My opinion this week(107):
Introduction of Executive Officer's system
Many Japanese firms started to introduce Executive Officer's system these
days. It became very popular among many big firms such as Toshiba, Daiei,
Bandai and so forth.
Executive Officer's system is a very common management system used in the
United States where management of the firms is handled by a board of executive
officer's entrusted by the board of directors which is the top decision making
function of a firm.
The reason why Executive Officer's system has begun to draw much attention
among many Japanese firms is directly concerned with the fact that the
operation of many Japanese firms has greatly been deteriorated recently.
Firstly, the introduction of such new top management system is a part of
restructuring effort of management to reduce some number of members of
board of directors to make expense reduction. Secondly, the board of
directors themselves in the past have not functioned as they are designated
by a law and/or management theory. As a result of this reflection, many top
management of Japanese firms are now trying to change their management system
replacing board members to executive officers in charge of each groups of
operation of the firm. The systems is to be introduced because that kind of
system is said to work well in the United States.
Many Japanese firms started to introduce such system since the beginning
of the last year. According to my observation, however, such system will
not immediately work well as many top management of Japanese firms expect.
In Japan, the board of directors meeting itself has not functioned well as
a top decision making function. In many firms , decision making is virtually
done by another internal function such as Jyoumukai (Senior Managing Directors
Meeting) , or by a dictatorship of the president. In the conventional board
of directors, directors are usually nominated and appointed by a president
and they rarely express their own opinions which are against the opinion or
intention of those top managers. There may be some exception, of course. But
many of board of directors meeting in Japan have been just a nominal
existence in the past.
It is understood that some top management of Japanese firms are now trying
to correct such situation by introducing this new system. But those executives
who are forced to resign a board members and newly appointed to executive
officers will not change drastically as they are expected so in new system.
The basic process of decision making has not changed so much. It is not
expected that any of such group meeting will be activated dramatically for
the reason that they introduce such new system.
In Japan, promotion to a member of the board of directors has been a final
target for promotion ladder of every business people. The morale of those
newly appoint executive officers who are not board member any more will be
deteriorated very mach by loosing such important title.
Lastly and most importantly, I would like to point out the fact that it is
the most important to activate the contents of meetings and debate process
regardless it is a board of directors meeting or board of executive officers
meeting. It is the most important to activate any decision making process
through a group discussion and argument which lacks now in any meetings in
Japanese organization.
1999/3/6
Tadashi HAYASE
My opinion this week(108):
The legislation of National Flag and National Anthem
A new move to legislate National Flag and National Anthem has emerged
recently. A principal of one of a high@school in Hiroshima killed himself
a couple of weeks ago. He was in dilemma between the instruction by the
school board of the Prefecture to hoist the National Flag and to sing the
National Anthem at some special occasions of such ceremonies as entrance
to school and graduation from school. Since this accident has happened,
most political parties have started to offer to legislate the National
Flag and the National Anthem to avoid such tragedy again.
It has been my long belief that National Flags and National Anthems are
decided by laws in any countries in the world. But that is not true.
According to a report by a newspaper, there are several different cases
as far as this matter is concerned. Some countries have such legislation
and some don't. Some countries use their National Flag and National
Anthem as their long established customs in the history of their country.
Regardless such difference, we see no such long dispute existed in Japan
between the Ministry of Education and the Japan Teachers' Union in other
countries. The question is not limited to whether or not the National
Flag and the National Anthem are to be legislated. The ideal situation is
that the National Flag and the National Anthem are hoisted and sung in
natural and custom way by people whether or not they are designated in a
law.
Take the United States, for an example, the Flag and the Anthem were
both legislated. In any places including schools of any kinds, they are
hoisted and sung very ordinary. It seems that people accept them very
naturally and frankly. I had several chance to see professional baseball
games and foot ball games in the United States and saw that all spectators
stand up and sing the National Anthem at the start of any games without
any hesitation and resistance. In Japan, Pacific League introduces the
same routine at the start of games. But I see not all spectators follow such
ceremony in any orderly way. Some spectators do not even stand up although
they are asked to do so by the stadium.
If I were asked to express my opinion as to yes or no to make such laws,
I would say yes at this time. However, the real issue is not limited to
that point. The question is: Do we we have to obey that practice because
that is decided by laws. No, that is not the point.
The point is that the National Flag and the National Anthem are the one
by which every people recognize their identity as a people of the nation.
What's long with that to have that kind of identity? Why do some people
have an objection to follow that practice? They should be hoisted and sung
in a kind of natural way without any of such resistance by some group of
people. But, if the legislation is necessary as a first step to create such
feeling among people , I would agree with that at any rate.
1998/3/13
Tadashi HAYASE
My opinion this week(109):
JT's expensive shopping
"JT (Japan Tobacco Corporation) has bought the Overseas Department of Nabisco
Tobacco Corporation by 7,800 million dollars. This the largest amount of
money ever paid by Japanese firms to buy foreign business firms. As a
result of this procurement, JT will become No.3 largest tobacco company in
the world. When I read the news in newspaper, it happens to come to my
mind that this shopping is out of focus in a way as far as their strategic
business decision is concerned. " I wrote this comment in the Business
Salon of BizTech Forum in this way last week.
E"Jt's purchase of US tobacco business is another example of anachronism
of a Japanese firm. " by rnomani
EJT is getting high monopolistic profit through tobacco business. But
the decision making at this time is very poor. Are they trying to
increase another smoking people? The broker who sold the business
to JT must be very happy with this success.
Those two comments are from two constant participants to the Forum. I
agreed with those two. This news was a top headline of Nikkei Newspaper
on March 10th, 1999. The procurement value, 7,800 million dollars was the
highest ever paid by Japanese firms. JT will become the third largest
tobacco compnay in the world as a result of this acquisition intended to
survive in the market. The stock price of Nabisco raised up tremendously
soon after that this news was reported. That is easily expected. As
rnonami commented, Nabisco could have sold out their big bad debt with
such a good price.
No further comments or explanation was in Nikkei Newspaper except those
facts mentioned as above. Including Nikkei Newspaper, JT has been a big
sponsor for big advertisement on cigarette smoking. It is not so difficult
to guess that those news media would avoid any of the aggressive comments
on the validity of such procurement.
JT monopolizes tobacco business in Japan. And is it a common view among
business world that JT's business strategy to become No, 3 tobacco company
in the world is a kind of natural course of action? I don't think so.
It is obvious that tobacco business is fading out from the market soon or
later in the 21st century. I have no intention to comment whether or not
habit of cigarette smoking is good or not. However, it is very clear that
non smoking movement will spread out world wide because of the fact that
smoking is not good for health and is providing some serious effect on
non smokers. Such move is very clear.
Under such social and business environment, I wonder why JT, one of a
representative business firms of this country has made such decision. There
are no room for us general consumers and public to complain about their
advertisement in many of mass media to stimulate cigarette smoking.
I don't deny the fact that the main source of revenues for the firm
is tobacco at the moment. But do they have to continue this even in the
future? I imagine that many of consumers and shareholders expect that
they will change their business strategy in one or the other. As a
matter of fact they have tried to go into new markets by procuring
such fields as food industries and fast food business. Under this circumstance
why have they taken this action at this time?
I know that it is no use to say this kind of thing by such a man like me
who is neither customer or shareholder of the firm. But I would like to
expect this company like JT which is one representative firm in Japan
to be more smart and aggressive to reflect real needs of people and
market in the 21st century.
1999/3/20
Tadashi HAYASE
My opinion this week(110):
Easygoing manpower reduction
"Mr.Amari, Minister of Labor, expressed his concern about the tendency in
the business world that many business firms are trying to make an easy going
reduction of manpower these days. He expressed his concern in the regular
Economic Ministers Conference in the Cabinet and quote : any management to
keep the current level of employment is not evaluated at all. When any
firms announce the reduction of manpower, their stock prices go up. If any
announce to keep the number of employees at the present level , their stock
prices go down. I have some doubt about such tendency to appreciate the
reduction of manpower today. Some business executives expressed the same
doubt about such tendency. I believe that the government should express our
evaluation to any of such management which try to keep employment rather
than reduction. " -- March 17, Nikkan Kogyo Newspaper --
What a surprising comment it is ! Does Mr. Amari believe that any business
executives try to make manpower reduction in order to raise stock prices of
their firms? What in the world do any business executives willingly make
manpower reduction in any occasions? In any circumstances, they are obliged
to cut manpower in order to keep their business operation at that moment.
Of course, there are some cases that they cut some number of employees
although they are not in any serious business condition. They see the
prospect of their business in the future and reduce the cost of manpower
preparing for the operation in the future. For example, Sony has conducted
such manpower reduction recently. Sony's financial condition is not so bad
compared with any average business firms in Japan. But Sony has started
restructuring their business including subsidiaries preparing for the future.
This action by Sony is very different from any serious restructuring which
most ordinal business firms are now conducting. In Sony's case, they can
provide some extra advantageous measures to their employees.
The Dow Industries average of New York hiked beyond 10,000 dollars on the
same day of this news, although it is only temporally. There are some concern
about such high stock price among many analysts. However, there are so many
firms listed in the Dow group, their financial results of which are so good.
Take IBM, for an example. A few years ago, they drew a big attention among
business world about the fact that they had conducted some large scale
manpower reduction regardless their fairy good financial result at that time
of the year. Their excellent financial condition today is due to such strategic
action in the past years.
It is understandable that the Ministry of Labor expressed such comments
hoping that the Government authorities desire to keep the employment level.
However, any business firms can maintain their employment level or create
new employment only under such circumstance that they can attain a kind of
good operation of their business. The operation of private business is
entirely different from that of central and local government offices where
any level of employment may be maintained regardless their business
efficiency. In the case of private firms, if any firms cannot create profit
and enough cash flow to maintain their daily operation, they would go
bankrupt. All top executives, managers and employees of the organization
will loose jobs as a result.
In the past years, any Japanese business enterprises used to keep employment
level although their business conditions got deteriorated under the
conventional life time employment system and concept. There still remains such
tradition in some cases. But under today's serious economic recession , many
firms are now obliged to discard such past tradition and customs and to take
a drastic manpower reduction measures as necessary.
There are no such business executives who are critical about current tendency
in business concerning the reduction of manpower as Labor Minister Amari
commented. All top class business including NEC, Sony, etc., or even including
city banks are now taking action to cut labor cost to survive in business.
All executives in business know that it is now unavoidable.
I guess that any economic ministers including Minister of Labor have only
that level of recognition and understanding about management of private firms.
The same necessity exits for government sectors to make significant reduction
of manpower cost to attain administrative reforms underway in the coming
years. But it is guessed that it may be quite difficult for them to attain
such purpose this by themselves.
1999/3/27
Tadashi HAYASE
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