they graduated from but on individual merit. This again is focusing more on the individual and is a step towards reforming the current system.
On the production side we are applying the same principals and focusing not on subtle changes in our new models, but on producing higher value products that last longer and save resources.
However, a few companies can’t solve fundamental changes in the philosophy of Japanese business. It will only become a reality if the Japanese economy and social system as a whole changes. Of course this change won’t come without pain, but the change must be made. In bringing our country together on this point, there may be sacrifices to our sovereignty and profit lines, but we can draw courage and learn from the efforts of the European Community in working towards these goals. On a Keidanren mission to Europe I was overwhelmed by the earnestness of the heads of EC countries towards unification.
This integration wasn’t simply looking at unifying a market, but took a perspective of political unity and a common currency. With many ethnic groups, languages and values to consolidate, it’s hard to imagine the amount of self-sacrifice that must be made.
As I’ve said before, after the war, Japan introduced business practices such a new system of lifetime employment and lumping management and labor together to share a common fate in the company’s performance. In the history of Japanese business, this was an extremely innovative time and it is my belief that we are capable of this kind of innovation and break through, not results from outside pressure, but from our own efforts.
This is not just the job of entrepreneurs, but shareholder, customers, local communities and all those connected with industry must work together to work towards reform.
When Prime Minister Miazawa took office he talked about Japan aiming to be a “lifestyle superpower”. Business plays a part in moving towards this future and, as I said before, it would be fantastic if we businessmen could take the lead in making a positive contribution to this cause.
( Extract from"Nijuisseki e" (Towards the 21st Century), published by WAC)