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April, 2004（No.8）
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Time to Refine Our Essential Competitive Strengths
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To achieve sustainable growth in the future, companies need to respond quickly to change, while pursuing uniqueness and originality in business. Company size history, and familiarity of name are no longer enough. Passive companies; those who allow changes to wash over them, are destined for history's scrap heap. Change is the key and in order to stay afloat it is vital to distinguish what to update, what to do away with, and what to keep. One change that every company can benefit from is a shift to innovative, high value-added management. Every company must become a demand creator, maintaining the ability to continuously throw in new products, services, and businesses. Naturally, cost and quality remain fundamental, but the additional ability to increase innovation and create completely new and unique products is essential.These products are not only physical goods and easily definable services, but also intangible concepts like brand and design. "Innovation-oriented management" is a concept engineered by the Japan Management Association (JMA) to define a new management method that brings together a company's complete repertoire of technical, developmental, and other strengths to offer high and companyspecific value. Attaining Innovation-oriented management will be a requisite for future success. The trick lies in implementing this technique over hard-won past achievements in efficiency and quality. It requires top executives to possess strong leadership capabilities while remaining action-oriented. Only companies that can successfully reach this high plateau will achieve a state of sustainable growth that benefits all stakeholders, be they customer or stockholder, employee or community. It must be noted that Japanese style management embraces several unique and precious characteristics that should be appreciated and maintained for their own merits. Japanese companies have traditionally out-hit the international competition by diligently focusing on efficiency management in three "real" areas: "real" location of operations, "real" materials, and the "real" situation.However, from the recent spate of accidents it seems that this attitude may be losing ground. It is time to again focus on efficiency management, which has always been the foundation of Japanese industrial strength, and promote solid and constant communication between site staff and management. Changes are first felt in operations.Corporate managers and executives must therefore make sure that they are up to date with the most recent operational developments. This will not only enhance the quality of process management at the worksite, but also enables agile decisionmaking, which is critical in effectively responding to changes. Management must also carefully reexamine human resources and corporate culture, to ensure that there is a firm staff base to support sustainable growth. Simply watching a tree won't bring fruit.Results only come with constant toil, cultivating fertile soil that allows growth of the tree. It is my strong concern that recently companies seem to be expending all of their energies on short-term results and neglecting the soil of human resources and corporate climate. Restructuring measures such as streamlining, personnel cuts, and debt repayment do not by themselves lead to sustainable growth. Companies must maintain long-term vision toward cultivating their people and organization, and fostering originality at all levels if they want to build essential competitive strength. We must continue to respect the handed down, tried and tested aspects of Japanese management and boldly push forward towards further yet unseen excellence. Revitalization of the Japanese economy can only be achieved through greater corporate management efforts and now is the time for Japanese companies to prove our real worth. |
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Survey Analysis
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| Addressing globalization and developing high value-added products and businesses are the issues of the day Corporate Management Challenges Survey Review |
| In FY2003, the Japan Management Association (JMA) conducted its 25th Corporate Management Challenges Survey. This survey is a long-running JMA project designed to gain a better understanding of the contemporary business conditions that Japanese industry is facing. This review looks at leading issues by each category, such as HR development and R&D. |
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Survey Overview
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| * Target Management executives of listed companies (3,608 companies) and non-listed companies (1,807 companies with 300 or more employees) throughout the nation * Survey method Written questionnaire (Distributed by post, returned by post or via the Internet) * Distribution & response statistics Distributed: 5,415 Valid responses: 771 Valid response rate: 14.2% * Survey period August 18 - September 26, 2003 |
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Growing interest in R&D and new business creation
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The need to improve financial vitality (or increased profitability) ranked as the most pressing management challenge, coming in ahead of low-cost management. Clearly, Japanese companies remain highly focused on issues that directly affect business performance. The rankings are quite similar to the two previous surveys of FY2002 and FY2001, but the degree of attention to these two areas has been gradually declining. Instead, more scrutiny is being paid to addressing globalization and research and development. Looking ahead three years, in the year 2006, we see new business and product creation joining the top group. Obviously, focus is shifting to R&D and creation of new products / businesses. The survey also revealed that the listed companies regard globalization and R&D as particularly topical issues and are initiating actions toward addressing them (Fig. 1). |
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| On the other hand, interest in personnel, pay and benefits is gradually lowering. One factor behind this may be that the outcome of the once-harsh personnel system reforms including restructuring has been settled. Companies are now feeling stronger pressure towards business globalization. Globalization includes a number of challenges - reinforcing global competitive strength, developing global human resources, quick adaptation to diverse global markets (e.g. adopting environmental rules and regulations, challenging distribution), and management globalization (e.g. developing corporate governance and accounting standards). In addition there is the issue of R&D which is equally gaining attention as a way to create new high value-added businesses and products as well as new core technologies and processes. |
Global human resources development |
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| Among personnel and training issues, reviewing wage and evaluation systems (e.g. performance-based systems) was regarded particularly important and seems to remain as a primary concern. It can be noted that the manufacturing industry put higher importance on cultivating next-generation managers through early training for selected individuals and reinforcing global HR, when compared to other industries. The larger and the better performing these companies are, the stronger is this tendency. The non-manufacturing industry, on the other hand, highlighted creating systems to improve employee satisfaction and greater use of non-permanent employees. The better-performing companies seemed to find the issue of nonpermanent employees more pressing (Fig. 2). |
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To get a clearer image, three types of "global human resource" were established in this survey. Companies were asked which category is of their central focus. These types were: manager (e.g. management executives of overseas bases), entrepreneur (e.g. finding and starting new businesses, leading global coordination), and business leader that engages in practical business. Larger companies were more interested in managers, whereas smaller companies found entrepreneurs more attractive. The smaller companies are feeling less immediate need for global HR. One general conclusion reached is that communication will be the most sought after skill among Japanese businesspersons in the future. Communication has never been a strong point for Japanese, clearly conveying ideas to others, yet it is a requisite for every type of global HR. In addition, managers will require leadership, managerial knowledge, and logical decision-making, while entrepreneurs will most treasure productiveness. Three components were named as most important in global HR development strategy and systems. These are interest and involvement of top management, support from superiors including mentoring and coaching, and HR assessment through potential and achievement. Thus it appears that both guidance from superiors and individual upgrading should be integrated for a solid global HR development base. |
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Production strategy challenges vary with company size
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What issues are there in the field of production? Among the manufacturing industry, 72% of all companies pointed to optimizing quality control, cost management, and delivery controls as being important, leaving the rest far behind. When considered by company size, large companies with over 10,000 employees chose optimizing global production base (65%) as most important.However, importance of this issue greatly differs by company size. It was only important for 33% of companies with 1,000-9,999 employees and 14.3% for those with less than 1,000 employees. Another trend was noted here: betterperforming betterperforming manufacturers tend to be more focused on optimizing global production bases. There was a question concerning the future status of domestic production bases. Companies that have been reducing domestic production and increasing overseas production over the past three years tended to state it as: manufacturing base for products that require advanced techniques and production technologies (77%) or a development and manufacturing base for the leading-edge development and maturing of core technologies (76%). To keep domestic plants competitive, many companies are striving to improve production techniques and technologies (68%) and reduce cost by global procurement (68%). |
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Issues in the research and development field
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The top three issues in R&D were: establishing an R&D theme consistent with management and business strategies (43%), collaboration between R&D and marketing (39%), and shortening R&D lead time (28%). Speeding up is the only way to keep abreast with the rapidly changing and highly competitive business environment,. It will involve aligning management and business strategies, establishing appropriate matches between needs and R&D, and speeding up the whole process of R&D achievement. Companies are trying not to fall behind by capitalizing on their most unique abilities, clearcutting customer needs, and narrowing down target customers. The major obstacles to the sequential development of new products and businesses were: lack of crosssectional approach toward product commercialization (16%), scarcity of project leaders in product development (15%), and lack of comprehensive strategy in product development (13%). Larger companies seem to find the lack of crosssectional approach more problematic than companies with less employees. The larger the company is the less effectively it seems to perform crossfunctionally. Countermeasures to these problems were: cultivation of new business development leaders, cultivation of cross-sectional product development leaders, stating comprehensive development strategies and goals clearly to the entire company, establishing project team systems, and regular meetings between marketing and sales divisions. Cross-sectional tasks will be most effective in cultivating leadership in talented individuals. Survey results suggest in doing this that the key will be to break down barriers between sections and departments. In addition, it is most important that the top executives clearly communicate comprehensive strategies and goals to the entire company. (By Akihiko Iizumi, Research Promotion Department Institute for Management Innovation, JMA) |
Major JMA Events and Projects (April 2004- March 2005) |
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Year |
Month |
Name of Exhibition |
Type |
Date |
Venue |
| 2004 | April | INTERNATIONAL HORTICULTURAL EXHIBITION 2004 | Exhibition | 20-23 | Makuhari Messe, Chiba |
| MOTORTECH JAPAN 2004 | Exhibition | 21-23 | Makuhari Messe, Chiba | ||
| MOTION ENGINEERING JAPAN 2004 | Exhibition | 21-23 | Makuhari Messe, Chiba | ||
| POWER SUPPLY JAPAN 2004 | Exhibition | 20-23 | Makuhari Messe, Chiba | ||
| EMC JAPAN 2004 | Exhibition | 21-23 | Makuhari Messe, Chiba | ||
| BOARD COMPUTER JAPAN 2004 | Exhibition | 21-23 | Makuhari Messe, Chiba | ||
| THERMAL ENGINEERING 2004 | Exhibition | 20-23 | Makuhari Messe, Chiba | ||
| HIGH-EFFICIENCY & ENERGY-SAVING 2004 | Exhibition | 20-23 | Makuhari Messe, Chiba | ||
| Automobile & ITS Devices 2004 | Exhibition | 21-23 | Makuhari Messe, Chiba | ||
| Personal Area Network Technology 2004/Bluetooth Expo | Exhibition | 21-23 | Makuhari Messe, Chiba | ||
| May | JMA Global Business Leader Course Opening Ceremony | Training | 12 | Seminar House Foliage, Tokyo | |
| Housing & Healthcare Products Exhibition 2004 | Exhibition | 27-29 | Fukuoka International Congress Center | ||
| Japan/China/Korea Mnangement Innovation Forum | Forum | 21 | The Shill Seoul | ||
| June | Motion Picture and TV Engineering Digital Production 2004 | Exhibition | 2-4 | Tokyo Big Sight, Ariake | |
| September | Inter-Food Osaka 2004 | Exhibition | 14-16 | My Dome Osaka | |
| LOGIS-TECH TOKYO 2004 | Exhibition | 14-17 | Tokyo Big Sight, Ariake | ||
| November | Japan Home and Building Show 2004 | Exhibition | 16-19 | Tokyo Big Sight, Ariake | |
| HOSPEX JAPAN 2004 | Exhibition | 17-19 | Tokyo Big Sight, Ariake | ||
| Baby & Kids Fair Japan 2004 | Exhibition | 17-19 | Tokyo Big Sight, Ariake | ||
| School Facilities Fair 2004 | Exhibition | 17-19 | Tokyo Big Sight, Ariake | ||
| ECO-Manufacture 2004 | Exhibition | 17-19 | Pacifico Yokohama | ||
| MAINTENANCE SOLUTION 2004 | Exhibition | 17-19 | Pacifico Yokohama | ||
| Home Builders Expo Osaka 2004 | Exhibition | 25-27 | Intex Osaka | ||
| Pro Tool & Hardware Show 2004 | Exhibition | 25-27 | Intex Osaka | ||
| December | 26th Corporate Management Challenges Survey Report | Conference | 9 | Keidanren Kaikan, Tokyo | |
| 2005 | February | HRD JAPAN 2005 | Conference | 7-10 | Pacifico Yokohama |
| 2005 Manufacturing Innovation Conference | Conference | 23-25 | Pacifico Yokohama | ||
| March | FOODEX JAPAN 2005 | Exhibition | 8-11 | Makuhari Messe, Chiba | |
| HOTERES JAPAN 2005 | Exhibition | 8-11 | Tokyo Big Sight, Ariake | ||
| JAPAN FOOD SERVICE EQUIPMENT SHOW 2005 | Exhibition | 8-11 | Tokyo Big Sight, Ariake | ||
| CATEREX JAPAN 2005 | Exhibition | 8-11 | Tokyo Big Sight, Ariake | ||
| Release of JMA 2005 Proposal | Proposal | 16 | Tokyo Prince Hotel |
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JMA GROUP
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| Japan Management Association（JMA） Activities: Survey, research and advisory services／Management education／ Technical conferences and conventions／Management system audit／Others 3-1-22 Shiba Koen, Minato-ku, Tokyo 1058522 Tel．+81-3-3434-1601 Fax．81-3-3434-1087 URL．http://www.jma.or.jp/indexeng.html |
| Japan Institute of Plant Maintenance （JIPM） Activities: Surveys, researches, consulting, training and publishing relating to TPM（Total Productive Maintenance）and plant maintenance 3-1-38 Shibakoen, Minato-ku, Tokyo 1050011 Tel．+81-3-3433-0351 Fax．+81-3-3433-8665 URL．http://www.jipm.or.jp/ |
| Japan Institute of Office Automation (JIOA) Activities: OA information exchanges／Surveys, researches and consulting／Others 3-1-22 Shiba Koen, Minato-ku, Tokyo 1050011 Tel．+81-3-3434-6677 Fax．+81-3-3459-1704 URL．http://www.jioa.or.jp/ |
| Japan Society for Technical Communication（JSTC） Activities: Undertaking technical document preparations／ English Technical Writing Test／Others 3-1-22 Shiba Koen, Minato-ku, Tokyo 1050011 Tel．+81-3-3434-2350 Fax．+81-3-3434-2486 URL．http://www.jstc.or.jp/ |
| JMA Consultants Inc.（JMAC） Activities: Management Consulting／Education and Seminars／Others 35Fl., Shiroyama JT Trust Tower 4-3-1 Toranomon, Minato-ku, Tokyo 1058534 Tel．+81-3-3434-7331 Fax．+81-3-3434-6430 URL．http://www.jmac.co.jp/ |
| JMA Systems Corporation（JMAS） Activities: Specializing in computer software 3-1-22 Shiba Koen, Minato-ku, Tokyo 1050011 Tel．+81-3-3431-7401 Fax．+81-3-3431-7063 URL．http://www.jmas.co.jp/ |
| JMA Research Institute Inc.（JMAR） Activities: Surveys and researches／Information services／Others 3-1-22 Shiba Koen, Minato-ku, Tokyo 1050011 Tel．+81-3-3434-6282 Fax．+81-3-3578-7547 URL．http://www.jmar.co.jp/ |
| JMA Management Center Inc.（JMAM） Activities: Human Resources and Manpower Development 3-1-38 Shibakoen, Minato-ku, Tokyo 1058520 Tel．+81-3-3434-2777 Fax．+81-3-3434-6204 URL．http://www.jmam.co.jp/ |
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Japan Management Association
3-1-22 Shiba Koen, Minato-ku, Tokyo 1058522 Tel.+81-3-3434-1601 Fax.+81-3-3434-1087 URL : http://www.jma.or.jp/indexeng.htm London Office 109 Parkshot House,5 Kew Road Richmond, Surry, TW9 2PR United Kingdom Tel. +44-20-8334-8923 Fax. +44-20-8334-8145 |