Friday, December 31, 2004
Japan Today - Executive Impact - Unstoppable Canon
Fujio Mitarai, President, Canon Corp
December 24, 2004
Unstoppable Canon
Shukan Post
Fujio Mitarai, president of Canon Corp, has succeeded in making the company one of the most profitable in the world.
While he picked up much of his business acumen in the U.S., however, he did not apply U.S. methods to his business in Japan.
Mitarai has consistently exercised his rationalism in running Canon. He maintains the life-time employment system, but has eliminated the seniority system from it.
In the seven years since he has been president, Mitarai's principle has been "selection and concentration in business." During his tenure, Canon's total assets at the current market value increased to 4,400 billion yen, three times as much as when he took over.
Running a huge corporation like Canon, when do you find time for rest?
When I am sleeping.
I assume you must always be under pressure when it comes to making important decisions.
I am not running the company alone. I have other executives with whom I share my thoughts. We all share our views on the direction of the company through discussion.
Companies like Mitsubishi Motors, Kanebo and Daiei are in big trouble because executives could not say no to their presidents. In your company, are there any executives who can do that to you?
Of course, there are. If there were no disagreement from my executives, running the company would be easier, sure, but I am not perfect. I have been making it a rule to ask my employees directly what their ideas are on business strategies. I want them to come up with different hypotheses.
What do you mean?
I have been working for the company for the last 47 years, which has given me much experience and case studies to refer to. Whenever I encounter problems, ideas for a solution based on those past cases come to my mind, from which I develop hypotheses. That's what all employees should do.
Does market research help?
The results of market research come too late. I question myself whether a hypothesis is right or not and present it to my employees for discussion. After that, we can think about market research.
How do you feel about market research?
Market research doesn't help in developing products. Rather, market research gives us some idea how popular our products are among consumers. If we make products based on the results of market research, the products will be similar to those of other manufacturers.
For manufacturers, information on high technology theory obtained from academic associations is far more important. Based on such information, we can develop new products. Then we will advertise those new products to captivate consumers.
When new products are introduced, they will create new markets and eliminate old products. As you can see, 8-milimeter cameras, typewriters and word processors have all disappeared.
If any company decides to make products just by following others, they will never win. U.S. business leaders are suffering in this respect.
What were your early days in the U.S. like?
I moved to Canon USA in 1966. At that time, Canon USA's market share in the U.S. compact camera market was the lowest. Soon, Canon developed the AE-1-model camera whose body was plastic and which had a mounted CPU. It was light and had a price advantage as well. I thought that the new camera had a great chance. I planned to do a large advertising campaign.
At that time, camera manufacturers were mostly advertising in trade magazines. People criticized me, saying I did not know the U.S. market. At that time, Canon USA had a $38 million deficit and I spent $1.5 million for advertising.
The result was that the new product made a big hit on the market. It was ranked the No. 1 selling product.
What differences do you see between Japanese management and U.S. management?
Mainly in speed. In a U.S. corporation, a CEO has strong power and a top-down decision-making process prevails. The speed of management is important in the U.S.
In Japanese corporations, many of them still have the seniority system. Presidents of those companies reward employees who have worked the longest for their companies. Also, they have a system for consensus management, which eliminates the need for employees to take responsibility.
Since Japan's bubble economy burst, experts have been saying that U.S. management methods are superior and that Japan should learn from them. What do you think?
I don't agree. Labor in the U.S. is consistently moving. The better they are, the more frequently they change companies in order to grow. Top management of U.S. corporations needs high-quality employees to pursue their successful business with high speed management in order to win competition.
If those high-quality employees leave their companies, top management can no longer pursue their business plans. Of course, they can hire capable employees frequently and organize good teams for winning short-term competition.
On the other hand, Japanese corporations can pursue their businesses based on long-term plans. Their employees can be trained on a long-term basis. U.S. business leaders are learning from Japanese management.
Are you saying that Japan's life-time employment system is good?
Yes, it is. However, if the life-time employment system is combined with a seniority system, it would be disastrous. Those companies will lose vitality. Canon has a life-time employment system but we have a salary system for employees based on performance.
Do you see Japan having a mobile labor force?
No. Canon has allocated 200 posts to be filled from outside. In reality, we hire only 50 such employees because we cannot find qualified workers among them.
Canon is by far the leading digital camera maker in the market today. But in the beginning, you were behind. To what do you attribute your success?
We had found that our company had 270 patents in digital camera-related technology, which was the largest in the industry. I created a new division directly responsible to me in order to develop digital cameras. I gave them a sufficient budget for the year and ordered the division to develop a new engine for processing pictures. As I expected, the division developed a super engine. The final product was the IXY-G model and it became the No. 1 selling product on the market.
Do you think the digital camera market is saturated?
Sales of digital cameras more than doubled in 2003 and 2004. Research shows that 70% of families in Japan have a digital camera. Some digital camera manufacturers have excessive stocks of products.
Canon's sales of digital cameras increased 70% in 2004. We are still doing unusually well. It is a reasonable view to suggest that market is about to mature. However, I can still see room for growth.
Where?
With the expansion of broadband Internet connections, the market will be geared more to video pictures from static pictures. NTT has plans to change normal telephones to TV telephones at home.
In the near future, human communications will be made though video pictures on TV units. If the time comes when many families are watching video pictures on Sony TVs and only their printers are Canon, it will disappoint me a lot. Canon must be also the center.
This year, your company built a new plant in Oita Prefecture. Why didn't you build it in China?
I was looking at the company in 5-10 years' time. Suppose we manufacture 50 million units of a certain product a year and the production needs 5,000 laborers. If we double production in five years, we have to increase our labor to 10,000. Even if we build a plant in China, we will not be able to enjoy profits because labor costs in China will have to be high. Investment in a new plant in China would be a waste.
Are you saying that you do not need China for production?
The Chinese market is attractive. The income of the Chinese people will rise, which will boost their purchasing power. In my view, China is not for production but for selling products.
Thursday, December 30, 2004
Ringi - Decision making, Japanese Style
'Ringi'
A Japanese process for reaching decisions by consensus
'Ringi' is a process used in Japanese organisations which ensures that all people who will be involved in implementing a decision have a say in making that decision in the first place. Ringi is a collective decision-making process involving the circulation of a document (the 'ringi-sho'). This document is annotated and amended as it circulates, and continues around the decision-making loop until everyone signs up to it using their own stamp.
The process is usually begun by middle managers who circulate the proposal to all relevant departments and colleagues. This 'bottom-up' process means that by the time the document rises to the ranks of the senior executives, it already has the support of all those whose agreement is needed and who will actually make it happen if it is approved. The function of senior management is to decide at a strategic level which of the proposals is most important to the corporation.
Obviously this is a meticulous and slow process, and does not appeal to the 'action-oriented' western manager who wants to see results quickly. However this Japanese process can be quicker in the long run by ironing out any potential problems at the beginning of the process and building commitment to the project. Whereas the western model is slowed down by solving problems as the project proceeds, the Japanese method results in rapid and smooth implementation after detailed planning."
A Japanese process for reaching decisions by consensus
'Ringi' is a process used in Japanese organisations which ensures that all people who will be involved in implementing a decision have a say in making that decision in the first place. Ringi is a collective decision-making process involving the circulation of a document (the 'ringi-sho'). This document is annotated and amended as it circulates, and continues around the decision-making loop until everyone signs up to it using their own stamp.
The process is usually begun by middle managers who circulate the proposal to all relevant departments and colleagues. This 'bottom-up' process means that by the time the document rises to the ranks of the senior executives, it already has the support of all those whose agreement is needed and who will actually make it happen if it is approved. The function of senior management is to decide at a strategic level which of the proposals is most important to the corporation.
Obviously this is a meticulous and slow process, and does not appeal to the 'action-oriented' western manager who wants to see results quickly. However this Japanese process can be quicker in the long run by ironing out any potential problems at the beginning of the process and building commitment to the project. Whereas the western model is slowed down by solving problems as the project proceeds, the Japanese method results in rapid and smooth implementation after detailed planning."
Wednesday, December 29, 2004
Dentsu poll finds year's top 10 consumer darlings
The Japan Times Online: Dentsu poll finds year's top 10 consumer darlings
South Korean star, soap opera, Ichiro, DVDs, TVs, soy milk figure on list
By TAIGA URANAKA
Staff writer
2004 saw many things strike the fancy of Japanese consumers, especially on the big screen at home, to the extent that some became social phenomena.
Large flat-screen TVs dominate a sales display at a Laox electronic appliance shop in the Akihabara district of Tokyo.
Dentsu Inc., the country's biggest ad agency, polled 1,000 people aged 15 and over on the Internet to compile its annual top 10 hit list, shown below.
No. 1: Large flat-screen TVs
This year continued to see rapid sales growth of flat-screen TVs, including liquid crystal and plasma display models.
Their popularity was boosted by big spectator events, including the Athens Olympics, and the start of terrestrial digital broadcasting in 2003 in major cities.
Conventional cathode-ray tube TVs still dominate the global market, with some 1.2 billion units sold annually.
But the Japan Electronics and Information Technology Industries Association forecast that worldwide demand for flat-screen TVs in 2004 will double to 7.9 million units.
PDP and LCD screens are meanwhile getting bigger.
In August, Sharp Corp. released a 45-inch LCD TV. It plans to introduce 50-inch-plus sizes during the fiscal year that begins in April.
Matsushita Electric Industrial Co.'s largest PDP is 65 inches, with a price tag of 2.08 million yen.
South Korean makers are producing even larger sets.
Aggressive production expansion by Japanese and South Korean makers, however, raises the specter of excess supply in near future, which may trigger a sharp price drop.
No. 2: Japanese players in the U.S. Major Leagues
Many Japanese, including many not usually drawn to baseball, were thrilled by Seattle Mariners outfielder Ichiro Suzuki, especially near the end of the season and the daily countdown for his historic season of hits.
The slugging sensation renewed the major league record for hits in a season, breaking the 84-year-old record of 257 held by George Sisler.
Other Japanese players also made impressive showings, including slugger Hideki Matsui of the New York Yankees and pitcher Kazuhisa Ishii of the Los Angeles Dodgers.
No. 3: "Sekai no Chushin de Ai o Sakebu" ("Crying for Love at the Center of the World")
Many Japanese shed tears over Kyoichi Katayama's best selling novel, which tells the story of a man who loses his girlfriend to leukemia. It was also made into a TV drama and a movie, creating what was coined a "Seka-chu boom."
No. 4: DVD recorders with hard-disk drives
In Japan, a vast majority of DVD recorders are HDD-equipped.
Consumer electronics makers keep rolling out units with ever-bigger data storage capacity, enabling users to record weeks, if not months, of TV programs.
Toshiba Corp. last month released a DVD recorder with a 600-gigabyte drive, which can record up to 1,071 hours.
As a result, many users have found little use for the stacks of blank discs they bought.
No. 5: Black vinegar
No. 6: "Nigari"
No. 7: Soy milk
These three traditional drinks have recently become hits because of heightened health consciousness among consumers.
Black vinegar is made mainly from either brown rice or barley. It is touted to have positive health effects and ward off fatigue and high-blood pressure.
A number of companies tried to cash in on the boom, releasing various drinks featuring black vinegar.
Nigari and soy milk are basically the ingredients of tofu.
Nigari is the liquid left after salt is extracted from seawater. It is rich in minerals, including magnesium chloride. It is usually sold in PET bottles, and people put a little amount in drinks or cooking.
Nigari is pitched by some as an effective weight reducer. The National Institute of Health and Nutrition, however, has warned that there is no evidence supporting this assertion.
Meanwhile, domestic shipments of soy milk are expected to jump to some 180,000 tons for 2004, up from 128,000 tons last year, according to Kibun Food Chemifa Co.
The country's largest soy milk producer boosted its production capacity by 40 percent earlier this year. But it was forced to issue an apology in the summer after failing to meet robust demand.
No. 8: Bae Yong Joon
Better known as "Yon-sama," the South Korean actor who played a leading role in the TV drama "Fuyu no Sonata" ("Winter Sonata") triggered a phenomenal boom for all things South Korean.
Dai-Ichi Life Research Institute Inc. estimates the "Fuyusona boom" has brought 694.5 billion won (69 billion yen) to the South Korean economy through a jump in the number of Japanese tourists.
The boom is also estimated to have generated 122.5 billion yen in Japan, through strong sales of items related to the drama as well as those of products promoted by TV commercials featuring Bae and Choi Ji woo, the heroine in the drama.
No. 9: "The Last Samurai"
The 2003 film starring Tom Cruise saw his Japanese costar, Ken Watanabe, nominated for an Oscar.
No. 10: Flat-rate fees
Late last year, KDDI Corp. began a flat-rate fee for its third-generation cell phone network. NTT DoCoMo Inc. and Vodafone K.K. followed suit.
By introducing a fixed monthly packet fee, the carriers are hoping to encourage users to download more content, including movies, music and games.
The Japan Times: Dec. 30, 2004
(C) All rights reserved
South Korean star, soap opera, Ichiro, DVDs, TVs, soy milk figure on list
By TAIGA URANAKA
Staff writer
2004 saw many things strike the fancy of Japanese consumers, especially on the big screen at home, to the extent that some became social phenomena.
Large flat-screen TVs dominate a sales display at a Laox electronic appliance shop in the Akihabara district of Tokyo.
Dentsu Inc., the country's biggest ad agency, polled 1,000 people aged 15 and over on the Internet to compile its annual top 10 hit list, shown below.
No. 1: Large flat-screen TVs
This year continued to see rapid sales growth of flat-screen TVs, including liquid crystal and plasma display models.
Their popularity was boosted by big spectator events, including the Athens Olympics, and the start of terrestrial digital broadcasting in 2003 in major cities.
Conventional cathode-ray tube TVs still dominate the global market, with some 1.2 billion units sold annually.
But the Japan Electronics and Information Technology Industries Association forecast that worldwide demand for flat-screen TVs in 2004 will double to 7.9 million units.
PDP and LCD screens are meanwhile getting bigger.
In August, Sharp Corp. released a 45-inch LCD TV. It plans to introduce 50-inch-plus sizes during the fiscal year that begins in April.
Matsushita Electric Industrial Co.'s largest PDP is 65 inches, with a price tag of 2.08 million yen.
South Korean makers are producing even larger sets.
Aggressive production expansion by Japanese and South Korean makers, however, raises the specter of excess supply in near future, which may trigger a sharp price drop.
No. 2: Japanese players in the U.S. Major Leagues
Many Japanese, including many not usually drawn to baseball, were thrilled by Seattle Mariners outfielder Ichiro Suzuki, especially near the end of the season and the daily countdown for his historic season of hits.
The slugging sensation renewed the major league record for hits in a season, breaking the 84-year-old record of 257 held by George Sisler.
Other Japanese players also made impressive showings, including slugger Hideki Matsui of the New York Yankees and pitcher Kazuhisa Ishii of the Los Angeles Dodgers.
No. 3: "Sekai no Chushin de Ai o Sakebu" ("Crying for Love at the Center of the World")
Many Japanese shed tears over Kyoichi Katayama's best selling novel, which tells the story of a man who loses his girlfriend to leukemia. It was also made into a TV drama and a movie, creating what was coined a "Seka-chu boom."
No. 4: DVD recorders with hard-disk drives
In Japan, a vast majority of DVD recorders are HDD-equipped.
Consumer electronics makers keep rolling out units with ever-bigger data storage capacity, enabling users to record weeks, if not months, of TV programs.
Toshiba Corp. last month released a DVD recorder with a 600-gigabyte drive, which can record up to 1,071 hours.
As a result, many users have found little use for the stacks of blank discs they bought.
No. 5: Black vinegar
No. 6: "Nigari"
No. 7: Soy milk
These three traditional drinks have recently become hits because of heightened health consciousness among consumers.
Black vinegar is made mainly from either brown rice or barley. It is touted to have positive health effects and ward off fatigue and high-blood pressure.
A number of companies tried to cash in on the boom, releasing various drinks featuring black vinegar.
Nigari and soy milk are basically the ingredients of tofu.
Nigari is the liquid left after salt is extracted from seawater. It is rich in minerals, including magnesium chloride. It is usually sold in PET bottles, and people put a little amount in drinks or cooking.
Nigari is pitched by some as an effective weight reducer. The National Institute of Health and Nutrition, however, has warned that there is no evidence supporting this assertion.
Meanwhile, domestic shipments of soy milk are expected to jump to some 180,000 tons for 2004, up from 128,000 tons last year, according to Kibun Food Chemifa Co.
The country's largest soy milk producer boosted its production capacity by 40 percent earlier this year. But it was forced to issue an apology in the summer after failing to meet robust demand.
No. 8: Bae Yong Joon
Better known as "Yon-sama," the South Korean actor who played a leading role in the TV drama "Fuyu no Sonata" ("Winter Sonata") triggered a phenomenal boom for all things South Korean.
Dai-Ichi Life Research Institute Inc. estimates the "Fuyusona boom" has brought 694.5 billion won (69 billion yen) to the South Korean economy through a jump in the number of Japanese tourists.
The boom is also estimated to have generated 122.5 billion yen in Japan, through strong sales of items related to the drama as well as those of products promoted by TV commercials featuring Bae and Choi Ji woo, the heroine in the drama.
No. 9: "The Last Samurai"
The 2003 film starring Tom Cruise saw his Japanese costar, Ken Watanabe, nominated for an Oscar.
No. 10: Flat-rate fees
Late last year, KDDI Corp. began a flat-rate fee for its third-generation cell phone network. NTT DoCoMo Inc. and Vodafone K.K. followed suit.
By introducing a fixed monthly packet fee, the carriers are hoping to encourage users to download more content, including movies, music and games.
The Japan Times: Dec. 30, 2004
(C) All rights reserved
Tuesday, December 28, 2004
Monday, December 27, 2004
Saturday, December 25, 2004
Friday, November 12, 2004
Way of the Warrior
Bushido, literally translated "Way of the Warrior," developed in Japan between the Heian and Tokugawa Ages (9th-12th century). It was a code and way of life for Samurai, a class of warriors similar to the medieval knights of Europe. It was influenced by Zen and Confucianism, two different schools of thought of those periods. Bushido is not unlike the chivalry and codes of the European knights. "It puts emphasis on loyalty, self sacrifice, justice, sense of shame, refined manners, purity, modesty, frugality, martial spirit, honor and affection" (Nippon Steel Human Resources Development Co., Ltd. 329).
ORIGINS AND INFLUENCES
Bushido comes out of Buddhism, Zen, Confucianism, and Shintoism. The combination of these schools of thought and religions has formed the code of warrior values known as Bushido.
From Buddhism, Bushido gets its relationship to danger and death. The samurai do not fear death because they believe as Buddhism teaches, after death one will be reincarnated and may live another life here on earth. The samurai are warriors from the time they become samurai until their death; they have no fear of danger. Through Zen, a school of Buddhism one can reach the ultimate "Absolute." Zen meditation teaches one to focus and reach a level of thought words cannot describe. Zen teaches one to "know thyself" and do not to limit yourself. Samurai used this as a tool to drive out fear, unsteadiness and ultimately mistakes. These things could get him killed.
Shintoism, another Japanese doctrine, gives Bushido its loyalty and patriotism. Shintoism includes ancestor-worship which makes the Imperial family the fountain-head of the whole nation. It awards the emperor a god-like reverence. He is the embodiment of Heaven on earth. With such loyalty, the samurai pledge themselves to the emperor and their daimyo or feudal landlords, higher ranking samurai. Shintoism also provides the backbone for patriotism to their country, Japan. They believe the land is not merely there for their needs, "it is the sacred abode to the gods, the spirits of their forefathers . . ." (Nitobe, 14). The land is cared for, protected and nurtured through an intense patriotism.
Confucianism gives Bushido its beliefs in relationships with the human world, their environment and family. Confucianism's stress on the five moral relations between master and servant, father and son, husband and wife, older and younger brother, and friend and friend, are what the samurai follow. However, the samurai disagreed strongly with many of the writings of Confucius. They believed that man should not sit and read books all day, nor shall he write poems all day, for an intellectual specialist was considered to be a machine. Instead, Bushido believes man and the universe were made to be alike in both the spirit and ethics.
Along with these virtues, Bushido also holds justice, benevolence, love, sincerity, honesty, and self-control in utmost respect. Justice is one of the main factors in the code of the samurai. Crooked ways and unjust actions are thought to be lowly and inhumane. Love and benevolence were supreme virtues and princely acts. Samurai followed a specific etiquette in every day life as well as in war. Sincerity and honesty were as valued as their lives. Bushi no ichi-gon, or "the word of a samurai," transcends a pact of complete faithfulness and trust. With such pacts there was no need for a written pledge; it was thought beneath one's dignity. The samurai also needed self-control and stoicism to be fully honored. He showed no sign of pain or joy. He endured all within--no groans, no crying. He held a calmness of behavior and composure of the mind neither of which should be bothered by passion of any kind. He was a true and complete warrior.
These factors which make up Bushido were few and simple. Though simple, Bushido created a way of life that was to nourish a nation through its most troubling times, through civil wars, despair and uncertainty. "The wholesome unsophisticated nature of our warrior ancestors derived ample food for their spirit from a sheaf of commonplace and fragmentary teachings, gleaned as it were on the highways and byways of ancient thought, and, stimulated by the demands of the age formed from these gleanings a new and unique way of life" (Nitobe, 20).
From: http://mcel.pacificu.edu/as/students/bushido/bindex.html
ORIGINS AND INFLUENCES
Bushido comes out of Buddhism, Zen, Confucianism, and Shintoism. The combination of these schools of thought and religions has formed the code of warrior values known as Bushido.
From Buddhism, Bushido gets its relationship to danger and death. The samurai do not fear death because they believe as Buddhism teaches, after death one will be reincarnated and may live another life here on earth. The samurai are warriors from the time they become samurai until their death; they have no fear of danger. Through Zen, a school of Buddhism one can reach the ultimate "Absolute." Zen meditation teaches one to focus and reach a level of thought words cannot describe. Zen teaches one to "know thyself" and do not to limit yourself. Samurai used this as a tool to drive out fear, unsteadiness and ultimately mistakes. These things could get him killed.
Shintoism, another Japanese doctrine, gives Bushido its loyalty and patriotism. Shintoism includes ancestor-worship which makes the Imperial family the fountain-head of the whole nation. It awards the emperor a god-like reverence. He is the embodiment of Heaven on earth. With such loyalty, the samurai pledge themselves to the emperor and their daimyo or feudal landlords, higher ranking samurai. Shintoism also provides the backbone for patriotism to their country, Japan. They believe the land is not merely there for their needs, "it is the sacred abode to the gods, the spirits of their forefathers . . ." (Nitobe, 14). The land is cared for, protected and nurtured through an intense patriotism.
Confucianism gives Bushido its beliefs in relationships with the human world, their environment and family. Confucianism's stress on the five moral relations between master and servant, father and son, husband and wife, older and younger brother, and friend and friend, are what the samurai follow. However, the samurai disagreed strongly with many of the writings of Confucius. They believed that man should not sit and read books all day, nor shall he write poems all day, for an intellectual specialist was considered to be a machine. Instead, Bushido believes man and the universe were made to be alike in both the spirit and ethics.
Along with these virtues, Bushido also holds justice, benevolence, love, sincerity, honesty, and self-control in utmost respect. Justice is one of the main factors in the code of the samurai. Crooked ways and unjust actions are thought to be lowly and inhumane. Love and benevolence were supreme virtues and princely acts. Samurai followed a specific etiquette in every day life as well as in war. Sincerity and honesty were as valued as their lives. Bushi no ichi-gon, or "the word of a samurai," transcends a pact of complete faithfulness and trust. With such pacts there was no need for a written pledge; it was thought beneath one's dignity. The samurai also needed self-control and stoicism to be fully honored. He showed no sign of pain or joy. He endured all within--no groans, no crying. He held a calmness of behavior and composure of the mind neither of which should be bothered by passion of any kind. He was a true and complete warrior.
These factors which make up Bushido were few and simple. Though simple, Bushido created a way of life that was to nourish a nation through its most troubling times, through civil wars, despair and uncertainty. "The wholesome unsophisticated nature of our warrior ancestors derived ample food for their spirit from a sheaf of commonplace and fragmentary teachings, gleaned as it were on the highways and byways of ancient thought, and, stimulated by the demands of the age formed from these gleanings a new and unique way of life" (Nitobe, 20).
From: http://mcel.pacificu.edu/as/students/bushido/bindex.html
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