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LIXIL

Home / Posts Tagged "LIXIL"

Tag: LIXIL

Japanese companies divest as well as invest in Europe

The eagle eyed will have spotted that our revised ranking below for the top 30 largest Japanese employers in Europe for the year ending 2016 is not quite in rank order.  Only a third of the reports covering the financial year ending 2017 are available but based on what we can dig out, we can say that acquisition hungry Nidec have topped 10,000 employees in Europe so will be higher than their 2016 ranking.  Dentsu Aegis have also been gobbling up agencies and Bridgestone has acquired a couple of tyre companies in France.

Some of the more established technology brands have been acquiring around Europe too such as Panasonic (Ficosa in Spain, Zetes in Belgium), Konica Minolta (Mobotix in Germany, Dactyl & OMR in France) and Sony (eSaturnus in Belgium, Plumbee and Ministry of Sound and TruTV in the UK).

At the same time, Japanese companies are beginning to consider exiting investments, which is a relatively new development.  Some have had this forced on them of course, like Toshiba selling Landis & Gyr and Westinghouse. Lixil was a new entrant into the top 30, having acquired Grohe, the German bathroom company and Permasteelisa, the Italian construction company but is now in the process of selling the latter to a Chinese company. “It may have been forced to sell assets it had trouble integrating” according to a source quoted in the Financial Times.

Hitachi, having acquired German company Metabo in 2015/6 is now selling it off with the sale of its power tools division to KKR.

Toshiba may well fall out of the rankings as a consequence of selling off its businesses and Takata may no longer qualify as a Japanese company, as it is about to be acquired by Chinese company Key Safety Systems.

For the full report of the M&A activities of the biggest Japanese companies in Europe, please contact Pernille Rudlin (pernilledotrudlinatrudlinconsultingdotcom)

Top 30 Japanese companies in Europe 2021

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Why work for a Japanese company? (#1) Corporate Social Responsibility

For most Japanese companies, despite recent changes to corporate governance and the occasional scandal, the main motivation is the long term survival of the firm, not shareholder value maximisation.

Obviously you have to make some money to invest back into the company to survive, but above all longevity means being a good citizen in the environment and communities you operate in. There are some exceptions to this of course, but by and large, Japanese companies are pretty sincere about corporate social responsibility, to the point where I used to joke when I worked in corporate communications in a Japanese IT company, that if we didn’t watch out, our mission statement would be identical to every other Japanese technology company’s mission statement as it could be summarised as “contributing to society through innovation”.

So if you are looking to work for a company that will be supportive of your wish to make a positive contribution to society, then you may find Japanese companies congenial places to work.

Some are more active in CSR than others, so when Toyo Keizai has published its latest rankings by industry, we matched these to our Top 30 Europe, UK and Germany largest Japanese employers rankings and put them in rank order as below.

As Toyo Keizai points out, it is easier for manufacturers to score highly in their CSR rankings, which is why they dominate the top 50 overall, and also why Toyo Keizai publishes rankings by industry, to ensure like for like comparisons are made.  Banking and financial services are not included in their analysis. Toyo Keizai explains its scoring system (in Japanese) here.  It has around 150 criteria, across the categories of diversity (gender, age, disability), environment, corporate governance and social contribution.

  • Fujifilm – #1 overall and #1 in pulp/paper/chemicals
  • Canon #4 overall and #1 in electronics and fine engineering
  • Denso #8 overall and #1 in automotive
  • Ricoh #9 overall and #3 in electronics and fine engineering
  • Konica Minolta #12 overall and #4 in electronics and fine engineering
  • Honda #14 overall and #2 in automotive
  • Nissan #17 overall and #3 in automotive
  • Daiichi Sankyo #25 overall and #1 in pharmaceuticals
  • Toyota #28 overall and #4 in automotive
  • Fujitsu #30 overall and #9 in electronics and fine engineering
  • Astellas #34 overall and #2 in pharmaceuticals
  • Sumitomo Rubber 36th overall and #2 in oil/rubber/glass/ceramics
  • Mitsubishi Corporation #42 overall and #1 among trading companies
  • Lixil 44th overall and #1 in metal products
  • Sony #45 overall and #12 in electronics and fine engineering
  • Nidec #49 overall and #13 in electronics and fine engineering
  • Takeda #50 overall and #4 in pharmaceuticals
  • Sumitomo Electric Industries #52 overall and #2 in metal products
  • Itochu #55 overall and #2 among trading companies
  • Panasonic #57 overall and #15 in electronics and fine engineering
  • NYK #58 overall and #1 in logistics
  • Japan Tobacco 60th overall, 3rd amongst food companies
  • Brother Industries #71 overall and #16 in electronics and fine engineering
  • Sumitomo Corporation – #73 overall and #3 amongst trading companies
  • NTT Data #75 overall and #4 in telecommunications
  • Olympus #84 overall and #17 in electronics and fine engineering
  • Dentsu #95 overall and #2 out of service sector companies
  • Sumitomo Heavy Industries #138 overall and #11 amongst machinery companies
  • Calsonic Kansei #138 overall and #18 in automotive
  • Fast Retailing (Uniqlo) #531 overall and #19 out of 20 amongst retailers

 

 

 

For more content like this, subscribe to the free Rudlin Consulting Newsletter. 最新の在欧日系企業の状況については無料の月刊Rudlin Consulting ニューズレターにご登録ください。

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Top 30 Japanese employers in Germany in 2017 includes Takata at #3 – who’s about to become Chinese…

The bankruptcy of Takata and acquisition of its assets and operations by a Chinese owned US based company Key Safety Systems is not perhaps the most auspicious moment to announce our new Top 30 Japanese employers in Germany – where Takata, for the time being, is at #3.  Its substantial presence in Germany (in contrast to the UK, where it has no operations at all) is due to the acquisition of Petri AG in 2000.

Another Japanese company which should perhaps be classified as Chinese (or rather, Taiwanese) is Sharp.  Since Hon Hai/Foxconn’s acquisition, Sharp has radically reorganised itself in Europe.  There is Sharp Devices Europe, headquartered in Munich, with what was Sharp Laboratories and is now renamed a Design Centre in Oxford UK and Sharp Business Systems Europe, headquartered in the UK along with the Information Systems unit, with Visual Solutions in Munich and Energy Solutions in Hamburg.  Sharp Telecommunications in the UK is being closed down.  Sharp’s white goods brand (microwaves etc) is now under license to the Turkish company Vestel but there was a rumour last year that Sharp under Foxconn wanted to buy the brand back.

Many of the other large Japanese companies in Germany are also the result of acquisitions, like Takata – Musashi Seimitsu acquired Johann Hay in 2006, Lixil acquired Grohe/Josef Gartner 2011-2013, Panasonic acquiring Vossloh in 2000 etc.

Comparing to the UK Top 30 – there are some similarities – Fujitsu at the top and Sony, Ricoh, Canon, JTI and Hitachi all featuring.  No doubt the list will be revised as we uncover more companies, but it does seem that there are not quite so many employees per large company in Germany as there are in the UK.  This might be partly to do with the car factories – Honda, Nissan and Toyota and their associated suppliers in the UK – and also the trading companies such as Itochu, Sumitomo Corporation and Mitsubishi Corporation have acquired larger companies in the UK than they have in Germany.

Rank Company Germany employees 2016
1 Fujitsu 5,000
2 Sharp 4,226
3 Takata 3,311
4 Lixil 3,200
5 Musashi Seimitsu 3,140
6 Panasonic 2,935
7 Olympus 2,573
8 NSG Pilkington 2,500
9 Konica Minolta 2,399
10 NTT Data 2,300
11 Canon 1,842
12 Ricoh 1,804
13 Daiichi Sankyo 1,705
14 JT International 1,699
15 Nidec 1,394
16 Sumitomo Heavy Industries 1,386
17 Sony 1,372
18 Mitsubishi Hitachi Power Systems 1,352
19 Toshiba 1,287
20 Yaskawa 1,281
21 Takeda 1,262
22 Astellas 1,037
23 Toyoda Gosei 1,034
24 ARRK 955
25 Nintendo 900
26 Nissan 835
27 Renesas 831
28 Toyota Industries 830
29 Hosokawa Micron 760
30 Hitachi 742
TOTAL 55,892

For a 2022 Top 30 Japanese companies in Germany, see our blog post here.

For more content like this, subscribe to the free Rudlin Consulting Newsletter. 最新の在欧日系企業の状況については無料の月刊Rudlin Consulting ニューズレターにご登録ください。

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“Without competition, people will not develop”

Japanese construction materials and sanitary fittings manufacturer LIXIL is an example of a Japanese company that has deliberately tried to introduce a spirit of competitiveness into the company, following its acquisition of American Standard and Grohe. A German now runs a division, and many Japanese now have foreign bosses. LIXIL’s CEO Yoshiaki Fujimori says in a recent Nikkei Business article “There is no real competition inside Japanese companies. The benchmarks for evaluating employees are vague, and people are assessed on whether they are good relationship builders or come from the same background. At the very least, with a foreigner as a leader, baseless evaluation criteria will no longer be accepted.”

Fujimori is himself unusual in that he started out at Nissho Iwai (now Sojitz) and then became the first Japanese to be an EVP at General Electric, before joining LIXIL in 2011. He underwent a typical egalitarian Japanese education, graduating from Tokyo University in 1975, but even at Nissho Iwai he thought he could beat most people in terms of performance. However when he studied for an MBA he found out what real competition was like. He found it painful that other students could express their opinions so easily when he could not say anything. So he devised a study routine of making himself review the day in 1 minute every day, and then listen to himself, 30 times a day. It was even worse at GE, he claims, where you always have to win every battle. “If you lose once, you lose your job.”  At LIXIL he has tried to quantify job roles in order to set performance evaluation standards and introduced Executive Leadership Training.

Another executive in the same mould as Fujimori is Yoshiaki Itoh. Born in Thailand, and a graduate of Thunderbird Business School, he has worked at Dell, Lenovo, Adidas Japan and Sony Pictures Entertainment, before becoming CEO of Haier Asia.  At Haier he was shocked to find that the Sanyo (their white goods business in Asia was acquired by Haier) ‘super egalitarian’ legacy lived on – there were 14 grade levels, and everyone took an exam every two years in order to be promoted. It was not possible to jump a grade, so to get to a management position would take nearly 20 years, no matter how good you were.

Itoh cut the 14 levels to 5 and made it possible to become a team leader without any reference to age.  He also went round South East Asia, and sent 20 of the 40 Japanese expatriates back to Japan.  He also intends to make the R&D centre stand on its own two feet.  “Japanese companies have not grasped the fact that competitiveness is necessary to win on the global stage” Itoh says.  He is intending to further clear out remaining notions of “competition avoidance” and “everyone the same”.

For more content like this, subscribe to the free Rudlin Consulting Newsletter. 最新の在欧日系企業の状況については無料の月刊Rudlin Consulting ニューズレターにご登録ください。

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Only 17% of Japan’s CEOs have global experience thanks to takotsubo (octopus pot) appointments

Only 17% of CEOs in Japan have worked outside Japan, according to a survey of 2500 listed global companies in 2012 by Booz & Co.  This compares to the overall global average of 45%, and is barely higher than China’s 15%.  25% of Japan’s CEOs have worked in another company (and I bet many of them are related subsidiaries or joint ventures of the Japan parent) whereas 86% of North American and 88% of Western European CEOs have worked elsewhere.

The Nikkei Business magazine quotes this survey, in an article (Japanese, subscription) speculating as to whether a new CEO can really help Japanese companies compete globally.  The positive side to hiring from within, it points out, is that it encourages a competitive but also united spirit within the company, but the negative side is that it leads to a reluctance to make risky decisions such as undertaking M&As or restructuring unprofitable businesses.

Booz & Co also comments that “it will be difficult for a company headed by a senior executive who has not had to make tough decisions about subsidiaries and overseas operations to compete globally”.  There are some signs that Japanese companies are aware of this judging by the appointments being announced for this April – for example Konica Minolta’s next President headed a US acquisition.

This “takotsubo”  (literally “octopus pot” – a way of catching octopus by trapping it in a pot) management selection style means that Japanese companies are also not very adept at bringing in outside management experience.  Shiseido has just hired the former chairman of Coca Cola Japan as its President and LIXIL has hired executives from Misumi and Calbee, but these are rare examples.

Similarly, most instances of hiring foreign executives (Sony, NSG) have not gone well.  Only 1% of CEOs appointed in Japan over 2009-2012 were “foreign” compared to 17% in North America and 30% in Western Europe.  As noted previously, it is not surprising there is much doubt as to whether Takeda’s new President, Christophe Weber, from GSK, will be able to buck the trend.

For more content like this, subscribe to the free Rudlin Consulting Newsletter. 最新の在欧日系企業の状況については無料の月刊Rudlin Consulting ニューズレターにご登録ください。

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Successes and failures of Japanese cross border M&A (Pilkington & Nippon Sheet Glass)

Softbank’s $21bn acquisition of Sprint, the merger of Tokyo Electron and Applied Materials and most recently LIXIL’s 3bn euro acquisition of German bathroom fitting manufacturer Grohe have provoked a two part series in the Nikkei Business magazine on the successes and failures of Japanese cross border M&A, starting with the article of 2nd December, which I read just as I was travelling to Japan to help with a post merger integration project.

Since 2000, domestic M&As have decreased, but cross border M&As have soared for Japanese companies, with a pause after the Lehman Shock in 2009-2011.  Of the 15 M&As noted by the Nikkei from March 2011 to October 2013, 14 were cross border, and the majority were deals of over  $1bn.

The Nikkei comments that although the reason for these acquisitions is clear (the hunt for growth outside the saturated Japanese domestic market), the post merger story has not been that rosy for many of the acquiring companies in the past decade.  The Nikkei focuses on three cases – Nippon Sheet Glass’s acquisition of Pilkington in 2006, Daiichi Sankyo’s acquisition of Ranbaxy in 2008 and Ricoh’s acquisition of US company Ikon Office Solutions in 2008, to see what lessons can be learnt.

Nippon Sheet Glass/Pilkington

NSG were worried that they might be dumped by Toyota, their key customer, if they could not match Toyota’s overseas expansion.  Before the acquisition of Pilkington, 80% of NSG’s sales were in Japan.  Pilkington’s turnover was double that of NSG, so by acquiring it, NSG was finally able to be on equal terms with Asahi (who had previously acquired Saint Gobain).  After the acquisition, the March 2008 results showed that NSG Group sales were 80% overseas, with profits at a record high.  Stuart Chambers and other Pilkington executives took over the key management positions in the group and it seemed as if the company had become global overnight.

However the good times did not last, as the Lehman Shock brought about the world economic crisis, followed by the euro debt crisis, impacting the two main businesses of automotive glass and construction glass.  The NSG management did not take any effective action “and then it hit us” says a Japanese executive at the time “that we knew nothing about Pilkington”.  They thought it would be a growth engine, so did not do anything beyond cut employees and shut down operations.

Too focused on growth and globalization

This is where Japanese M&As often come unstuck says the Nikkei – they are so focused on the growth and globalization, they do not fully develop strategies and pathways for ensuring the M&A actually bears fruit.  “We had to focus on the immediate crisis, rather than the growth of the new company” says Kazumitsu Fujii, an executive officer.

NSG did know Pilkington quite well – having held equity in the company since 2000, and collaborated on various projects together.  Howerver they had not undertaken any simulation of the financial impacts of any worsening market conditions post merger.  As one executive at the time says “we did not even have any thought that the economic situation would get so bad so quickly”.

Stuart Chambers resigned in September 2009, citing family pressures from being in Japan all the time – and it was felt that his heart was not really in the job.

NSG had a 4-3-3 10 year vision.  The first four years were to be about integrating the two companies’ systems and cutting down the debts.  The next three years were to expand sales in automotive and construction glass and the second 3 years were to be about investing in new businesses.

However the company has not managed to move on from the first phase yet.  It seems that the lack of understanding and knowledge between the two companies has meant that the negative financial situation has dragged on.  “We thought that once we had made the leap into being a global company, all kinds of paths would open up to us, but it was not the case” says a former employee.

The new President, Keiji Yoshikawa says “we are having to fix areas we did not see at the time of the acquisition”.  Pilkington had centralised, standardized global HR management and sales systems which looked efficient at first glance, but meant that there were regional differences which were ignored.

For example, construction glass has to take account of the different climates and lifestyles, but apparently such products were not given much priority.  So NSG have started to allocate budgets to projects such as fire resistant glass in Germany.

After 7 years, NSG have finally started to understand Pilkington, concludes Nikkei Business.

Standardization and taking the initiative

My personal thoughts on this, having conducted various cross cultural communications seminars for Pilkington and Nippon Sheet Glass at the time, was that the two companies knew each other pretty well.  The gap was more to do with differing views and levels of experience in managing globally.

Pilkington, like many Anglo Saxon multinationals, would indeed emphasise a standard unified approach to management and product development around the world, in order to ensure maximum profitability.  The Japanese view that products should be customised to suit different markets is not cost effective, in this world view.

The other issue, as is so often the case when Japanese companies acquire Western ones, is that both parties sit back and wait for the other to take the initiative – and this was amplified by the Lehman Shock – where quick and decisive action was needed.  Pilkington may well have expected NSG to take the lead, whereas NSG was expecting Pilkington to have the global experience to provide the guidance for what to do in such extreme circumstances.

For more content like this, subscribe to the free Rudlin Consulting Newsletter. 最新の在欧日系企業の状況については無料の月刊Rudlin Consulting ニューズレターにご登録ください。

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Last updated by Pernille Rudlin at 2022-06-22.

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