Slowly-Changing Management Visions in Mid-Sized Corporations
■ASIA FORUM
Information Report Vol.6,No.2
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December 10, 2003
The printing industry as a manufacturing industry has improved remarkably in productivity supported by technological advances, which, however, caused a glut, a serious problem for the industry. Is there any way out of this situation that has been generated through an imbalance between supply and demand? A hearing conducted by JAGAT covering medium-sized printing firms operating in Tokyo Prefecture clearly suggests ways in which management visions in these companies, most of them faring relatively well, are slowly changing. However, the mid-sized printing companies as a whole have probably reached a point where paying attention only to the activities of rivals is not sufficient to navigate dynamic change in business environments. ■ What are business leaders interested in? A hearing was conducted to hear opinions directly from the heads of mid-sized printing firms on how their companies have been responding to the changing business environments faced by the printing industry, what the issues are that they are most interested in now and how they are going to deal with them. For the hearing, 25 firms were randomly selected from among JAGAT members operating in Tokyo Prefecture with 30-150 employees, of which the heads of 15 firms agreed to participate. JAGAT commissioned Insatsu Keiei Soken to perform the task, and investigators from Keiei Soken then interviewed them between mid-March and early-April. To identify the areas business leaders are interested in, the interview focused on questions about methods of self-enlightenment, factors of success, the future outlook, and means of information gathering. The 15 respondents varied widely in age, ranging from their thirties to seventies, and some of them were corporate founders while others were second-, third-, or fourth-generation leaders. Of the 15, the largest group, or seven, has been involved in management for less than 10 years (six of them for less than 5 years), while three have been serving as president for over 40 years Representative answers and the respondents' profiles partially recognized from the answers are shown below. Profile of the target companies Major business (in number of firms)
Years since foundation (in number of firms)
Age of the head (in number of persons)
Generation of the head (in number of persons)
Years in management (in number of persons)
■ Active participation in study meetings is not very common In the area of self-enlightenment, only four were active, citing 'constant participation in study meetings hosted by Mirai Joho Kenkyukai (consisting of 33 firms of the industry),' 'participation in study meetings hosted by Keiseishijuku (a cross-industrial exchange group) and other cross-industrial study sessions,' 'participation in creative seminars hosted by the Japan Creative Management Association,' and 'exchanges with companies in other industries as a board member of the Japan Junior Chamber.' These four people also mentioned 'participation in seminars hosted by the Chamber of Commerce and Industry, Mitsubishi Research Institute, or JAGAT,' that 'experiences described by other business leaders at the meeting of the Association of Small Business Entrepreneurs have proven very helpful,' and that 'I have actively attended study meetings and seminars, and now encourage my employees to do the same thing and submit a report, which I never forget to read.' Apart from these four,others answered that they were 'a member of the Association of Small Business Entrepreneurs,' which is a place for cross-industrial exchanges, or 'serving as a member of the junior section of the Tokyo Printing Industry Association with a view toward inter-development and self-enlightenment.' On the other hand, there were respondents who answered 'I am a member of a few groups but cannot attend meetings because they are held weekdays during the daytime,' 'I used to attend some but not any more,' or 'I have never participated in any study or lecture meeting,' suggesting their lack of time for this type of activity. Overall, the respondents seem to place emphasis on association with people in the same trade rather than self-enlightenment, as represented by the answer 'I attend meetings to meet people and develop personal connections.'
Of the 15, eight named golf as their hobby. They appear to play golf mainly for entertaining customers or socializing. There was one answer that implied the respondent's personality, 'I do not like losing.' ■ 'Human assets' combined with technology & quality contribute to success As factors and key corporate elements of success, ten interviewees cited 'human resources,' particularly 'human resources as corporate assets.' They answered their success is attributed to 'potential creativity and ingenuity within individuals,' 'individuals' capability of resolving customers' problems using knowledge and know-how,' 'human resources utilized as generalists rather than specialists,' 'human resources and teamwork,' 'the presence of fine engineers,' and 'an improved turnover after raising the mandatory retirement age.' One person emphasized the significance of top management's serving as a model, saying that he 'believes in the philosophy 'muddy waters run downstream,' and has made efforts to establish a relationship of mutual trust with employees, which has cultivated confidence and motivation among them.' He concluded that 'human resources are the key to everything.' The second largest group, or nine interviewees, chose 'customer-oriented policies' as the reason for their success. They mentioned they have 'strived to meet the requirements of customers,' 'carefully listened and responded to clients' opinions with a user-oriented mind,' 'won an edge in the market through detailed customer support,' 'been able to flexibly meet the needs of customers, as the company had started without technical expertise and had a non-biased view,' 'been helped by customers,' 'valued ties with customers, which allowed the company to win customer trust and more dealings,' and 'anticipated the needs through the bonds of trust.' Eight cited factors related to technology and quality, such as 'the adoption of high-resolution printing,' 'aggressive investment in technology,' 'active equipment investment before anyone in the industry,' 'improved quality of management through the acquisition of ISO 9002 certification,' 'differentiation by unique products and the development of a special paste,' 'the development of an original composition system on the basis of tradition and sophisticated technology,' and 'early deployment of a web offset press that enabled an integrated printing process.' Some of them expressed their pride in the printing business by referring to their 'self-esteem in the present business, which has long contributed to the inheritance of wisdom and culture' and 'honest dedication to the core business.' Others factors cited include 'the adoption of proposal-based business style,' 'the shift of focus from being 'good, fast, and cheap' to 'fast and good',' 'having an edge in production costs,' 'having focused on the expansion of marketing channels by designating the Tokyo branch as the dedicated marketing center,' 'careful planning and a grand dream,' and 'completely ensuring healthy financial standing.' ■ Future business is heading for three directions Future business directions are roughly divided into three: (1) Make internal endeavor and continue on the path that has been taken, (2) Abandon conventional practices by changing relationships with customers, (3) Enhance the corporate strength by improving the quality of management and products. Answers that fell in (1) the conventional path include 'increasing the amount of in-house output,' 'reforming staff consciousness (especially cost consciousness) using QC,' 'enhancing in-house capabilities of designing and planning,' 'emphasizing balance between production capacity, quality, and cost allowance,' 'pursuit of cost reduction and quick delivery,' 'valuing face-to-face business,' 'growth by appealing technical capabilities,' 'emphasizing staff creativity,' and 'establishing an integrated printing process through M&A.' Answers that fell in (2) the departure from conventional practices include 'collaboration with customers through the use of the Net and IT,' 'introducing a digital camera studio,' 'constructing a database to increase order intake,' 'opening a web site to provide quotations for publishing by the author,' 'offering outsourced sale promotion to customers,' 'posting content on the web,' 'correctly grasping end-user needs,' 'independence from paper media and the utilization of POD,' and 'value-added marketing.' Answers that fell in (3) the enhancement of corporate strength were 'pressing ahead with environment-oriented businesses and promoting the widespread use of water-less printing, soybean ink, and recycle paper,' 'the development of new products and technology as an extension of the current business (earmarking 2% of sales for R&D and 1% for human resources development),' and 'acquiring ISO 9000 and ISO 14000 certification.' ■ Sound management is the key to addressing the next change Since many of the respondents have been heading the company for less than five years, they have yet to face the immediate need to choose a successor. The survey showed that five have already selected a successor and three have candidates, suggesting they are taking their time. One answered he is going to select a successor from among the employees. Regarding business challenges, the most common answer was 'improved financial standing,' reflecting the harsh business climate. Other answers include 'employee education to reform their consciousness, presidential leadership, and the formulation of a long-term business plan,' 'the development of human resources, empowerment and organization administration, the acquisition of ISO certification, and the creation of encouraging work environments,' 'the internal announcement of corporate performance to foster a sense of independence among individual employees through a mid-term corporate reform.' Each leader interviewed appeared to be seeking a new direction in response to changing environments, while securing a footing in the present business. To this end, business leaders are giving highest priority to 'human assets' and paving the way to survival in difficult times by using their own initiatives and serving as models.
A passive attitude and a tendency to follow peers, both of which often prevail in an order-initiated industry, must be abandoned as quickly as possible. What this survey has demonstrated is how mid-sized printing businesses, which have successfully gained a solid footing through healthier financial standing and improved management quality in the face of social changes, are opening up new business opportunities step by step and slowly transforming themselves to navigate the changing times. 2003/12/04 00:00:00 |