Introduction

Abstract

All nine companies examined here are classified as secondary industries. The book tries to emphasize that they are manufacturing companies, but they practice production with the Japanese corporate strategy of monozukuri. Monozukuri is part of a total management system that was established after and has been cultivated since World War II. Chapter 2 briefly surveys what has evolved in Japanese management thinking since the 1900s. In addition, the way Japanese global corporations cope with the global business environment is discussed.

Appendices

Appendix 1

Glossary of Japanese-origin Words		Chapter
Word	Explanation	1	2	3	4	5	6
Dantotsu	A short form of ‘danzentoppu,’ meaning the condition that is far and away the most or best; unique and unrivaled.				x
Dens oism	A composite word of ‘Denso’ and ‘ism’; the traditional policy, thought, and credo at Denso.				x
Dojo	Originally an exercise hall for Japanese martial arts; a gymnasium.				x
Eruboshi	The letter L is pronounced ‘eru’ in Japanese, which stands for ‘lady.’ The ‘boshi’ is a voiced consonant of ‘hoshi’ (star).				x
Genba	The actual job site or the workshop in reality; one of the 5Gs, that is, the five first-letter-of-G words.				x
Genbutsu	The actual thing or spot goods, material in reality, one of the 5Gs, that is, the five first-letter-of-G words.				x
Genchi	On the spot or the site in reality; one of the 5Gs, that is, the five first-letter-of-words.				x
Genjitsu	Actuality or occasion in reality; one of the 5Gs, that is, the five first-letter-of-G words.				x
Genjyo	Present situation or situation in reality; one of the 5Gs, that is, the five first-letter-of-G words.				x
Gogenshugi	A composite word of ‘gogen,’ (five ‘gen’ words starting with G in Japanese) and ‘shugi’ (ism).				x
Hito-zukuri	A composite word of ‘hito’ (human) and ‘zukuri’ (nurturing), that is, the human face of training excellent employees.			x
Ikkonagashi	One lot flow; a composite word of ‘ikko’ (one) and ’nagashi’ (operation in flow).				x
Jimini	Inconspicuously, quietly, in a withdrawn way.				x
Jimichini	Steadily, honestly, straight, fairly, soberly, step by step, in an honest way.				x
Jicchokuni	Faithfully, sincerely, honestly, reliably.				x
Jikoteikanketsu	A composite word of ‘jikotei,’ (one’s own process) and ‘kanketsu’ (completion); the idea that one has ownership of whatever process one is engaged in.				x
Jinki kannou	Literally, a composite word of ‘jinki’ (mood) and ‘kannou’ (sense); two kinds of sensual communication between human and machine at Yamaha.				x
Kaizen	A continuous improvement; it has already been used commonly in the business world. Kaizen activities done as a group periodically are thought to be one of the characteristics of a Japanese management system.
Keiretsu	An enterprise group with linked capital; a (corporate) group; a keiretsu (group); an interlocking corporate grouping.		x				x
Kikenyochi	A composite word of ‘kiken’ (danger) and ‘yochi’ or (foreseeing); kiken is one of the 3Ks, that is, the three first-letter-of-K words.				x
Kikubari	Vigilant and careful attention, literarily, but in the Japanese sense of ‘kikubari,’to pay more attention to the person, think of each from the place where they stand.						x
Kitanai	Dirty or unclean; one of the 3Ks, that is, the three first-letter-of-K words.				x
Kitsui	Hard or demanding; one of the 3Ks, that is, the three first-letter-of-K words.				x
Koh	Koh stands for kohseki, meaning achievement.		x
Kousen	A five-year senior school of technology in Japan; a composite word of ‘kotousenmon,’ (high and special) and ‘gakko’ (school).				x
Mono	A thing, product, or service to be supplied or served.	x
Monozukuri	A part of the total management system that was established and cultivated after World War II.	x	x	x	x	x	x
Monozukuri strategy	A strategy centered on systematic manufacturing flow and human resource cultivation.		x				x
Nenkoh	A composite word of ‘nen’ (age) and ‘koh’ (work result).		x
Omotenashi	Literally to be received warmly or cordially and be welcome in the manner of ‘kikubari’ from the place where the person stands.						x
Sahou	Manners; (rules of) etiquette; conventions in regard to behavior.				x
Seiri	(Re)arrangement; (re)adjustment; putting in order; one of the 5Ss, that is, the five first-letter-of-S words concerning the foundation of a factory.				x
Seiton	Proper arrangement; putting [set] to rights; arranging properly; one of the 5Ss, that is, the five first-letter-of-S words concerning the foundation of a factory.				x
Seiso	A cleanup; one of the 5Ss, that is, the five first-letter-of-S words concerning the foundation of a factory.				x
Seiketsu	Cleanliness, cleanness, hygiene, purity; one of the 5Ss, that is, the five first-letter-of-S words concerning the foundation of a factory.				x
Shitsuke	Discipline, upbringing; one of the 5Ss, that is, the five first-letter-of-S words concerning the foundation of a factory.				x
Sogohshosha	A general trading company; although the word is originally a Japanese word, it became an English one because it is not common for the type of trading company in other places. It is found in M. Czinkota, I. Ronkainen, and M. Moffett, International Business, The Dryden Press, 1992, p414.		x
Soshikizukuri	A composite word of ‘soshiki’ (organization) and ‘zukuri’ (voiced consonant of ‘tsukuri,’ for forming effectively).			x
Takuminomori	A composite word of ‘takumi,’ (craftsman) and ‘mori’ (forest); literally, the forest of experts.				x
Takuminowaza	Very high end of craftsmanship.		x				x
Tenn oism	A composite word of ‘tenno’ (emperor) and ism.		x
Tsukurikomu	A composite word of ‘tsukuri’ (manufacturing) and ‘komu’ (work from the bottom of one’s heart).		x

Appendix 2

                    September 22, 2015

Mitsuyoshi Shibata

President & COO

Furukawa Electric Co., Ltd. (FEC )

                     Katsuo Yamazaki

Re: Questionnaire for FEC’s management and strategy

• 1. Your policy presented in FEC home page (HP):

  • (1) You inform the basic corporate policy, action principle, and vision in the pages of “FEC Group Doctrine,” but you do not mention the domain. It is better to put the company’s area of business activity on the HP. As you know, IBM’s domain is, “IBM means service.” In Japan, Yamaha Motor Co. appeals to the public: “Yamaha Motor means creating sensation.” Your comments on this are appreciated.

  • (2) ‘Message from the President’ in Japanese tells us, “The business areas are expanding to information and communication, electronics, new material, and an automotive component, in response to age needs; the company with more than 100 related corporations as a group propel those business areas in the world.” I think a more exciting HP is desirable for viewers to know what the company is like and the corporate strategy. Please give me a comment.

    On the English HP, “Material that supports safety, technology to create peace of mind,” “Supporting infrastructure brightening the world,” “Proposal leading to the next step development with an eye on the future,” Products that bring the world closer to you, implementation that makes life enjoyable.” All these flash on the screen

• 2. After reading Furukawa Electric Group Sustainability Report 2015 (SUSR2015) and the Financial Report 2015 (from April 2014 to March 2015), I would like to ask the following questions regarding the corporate strategy:

  • (1) Please let me know the forecast in sales up to 2020 at five business units, that is, ‘Information and Communication,’ ‘Energy and Industrial Material,’ ‘Electric and Electronics Components,’ ‘Copper Metal Products,’ and ‘Service, Development & Others.’ I would like to know a ballpark figure whether the units are going to grow.

  • (2) I understand that the overseas sales amount was 44.4% against the total in fiscal year 2014. How much do you intend to increase the percentage as a strategy?

  • (3) Growth always requires enormous expenditure. Which business units do you emphasize?

  • (4) How do you decide on the expanding directions in response to needs and seeds in five business units? Is the ‘Supreme Management Meeting’ consisting of presidents, heads of business units decisive?

  • (5) On page 106 in Financial Paper 2015, the section ‘New Product Research Development’ is in the ‘Service, Development & Others’ Unit. Does this mean the new products were produced and sold to the market before transferring the business to four other appropriate business units? And what was the sales amount of that business in financial year 2014?

• 3. Strategy and organization:

  On Page 21, SUSR2015, the chart of governance organization is found. I would like to ask the following regarding the business execution function

  • (1) As business proceeds, does is every dotted line head responsible for the profit but controlled by the above executive directors?

  • (2) Will the heads that are not surrounded by dotted lines, for example, the Automotive Components head, report to the president and/or chairman directly?

  • (3) Does the phrase, ‘sales and marketing activity development’ indicate both ‘Sales/Marketing Business Unit’ and ‘Global Business Promotion Unit’?

  • (4) What is the relation between both business units mentioned in the #2(4) above and the product line units? Do the former insert the latter organization as a horizontal split? If the latter contains a sales section, does the former function only as a support?

  • (5) How many proper staff does ‘Global, group strategy initiative’ have? And what is the relation between this organization and the above two units mentioned in #3(3)?

  • (6) Who is in the One F Automotive Business Team in the strategy division? And what does it result so far? Do you intend to expand this team to other industrial businesses in the company?

  • (7) What ‘Secretary Office’ belongs under corporate strategy division seems to be unique in most large corporations in Japan. What is the function of the secretary office in the strategy division?

• 4. Global corporate strategy:

  • (1) Regarding global corporate strategy, do you request the heads of products line to make a long-term plan (say 5 or more years), and a middle-term plan (3 years or so)? Or do you make a plan by yourself in reference to ‘Global, group strategy initiative’ and ‘Global Business Promotion Unit’?

  • (2) As for overseas mergers and acquisitions (M&A), will you and your assigned special staff take care of the whole procedure successfully? Or by the written rule or procedure (PDCA) could the responsible executive proceed with your consultation in a timely way?

  • (3) Who has the assignment right of head for overseas permanent establishment? May I understand you have the right to assign personnel after discussion among the related heads of divisions with you?

  • (4) How do you think your human resources are prepared as required for enacting global corporate strategy?

    Please mark multiple choices if necessary.

    • (a) Many personnel are prepared to execute strategy, and no anxiety exists.

    • (b) Not sufficient for human resources, but it is not an urgent issue.

    • (c) Having perceived it is not sufficient; the instruction to improve situation has been made.

    • (d) There exists a development method in the company, and it has been executed. Therefore, no problems are seen for the middle- and long-term plan.

    • (e) As for hiring global human resources, it looks as if there is no problem, either in Japan or in overseas offices.

    • (f) When it becomes necessary, head hunting in Japan or foreign countries is an alternative.

• 5. Human resource development

  In relation to the development of global human resources on pages 38 and 39 of SUSR2015, I would like to ask as the following:

  • (1) In the whole development system of global human resources, how many associates had been developed by GBL program up to 2012? Why did GBL shift to GMP program?

  • (2) As for GMP, GDP, and GCP, are these programs only for local associates? Are the programs as a whole executed in foreign countries? Is there any training in Japan?

  • (3) ‘FEC expatriate’ seems to be separate. Does he take a training after his appointment is made?

  • (4) Only in the column of ‘FEC expatriate’ are ‘Overseas Operation,’ ‘Teamwork Improvement,’ and ‘Workshop’ in the circle. Please explain what this means as a chart of human resource development.

• 6. Corporate policy in the future

  • (1) Please indicate the target of ratio of operating profit to net sales. And Return on Equity (ROE).

  • (2) In addition to the opinion of head of global business promotion unit, I would like to ask you a marketing strategy. Which area will you expand into for the business?

    Please mark a circle the item.

    (2-1) No ideas for areas and regions specifically.

    (2-2) Which areas are you interested in? Please mark multiple choices if necessary.

    (a) India (b) Asia including China (c) Europe (d) Latin America (e) North America, including Mexico (f) Northern Africa (g) African Continent except Northern Africa (h) Oceania (i) Russia

  • (3) Research and Development Policy

    After Tatsuo Teratani was recruited as a director from outside the company, synchronizing a business plan and research development in the field of automotive components business seems to be effective. In other fields how do you make a decision and execute R & D?

Appendix 3

                    September 22, 2015

Hiroyuki Ohtake

Senior Managing Director

General Manager

Global Business Strategic Initiative

Furukawa Electric Co., Ltd. (FEC )

                     Katsuo Yamazaki

Re: Questionnaire for global marketing and overseas operations

• 1. I have learned that you have promoted all global businesses at FEC except the business unit of the automotive component division, which practically deals with Furukawa Automotive System (FAS ), a FEC subsidiary by 100% ownership. The following is questioned based on this assumption.

• 2. Is my understanding of your span of execution and duties correct in the above? How often do you reconcile policies and strategies with some manufacturing divisions of FEC Products?

• 3. Please inform me which areas you would intend to enter into and/or strengthen when you review the overseas markets at FEC in view of global strategy:

Areas for strategical global markets
	Please mark ✓ in the proper item.
	No problem for plural answers.	✓ mark column
アジア	Pan-Asian countries
	Asia except China and India
	East Asia including China, South Korea, and Taiwan
	South East Asia including AEC-10
	Chi na
	In dia
	Sri Lanka
	Pakistan
	Any specific country ( )
Middle East	Pan-Middle East
	Middle East except Egypt and Turkey
	Middle East except Iran and Iraq
	Eg ypt
	Tur key
	Iran
	Iraq
	Any specific country ( )
Europe	Pan-Europe
	Euro Continent except North Europe-3
	East Europe
	Central and Eastern Europe
	North Europe
	United Kingdom
	Ireland
	Iceland
	Any specific country ( )
Rus sia	Pan-Russia
	West Russia including Moscow
	Central Russia
	East Russia
North America	United States
	Can ada
	Mexico
Central America	Pan-Central America
	Any specific country ( )
South America	Pan-South America
	South America except Mercosur-5
	Mercosur-5
	Bra zil
	Argen tina
	Any specific country ( )
Africa	Pan-African Continent
	North African Continent
	Africa except Northern Africa
	South Africa
	Nige ria
	Ken ya
	Any specific country ( )
Oceania	Australia
	New Zealand
	Any specific country ( )

• 4. Are the following functions included in your scope of work?

  • (1) Function of marketing strategy: Market and sales information, and investment and country risk information.

  • (2) Function of human resource strategy: Optimal human resource allocation in the overseas operations and in the domestic sales division

  • (3) Function of operational assistance overseas: Response if overseas operations request necessary assistance.

• 5. Is the business unit (Global Business Strategic Initiative) responsible for profits at FEC as the profit center? If so, how is the business unit reflected in FEC’s income statement? Or, the internal evaluation of objectives and the results?

• 6. Is the method of management control same in all overseas sales operations? Do you indicate the long-term, say, 5-year business plan to overseas subsidiaries? Or, the plan shall be completed through reconciling each other?

• 7. How much is the business unit’s sales amount including the triangle trade business? If there is a triangle business, what is the ratio of the total sales amount?

• 8. Are the responsible persons at overseas operations limited to the span of your control of local persons or foreigners? Please let me know the ratio between foreigners and FEC’s expatriates.

• 9. How do you communicate with the responsible persons at the overseas related companies? Do they report a paper in English monthly or weekly? Do you use a phone conference and/or TV conference, and/or periodical (say, biyearly) meeting at one place? Or do you visit them frequently?