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Sustainable Management of Japanese Entrepreneurs in Pre-War Period from the Perspective of SDGs and ESG

Authors: Masaatsu Takehara, Naoya Hasegawa

Publisher: Springer Singapore

Part of: Springer Professional "Wirtschaft+Technik" , Springer Professional "Wirtschaft" , Springer Professional "Technik"

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About this book

This book features 13 Japanese entrepreneurs who made a significant contribution to the development of society from 1868, when modernization in Japan began, to the 1950s, after World War II. They worked on solving social issues at the time through their businesses and succeeded in creating social value by solving social issues and economic value through the development of their businesses.

The business philosophies they practiced have been passed on to their successors, and the companies they founded are now providing value to consumers around the world. Those 13 entrepreneurs anticipated the integration of solving social issues into corporate management, which modern companies are expected to realize under the umbrella of the Sustainable Development Goals (SDGs) adopted by United Nations in 2015. Their trajectories provide a wealth of practical knowledge necessary to survive in a changing society and provide many valuable lessons for modern companies and their managers.

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Table of Contents

Frontmatter

Management by Philosophy

Frontmatter

Chapter 1. Teigo Iba: A Pioneer of Management Aimed at Creating Shared Value

Abstract

As the CEO of Sumitomo Zaibatsu (industrial conglomerate), Teigo Iba focused on modernizing its business and organization. Sumitomo grew with the management of the Besshi Copper Mine in Ehime Prefecture as its core business and made a great contribution to the modernization of industry in Japan during the Meiji Era (1868–1912). However, the sulfurous acid gas generated from the copper smelting process in the Besshi Copper Mine caused smoke pollution and brought severe damage to the natural environment and agriculture in the area. Iba was transferred to the Besshi Copper Mine as a manager and he tackled to solve the smoke problem by relocating the copper smelter to an uninhabited island and leading a large-scale reforestation project. Today, Iba is recognized as a pioneer of CSR in Japan. Iba set the sustainable growth of companies and society as Sumitomo’s corporate philosophy, and entrusted its inheritance to Masaya Suzuki as Iba’s successor.

Masaatsu Takehara, Naoya Hasegawa

Chapter 2. Masaya Suzuki: Management Through “Itoku-shori”, Aiming for a Sustainable Society

Abstract

Masaya Suzuki served as the CEO of Sumitomo Zaibatsu as the successor of Teigo Iba. Suzuki inherited the spirit of Iba and realized (1) complete resolution of the smoke pollution problem at the Besshi copper mine, (2) penetration of corporate philosophy into the organization, (3) diversification of business, and (4) modernization of the organization. Suzuki pursued a business that benefited society, never pursuing quick profit. He also urged executives and employees to fulfil moral responsibility in order to gain trust from society and made it clear that Sumitomo would abolish a business that did not lead to fulfilling its moral responsibility. The efforts led by Suzuki to solve social issues have grown into big businesses. The production of chemical fertilizers developed as a measure against smoke pollution has evolved into Sumitomo Chemical, and the forestry business developed to protect the environment led to Sumitomo Forestry.

Masaatsu Takehara, Naoya Hasegawa

Integration of Economy and Morality

Frontmatter

Chapter 3. Ryoichiro Okada: Aiming for Integration of Economy and Morality

Abstract

Ryoichiro Okada was one of the disciples of Sontoku Ninomiya who created the idea of Hotoku thought. The “Zaihon Tokumatsu Thought” advocated by Okada said that activities that combined the pursuit of profits with the practice of social responsibility were ideal. The thought has many points in common with the philosophy of SDGs. While running his own bank and spinning company, Okada opened a private school and taught Western history and economics using original texts. He aimed at nurturing next generation leaders who had a global perspective based on Hotoku thought. Entrepreneurs such as Sakichi Toyoda (founder of Toyota Motor) and Magosaburo Ohara (founder of Kurabo Industries), who are featured in this book, adopted the Hotoku thought for the backbone of their business philosophies. A commonality among entrepreneurs who resonated with Hotoku thought is that they set the purpose of their business activities as fulfilling corporate social responsibility.

Masaatsu Takehara, Naoya Hasegawa

Chapter 4. Meizen Kinpara: The Pioneer of Social Business

Abstract

Meizen Kinpara was a social entrepreneur who was active in the Meiji era (1868–1912). Kinpara was successful in profit business, operating the transportation, sawmill, and banking industries. On the other hand, as a social entrepreneur, he diligently tackled flood control, reforestation, and protection and rehabilitation of ex-prisoners. In particular, in order to protect the local community from the flood damage of the Tenryu River, Shizuoka Prefecture, he invested his private property obtained from commercial business into developing the flood control activities. The national government highly evaluated Kinpara's insight on reforestation and entrusted the management of the Imperial Forest, a forest owned by the imperial family. We can see Kinpara's innovativeness as a social entrepreneur in the fact that he established a sustainable social business model by succeeding in the lumber industry that utilized the thinned timbers extracted from planted forests and the transportation industry which transported processed timber.

Masaatsu Takehara, Naoya Hasegawa

Chapter 5. William Merrell Vories: Toward a Socio-Economic System for Mutual Support Based on Stewardship

Abstract

William Merrell Vories came to Japan from the USA as an English teacher at the current Shiga Prefectural Hachiman Commercial High School to preach Christianity. With the cooperation of graduates from the school, he established the Omi Christian Mission and engaged in missionary activities. Setting the spirit of serving society through business, Vories established an architectural office to promote Western architectures renowned as Vories architecture, and he also imported and sold Mentholatum (now Omi Brothers Menterm). Vories viewed business as a social system to interact with neighbors, equal to social service activity as education, medical care, and evangelism. He practiced the idea that business was not for maximizing self-interest, but for creating shared value with stakeholders.

Masaatsu Takehara, Naoya Hasegawa

Value Creation Through Innovation

Frontmatter

Chapter 6. Jokichi Takamine: From Bioscience to the Intellectual Property Business

Abstract

Jokichi Takamine was a pioneer in Japan’s drug discovery and development bio-venture. He was a researcher and an entrepreneur. His experience as a patent officer at the Ministry of Agriculture and Commerce helped him succeed as an entrepreneur. After going to the USA, Takamine succeeded in extracting Takadiastase and adrenaline. Takadiastase is a form of diastase and is used as a stomachic, and adrenaline is today used as a hemostatic agent in surgery. These discoveries made Takamine the father of modern biotechnology in Japan. He established a patent management company, and acquired patents for Takadiastase and adrenaline both in Japan and overseas, successfully commercializing them. In later years, he founded the Japan Society in the USA and worked hard on cultural exchange and goodwill between Japan and the USA.

Masaatsu Takehara, Naoya Hasegawa

Chapter 7. Sakichi Toyoda: No Product, No Invention

Abstract

Sakichi Toyoda, the founder of Toyota Motor Corporation, went after the development of automatic looms, inspired by Ryoichiro Okada’s Hotoku thought and the entrepreneurs who supported the Industrial Revolution in the UK who were introduced in S. Smiles’ Self-help. Toyoda acquired self-taught knowledge and skills in mechanical engineering, and received high praise from the UK, a leading country in the development of automatic looms. A Toyoda G-type automatic loom is permanently exhibited at the British Science Museum, which focuses on the relationship between technology and industry/society. The characteristics of Toyoda as an entrepreneur were his ability to commercialize the technology seeds acquired through research and development and obtain patents for the developed technologies to utilize them in business as intellectual property. These two capabilities are indispensable for research and development ventures.

Masaatsu Takehara, Naoya Hasegawa

Chapter 8. Michio Suzuki: Customer-Oriented Business Strategy Utilizing Knowledge

Abstract

Michio Suzuki, Founder of Suzuki Motor Corporation, like Sakichi Toyoda (Founder of Toyota Motor Corporation), created a loom by taking advantage of his experience as a carpenter. Through his unique technology development, Suzuki succeeded in developing a sarong loom which was capable of weaving complicated patterns and established a position as a loom manufacturer. However, fearing the future of automatic looms, which had long product life, Suzuki attempted to enter into the motorcycle and automobile industries. He developed a prototype car before the Second World War, and after the war, he succeeded in developing a mini car based on the success of motorcycles. Suzuki’s strong leadership to meet the needs of customers transformed the domain of his business from automatic looms to automobile manufacturers. A characteristic of Suzuki as an entrepreneur was his ability to innovate, not sticking to successful experiences and constantly taking on challenges in new fields.

Masaatsu Takehara, Naoya Hasegawa

Chapter 9. Shojiro Ishibashi: Pioneer of Automobile Tire Manufacturing in Japan

Abstract

Shojiro Ishibashi was the Bridgestone founder. He, like other entrepreneurs in the same era such as Sakichi Toyoda and Michio Suzuki, succeeded in domestic production of tires based on the technology accumulated in traditional industries. Ishibashi utilized his existing technologies to stimulate demand in related fields and entered into other industries. Ishibashi kept the manufacturing cost and selling price low and secured appropriate profits. Then, enhancing brand with customers’ trust and originality, he continued to work on management reform. At the end of World War II, Ishibashi disobeyed a military order and returned to the Goodyear Java factory with no damage. The factory was requisitioned by the Japanese army and entrusted to Ishibashi to manage. This strengthened the bond between the two companies and provided a foothold for Bridgestone to grow significantly as a tire manufacturer. The characteristic of Ishibashi as an entrepreneur was that he had the ability to grasp social needs from a long-term perspective and develop them into business opportunities.

Masaatsu Takehara, Naoya Hasegawa

Management that Enhanced Human Capital

Frontmatter

Chapter 10. Magosaburo Ohara: The Pioneer of CSR Who Challenged the Realization of Labor Idealism

Abstract

Magosaburo Ohara, the founder of Kurabo Industries Ltd. and Kuraray Co., Ltd., is recognized as a Japanese entrepreneur who successfully achieved both business and corporate social responsibility. Advocating labor idealism as his management philosophy, Ohara enhanced management quality by improving employee motivation. While managing various businesses, Ohara also had a deep interest in social issues. He established a school and a hospital, helping to bring happiness to people in his company and community. The legacy he left has been contributing to Japanese society. The Ohara Institute for Social Research was transferred to Hosei University and is still actively conducting research activities. The Ohara Museum of Art attracts many visitors by housing masterpieces such as Monet and El Greco. The museum was removed as a target by the US military during the Second World War, eventually saving the community. Ohara’s efforts for society were ahead of the SDGs that modern companies are expected to work on.

Masaatsu Takehara, Naoya Hasegawa

Chapter 11. Tsurukichi Hatano: Creating Value Through Effective Human Resource Management

Abstract

Tsurukichi Hatano, the founder of Gunze Silk Manufacturing Company, Limited (currently Gunze Limited), aimed at the independence of the local community based on the traditional industry of sericulture in Kyoto. Making sericulture farmers Gunze’s shareholders by giving them company’s shares, Hatano enhanced the sense of unity between the company and the local community. Thinking that the personality of the maker determines the quality of products, Hatano established a school within the company and focused on increasing the motivation and morale of its employees. It was mission-based management that supported the growth of Gunze. Hatano’s belief that a company exists for its stakeholders enhanced the trust of local communities and employees and created products with internationally recognized quality. Hatano, a Christian, practiced altruism based on Christianity and Hotoku thought in his business activities, and dedicated his whole life to realizing the well-being of stakeholders both materially and spiritually

Masaatsu Takehara, Naoya Hasegawa

Creating Social Solutions

Frontmatter

Chapter 12. Kenkichi Kagami: Founder of Insurance Business in Japan

Abstract

Kenkichi Kagami was the person who laid the foundation for Japan’s property and casualty insurance industry. After the Meiji Restoration starting from 1868, Japan introduced a non-life insurance system developed mainly in the UK, but many Japanese managers lacked expertise on insurance. The Tokio Marine Insurance Company, Japan’s first non-life insurance company, fell into financial difficulties from its establishment. Kagami, who had high language skills, was assigned to the London branch, and carried out due diligence and quantitative analysis of the contracts himself and saved Tokio Marine from the crisis. In addition, Kagami established a reinsurance network in London to support the revival of Tokio Marine. Kagami emphasized the importance of gaining trust in the insurance business, saying that trust was an intangible asset, but this intangible asset would generate tangible asset of profit. Kagami’s management was highly recognized internationally.

Masaatsu Takehara, Naoya Hasegawa

Chapter 13. Tsuneta Yano: Established a Life Insurance Business Through Mutualism

Abstract

Tsuneta Yano, founder of Dai-ichi Life Insurance Company, started his career as an insurance doctor for Nippon Life Insurance, and then he was involved in enacting the Insurance Business Law as the first director of the insurance department of the Ministry of Agriculture and Commerce. Yano argued, based on the spirit of mutual aid, that life insurance was an economic system for maintaining a society where people live in harmony. Thinking his mission was to establish a mutual life insurance company, Yano established Japan’s first mutual life insurance company, Dai-ichi Mutual Life. Aiming to be the best insurance company, not the largest, Yano practiced scientific product development based on actuarial and statistical data. He pointed out as factors for successful insurance business “scientific validity of business plans” and “importance of trust”. In addition to the insurance business, Yano worked on the development of statistical data and publication of data books, which are widely used today in the field of education.

Masaatsu Takehara, Naoya Hasegawa

Backmatter

Title: Sustainable Management of Japanese Entrepreneurs in Pre-War Period from the Perspective of SDGs and ESG
Authors: Masaatsu Takehara
Naoya Hasegawa
Copyright Year: 2020
Publisher: Springer Singapore
Electronic ISBN: 978-981-15-6507-6
Print ISBN: 978-981-15-6506-9
DOI: https://doi.org/10.1007/978-981-15-6507-6