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Copyright© Hiroshige Hayashi

Echigoya In-store View in

Edo of the 17th Century

TOYOTA HP

Global Optimization Acumen with Neo-Japanese Spirit：Management Philosophy in the Age of Globalization

Hiroshige HAYASHI

Xi-an Jiaotong University School of Management, China

Toyota’s MIRAI launched in 2014 ,

a first-ever FCV in the world at ¥7.23M.

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The management philosophy of Global Japan (1990 – present) is proposed

with a mantra of ‘Global Optimization Acumen with Neo-Japanese Spirit’ .

Changes in the current civilization system (politics, economics, society/culture,

technology and ICT) are viewed in terms of three axes – innovation,

globalization and diversity. The analysis has revealed that Japanese

companies have evolved rather slowly in these three axes, causing sluggishness

in their competitiveness at home and abroad.

To allow the companies to restore competitiveness and sustain stable growth,

a management philosophy embodying the principle of company management

towards the future needs to be redefined to fit the current civilization system.

Attention is paid to the framework and direction of redefinition, focusing on

“Neo-Japanese Spirit (Japaneseness)" and “Global Optimization

Acumen(universality)", combined as two sides of the same coin.

ABSTRACT

CSR, RSM

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(Yokozawa, 2012; Hayashi, 2015)

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THE DEFINITION OF MANAGEMENT PHILOSOPHY

Management philosophy is the principle of business

management, that is, the code for management

behaviors, or doing right and good things.

Management philosophy is shared in the company

as embedded in company culture (as tacit

knowledge), manifested in company missions, and

materialized in CSR undertakings.

as the centripetal force of management for business longevity

CSR, RSM

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(Yokozawa, 2012; Hayashi, 2015)

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Management

Philosophy

THE DEFINITION OF MANAGEMENT PHILOSOPHY

The management of long-lived

companies demonstrates that

management philosophy does

exert centripetal leadership to

ensure solid /cohesive

management and keep

implementing seamless

innovations of customer value

while developing favorable

and contributive relationships

with the society.

as the centripetal force of management for business longevity

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JAPANESE MANAGEMENT PHILOSOPHY

Japanese management philosophy is an off-spring of Japanese thought

and belief in the area of business, and therefore reflects "the spirit (mind

and heart)" and "the shape (manners or acts)" of Japaneseness, i.e.

Japanese Mentality.

•The Japanese way of thinking, its religiousness, concerning ancestor

worship, salvation after death and invocation of the dead, comes from

Buddhism and Shintoism.

•Its morality and ethical view owe much to Confucianism and Buddhism.

•Its philosophical perspectives concerning cosmology and justice or sense

of human mission show marked Confucian influence.

Confucianism, Buddhism, and Shintoism are meta-integrated as

theoretical thoroughbass in varying density of Japanese management

philosophy in any period.

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THE CHRONOLOGICAL EVOLUTION OF

MANAGEMENT PHILOSOPHY

Democratic

Japan

(1945-1990)

Imperial

Japan

(1868-1945)

Global

Japan

(1990-Present)

Feudal

Japan

(1603-1868)

‘San-Pou Yoshi’

the Way of the

Merchant

Management

Acumen with

Samurai Spirit

Management

Acumen with

Japanese Spirit

Globalization

Acumen with Neo-

Japanese Spirit

Global Japan

(1990-Present)

As above, the content of management philosophy has evolved and expanded

dynamically to adapt to changes in the civilization system (politics,

economics, society/culture, technology and ICT), demonstrating fluidity and

immutability, path dependency, and reflecting temporal characteristics.

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MANAGEMENT ACUMEN WITH JAPANESE SPIRIT

IN DEMOCRATIC JAPAN (1945-1990)

Japanese ‘industrious’ mentality nurtured

in Imperial Japan was revived.

• The fulfillment of the duty to the best of their ability.

• Dedication to and self-sacrifice for the company.

• Patrioticism to the country and loyalty to the company.

• Decisiveness, courteousy, mission.

Japanese Spirit

After the war, rebuilding the state by restoring the economy was urgent. By

the late 1960s, Japan had grown to the world's second-largest economy.

守(Shu) Follow: Learning fundamentals/forms and following them, that is,

Adopt and Imitate to offer Second but Cheaper products.

破(Ha) Digress: Departing from what was learned for modifications and

improvements, that is,

Adapt and Improve to offer Second but Better products.

離(Ri) Separate: There are no techniques, all moves are natural, becoming

one with spirit alone without clinging to forms, that is,

Adept and Innovate to offer First and Best products.

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Re-iterated for hundreds of years in Merchant Practices, Martial Arts, Tea

Ceremony, Flower Arrangement, Noh, Kabuki, etc.

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Business Acumen ‘Shu- Ha- RI’ or Three Stages of Learning to Mastery

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GLOBAL OPTIMIZATION ACUMEN WITH NEO-

JAPANESE SPIRIT OF GLOBAL JAPAN (1990-Present)

1. Japan’s diminished economic vitality

Japan’s period between 1990 and 2015 is called the lost 25 years,

during which the country suffered from

constant economic downturn and deflation.

• The economy shrank markedly over those 25 years, or (-)4.5%.

• The share of Japan's GDP in world economy dropped from 13%

in 1990 to 6% in 2014.

• During that period, the locomotive of Asian economic growth

shifted from Japan to China.

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• Japanese companies' overseas business is expanding, centered in Asia.

44% of overseas sales and 51%of overseas profits were made there.

• Japan's outstanding amount of foreign direct investment (FDI) in 2013

was around USD2.2 trillion, 22% of that Japanese investment went to

Asia, and 55% to the US and Europe.

• Japan's investment in Asia was smaller but its profitability(*) was higher,

at 9.1%, while investment in the West, the amount was larger, but the

profitability is smaller, 5.1% in the US and 3.3% in Western Europe.

(*)Average figure 1996-2011.

2. Sluggishness in global business development

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There is a widespread notion that during the 25 years from

1990, many Japanese companies failed to make good progress

in their Shu・Ha・Ri evolution and development in the three

axes, causing their performance to slow down, and weaken

their competitiveness in both domestic and overseas fronts.

3. Japanese companies are being left behind in the

three axes of Innovation, Globalization and Diversity.

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Japanese competence for global competition is very low.

•The IMD World Talent Report (2015) says, “ the overall talent

ranking of Japanese people is at 26th among 61 nations and regions.”

•In the categories of language skills, international experience and

competent senior managers, Japanese are 60th, 61st and 61st

respectively. As for university education meeting the requirements

for today's competitive economy and business community, Japan

ranks 57th and 60th.

This indicates a situation like a mental closure to the outside world.

Many say that Japanese people do want to stay

in their rich and comfortable country.

4. Lack of Global Competence

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Management and marketing skills in Japanese companies are lacking

in innovative creativity. Their speed of globalization is slow. Diversity

in their human resources is not well developed.

Keidanren sees this situation as Japan’s crisis (2015), proposing

“Toward the Creation of a More Affluent and Vibrant Japan-

Innovation & Globalization”.

Keidanren also says that Japanese people's 'awareness and social

perception' needs to change in order to revive Japan, implying

deteriorated Japanese mentality has to be rebuilt, but offers no

specific proposals.

5. Crisis Consciousness

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The new generation executives in their 40’s to 50’s grew up with post-

war education, which taught that Japanese traditional thinking over

history and its religiousness, morality, ethical views and philosophical

perspective were ‘dated feudalistic thoughts or militaristic ideas.’

Passing on traditional Japanese mentality from generation to

generation has never or rarely occurred. It is said that the pre-war and

wartime generations(*) were unwilling to pass it on to later

generations while teaching classes or supervising at workplaces,

because they were scared, like " a scalded dog fears even cold water."

We cannot prove a direct link between ‘this fact’ and ‘the decline of

the country's economy’ and the ‘sluggishness in Japanese companies'

global competitiveness,’ but there is an active discussion regarding the

possible relationship between the two.

(*) those who excersised Japanese industrious mentality in Democratic Japan

6.How Japanese Spirit has been deteriorated

over the years.

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It is a contemporary necessity that the Japanese traditional way

of thinking should be recast towards a 'neo-Japanese way of

thinking', reflecting the temporal characteristics of contemporary

civilization systems, and that its offspring, management

philosophy, should be evolved and expanded closely in accordance

with the notion of Global Optimization Acumen.

Any new management philosophy needs to actualize the traits of

promptness and daring needed for ‘survival of the fittest’

within and without the country over the three axes of

innovation, globalization and diversity.

Author’s Perspective

NEO-JAPANESE SPIRIT

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GLOBAL OPTIMIZATION ACUMEN

Globalization, Global Competition,

Global Capabilities, and Globalists

Globalization is that universalization and specialization are in progress

concurrently. Globalization never follows only one side of

standardization.

Global competition means that competition for the supremacy of

universal civilization values(science and technology) and for the influence

of specific cultural values(culture, history, religion, thought) are

proceeding concurrently in the world.

The real state of globalization is a mosaic-like diversity in which each

country or ethnic group's universality and speciality are individually

woven in.

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In the competition of creating universal civilization values,

companies must have the capability to rapidly innovate ICT

and develop cross-border SC/VC, and bring globalists in, and

grow them to a driving force for value creation in the global

network.

In the competition of specific cultural values, while maintaining

cultural identity, companies must maintain high awareness of

global flexibility and adaptability to develop reciprocal exchanges

and mutual influences with different cultural identities.

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A committed person sees the world as one entity, taking a view of his/her

country as a part of that entity. Global optimization management facilitates

optimum deployment and allocation of companies' management elements

around the globe.

Global optimization management aims to make social-economic

contributions across the world, emphasizing self-support, cyclicity and

sustainability.

•Self-support refers to the principle that business operation in each country

must be run by the citizens of each host country.

•Activities for cyclicity include establishing business models including local

industries as partners at each stage of the SC/VC streams from securing

raw material to final consumption.

•Sustainability means making business in each country a permanent

operation by continuing the above self-support and cyclicity.

Global Optimization Management

Global Contribution

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Japan's management philosophy has not died out yet. However, it has

not been systematically carried on by subsequent generations.

In business world, it is said that the success of business restructuring

or diversification is greater if carried out while the company is still

strong. Likewise, management philosophy must be restored and

revived by giving it sustenance before its roots die.

Through Japan's long history, people have inherited Japanese spirit

and Japanese way of thinking and philosophy as cultural genes. This

cultural heritage must be redefined, developed and evolved into a

management philosophy demonstrating fluidity and immutability,

path dependency, and reflecting temporal characteristics, respectively

appropriate to today's civilization system.

‘Global Optimization Acumen with Neo-Japanese Spirit’ is proposed.

CONCLUSION