Timeless ventures : 32 Japanese companies that imbibed 8 principles of longevity PDF
Preview Timeless ventures : 32 Japanese companies that imbibed 8 principles of longevity
Timeless Ventures 32 Japanese Companies that Imbibed 8 Principles of Longevity Timeless Ventures 32 Japanese Companies that Imbibed 8 Principles of Longevity Haruo Funabashi Visiting Professor, Hitotsubashi University Graduate School of International Corporate Strategy, Tokyo Tata McGraw-Hill Publishing Company Limited NEW DELHI McGraw-Hill Offices New Delhi New York St Louis San Francisco Auckland Bogotá Caracas Kuala Lumpur Lisbon London Madrid Mexico City Milan Montreal San Juan Santiago Singapore Sydney Tokyo Toronto TataMcGraw-Hill Published by Tata McGraw-Hill Publishing Company Limited, 7 West Patel Nagar, New Delhi 110 008 Copyright © 2009, by Tata McGraw-Hill Publishing Company Limited. No part of this publication may be reproduced or distributed in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise or stored in a database or retrieval system without the prior written permission of the publishers. The program listings (if any) may be entered, stored and executed in a computer system, but they may not be reproduced for publication. This edition can be exported from India only by the publishers, Tata McGraw-Hill Publishing Company Limited. ISBN 13: 978-0-07-007782-9 ISBN 10: 0-07-007782-7 Managing Director: Ajay Shukla Head—Professional and Healthcare: Roystan La’Porte Publishing Manager—Professional: R Chandra Sekhar Junior Sponsoring Editor—BGR: Dipankar Das Production Executive: Rita Sarkar Manager—Sales and Marketing: S Girish Controller—Production: Rajender P Ghansela Asst. General Manager—Production: B L Dogra Information contained in this work has been obtained by Tata McGraw-Hill, from sources believed to be reliable. However, neither Tata McGraw-Hill nor its authors guarantee the accuracy or completeness of any information published herein, and neither Tata McGraw-Hill nor its authors shall be responsible for any errors, omissions, or damages arising out of use of this information. This work is published with the understanding that Tata McGraw-Hill and its authors are supplying information but are not attempting to render engineering or other professional services. If such services are required, the assistance of an appropriate professional should be sought. Typeset at Bukprint India, B-180A, Guru Nanak Pura, Laxmi Nagar, Delhi 110 092 and printed at Gopsons Papers Ltd., A-2 and 3, Sector 64, NOIDA-201 301 RAZYCDDFRQZZB To the young entrepreneurs Praise for Timeless Ventures “Prof. Haruo Funabashi’s book is based on research into the long-lived companies in Japan. What this book suggests, is the application of philosophy to daily work life, which is not only valid but also useful in today’s world. The principles…distilled from it, for instance, respect for people, continuous improvement, long-term vision and so on, are essential and indispensable to building sustainable businesses, the economy and society at large”. Hiroshi Okuda Senior Advisor and Member of the Board, Toyota Motor Corporation, Former Chairman of Japan Business Federation “The business world needs an insight into the reasons why centuries old companies survive in Japan in marked contrast to the demise of their much younger counterparts in the western world. This book seeks to investigate this phenomenon, and provides some answers. It is obvious that long-surviving companies must integrate with the communities in which they are set up and in which they operate. There is a lesson here that one can learn from Japan. In India also, we are now realizing the importance of the company-community integration for the well being of both”. Jamshed J. Irani Director, Tata Sons “Business for people or people for business is a dilemma often faced by those in business. It is not rare to see people subscribing to the former but actually practising the latter. Prof. Funabashi’s book, replete with considerable data and insightful research, establishes without doubt the attributes that make a business survive and prosper for decades and even for centuries, and it is the business for people precept that clearly comes out as the anchor for longevity and prosperity”. Kishor A. Chaukar Managing Director, Tata Industries viii Praise for Timeless Ventures “…In recent times, we talk more about building big businesses than on how to make them last. Prof. Funabashi’s attempt to draw out elements of longevity from different types and sizes of institutions in Japan is interesting. On one hand, it reminds us about long-lived movements in India like the over twelve hundred year old Sringeri math of Karnataka or the Warkari and Nath Sampraday in Maharashtra, and so on. On the other, it is about a subtle synthesis and the influence such movements could have on the day-to-day running of our businesses and institutions. I was inspired by the book”. Jitendra B. Divgi CEO, Divgi-Warner Foreword In India, we generally do not equate a family-run business with longevity. The impression that many of us have is that family-run organizations are not “professionally” managed, whatever that is supposed to mean, and therefore tend to break up or fail by the time the second or at best the third generation of the family is at the helm. Professor Funabashi’s very incisive and relevant study of long-lived Japanese organizations, most of which are family-run, tends to refute this argument and points to a far more meaningful cause for the malaise that faces our family-run organizations. If the term “professional management” is supposed to mean management of an organization by people who are well-qualified in management, there are enough examples of family-run organizations which have been managed by highly qualified family members and which have still disintegrated. It would seem, therefore, that the answer lies elsewhere. Professor Funabashi has equated the longevity and sustainability of organizations with a certain set of organizational objectives. He has also shown that in long-lived Japanese companies, these objectives have been long term and aimed at benefiting the society rather than individuals. These two approaches, to me, are at the heart of the success in sustaining organizations and contributing to their longevity. Individual benefit and organizational sustainability make incompatible bed fellows. The business environment is replete with examples of this incompatibility. Western culture has emphasized the importance of the individual over that of the society whereas Eastern philosophy emphasizes the importance of society. Unfortunately, Indian business practices have been modeled largely on western philosophy even though in so many other aspects of our lives, we replicate eastern thought. This, to my mind, is the reason for the lack of sustainability of our business enterprises. On the other hand, if one needs any example of a sustainable enterprise, all we need to do is look at the house of Tatas. Jamsetji Tata’s business philosophy was: “thus the cycle is complete, what came from the people has gone back to the people many times over”. This became the objective x Foreword of all Tata companies. To ensure that this happened, Jamsetji structured the ownership of his enterprises in such a way that eighty percent of the equity of the original company, Tata and Sons, was owned by charitable trusts, and so eighty percent of their profits would go back to the people in form of developmental programs created by the trusts. Even today, over sixty percent of the equity of Tata Sons, the parent company of the Tata group, is owned by the various Tata trusts, which gives back generously to society. For instance, the Tata trusts have been responsible for the creation of pioneering institutions of national significance—The Tata Institute of Fundamental Research, Mumbai; The Indian Institute of Science, Bangalore; The Meherbai Tata Cancer Research Hospital, Mumbai; the National Centre for the Performing Arts, Mumbai and hundreds of other projects for the benefit of Indian community. Most importantly, the individual profit motive has been removed by an exemplary leadership and its impact at all levels is that the officers leading and governing Tata companies are able to concentrate on building institutions and the nation. Uncompromising business ethics and adherance to the objectives of their organizations have enabled the house of Tatas to lead for over 130 years and still grow!! If Indian industrial organizations are to be sustainable, they need to clearly define their objectives and ensure that these aim at contributing to society rather than any individual or group of individuals, while also addressing the future goals of the society at large. I believe that Funabashi’s book rightly emphasizes on how business with principles and vision of the future helps all types and sizes of businesses to overcome obstacles to endure and grow for centuries. Sarosh J. Ghandy Regional Director Caux Initiatives for Business, Bangalore
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