Tag: panasonic

The latest in Nidec President Nagamori’s string of acquisitions – a university

Shigenobu Nagamori, the founder of Nidec is interviewed in the Nikkei Business series on how to “wake up Japan” about his latest acquisition – not a company this time, but a university – Kyoto Gakuen. He feels that Japan has become too brand name obsessed about higher education and that 18 year olds should not have their future decided simply on the basis of their standardised score for the university entry exams.

“You get into university in Japan on rote memorization and exam technique, so when you graduate, you have a rather fake identity, with no real strength, so don’t know how to survive in society.” Nagamori is aiming for a university where “you graduate with fluent English [science graduates do not have to study English at university in Japan] and specialist skills that you can put to immediate use”.  He has changed Kyoto Gakuen’s name to the Kyoto University of Advanced Science.

“Japanese university students aren’t fully formed human beings. They don’t know how to speak for themselves.  They fall asleep in lectures or mess about on their smartphones. This has to change, starting with the teachers.  That’s why I became the chairman of the university. Lectures will be in English.  1/3 of the teachers will be foreign. There will be some students who cannot cope with this, so we will have the same lectures in the evening in Japanese.  We had 600 lecturers apply for 30 positions. The evening supplementary lectures wll be given by post doc students or research students. The lectures will not be 90 minutes of sitting down.  There will be a 45 minute lecture and the rest will be doing experiments. ”

“The administrators become the elite in Japanese companies – hardly any technical specialists become CEO. This is completely different to the USA. We also need to encourage overseas study – and encourage overseas students to come to us – maybe half our students should be from overseas. If they achieve good results, we will fund their fees and living costs. If results fall off, they pay half, if they hit the bottom, they have to pay all of it. That’s what we’re thinking. This might seem extreme, but it’s normal in the USA.”

Most of the rest of the interview is about facing the threat from China.  Nagamori finishes by comparing himself to Konosuke Matsushita, the founder of Panasonic. Matsushita developed his management philosophy, and set up the Matsushita Institute of Government and Management , “but I don’t have any interest in politics, so I want to develop people who can set up businesses in advanced science – kids from poor Asian families who can come here to study, and then go out into the world and start something new.”

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Japan’s lost three decades – what are the causes?

The 1990s were called the Lost Decade in Japan, and then as the economy seemed to stagnate in the 2000s, it became the Lost Two Decades.  Now the Nikkei Business in a recent special series seems to be saying it has been a lost three decades.  Turnover and profitability were growing through to around 1990 when the economic bubble burst.  Then profits fell – although since 2010 they have been growing  again.  The total revenues of Japanese companies (excluding financial services) has been static, with only a small bump upwards around 2005-2008.

Nikkei Business says the lack of growth in turnover is the key problem. Even sales overseas, which were meant to be the growth driver, have not shown much of an upward trend.  According to Nikkei Business the root causes of this lack of growth are:

  1. low investment (1991 capital investment as a percentage of cashflow was 133%, compared to 82.2% in 2018)
  2. low wages (106.5 in 1990 indexed against 100 in 2015, down to 99.6 in 2019)
  3. low efficiency (return on assets was 4.3% in 1990, down to 3.8% in 2018)

It cites Panasonic as an example of #1. Every time profits rose, Panasonic increased its investment, but every time profits shrank, it cut investment back, since 2001.  As for #2, Nikkei Business lists all the major restructurings since 1999 with major Japanese companies, which makes for sobering reading for a country famed for lifetime employment:

  • 1999 – Nissan plan to cut 21,000 from its workforce, closing 5 factories
  • 2008 – Sony announced it would reduced its electronics workforce by 16,000
  • 2009 – Panasonic announced it would cut 15,000 people and 27 factories. Pioneer axed 10,000 jobs.
  • 2010 – All Nippon Airways proposed reducing its workforce by 16,000 as part of its revival plan
  • 2011 – Ricoh announced a mid term plan aiming at reducing its workforce by 10,000
  • 2012 – NEC announced a workforce reduction programme of 10,000 job cuts
  • 2013 – Fujitsu announced it that by axing its semi-conductor business, it would remove 5,000 jobs.
  • 2015 – Toshiba announce it would erduce its workforce by 15,0000
  • 2017 – Mizuho Financial Group announced an administrative work reduction programme targetting 19,000 roles.
  • 2019 – Nissan restructuring to impact 12,500 personnel

The low efficiency seems to be in the service sector, where there has been a lack of economies of scale.  The number of Japanese companies with turnover of over  Y100bn/$1bn doubled from around 40 to 80 from 1980 to 1991, but has not risen much since – apart from a blip in 2008 – after the birth of Japan Post, and is still heavily manufacturing oriented.

I will cover the analysis and suggestions from the rest of series for how Japan can “wake up” in my next blog posts.

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The fourth industrial revolution should not be mercantilized

UK is the birthplace of innovation and will not sink, despite Brexit, says Toru Sugawara, the deputy editor of the Nikkei Business magazine – Japan’s equivalent of The Economist (only with more business, less economy).

He acknowledges that Brexit is casting a shadow on the world economy, and that the problems will not end just with an extension, as the negotiations will drag on, unless the result of the referendum is reversed.

He points to how employment remains buoyant in the UK, despite GDP growth being the lowest in 6 years, and says that this could be because immigration from the EU is decreasing – which was one of the reasons people voted to leave. He does not mention that net immigration has not dropped, as more people are coming from non-EU countries.  So unless you believe that EU immigrants only have jobs which UK natives could do, and non-EU immigrants only do jobs that UK natives couldn’t do…

He believes the UK’s resilience derives from an inner strength which helped it to lead the industrial revolution as the “birthplace of innovation.” Because the UK has worldclass universities  “UK research levels are extremely high. Even if they leave the EU, there are researchers who want to learn from the UK” – according to  an engineer from a major Japanese electronics company.

The UK is similar to Japan, Sugawara notes, in that neither was able to match Silicon Valley in terms of being able to turn innovations into world changing businesses.  He thinks the UK is changing, however, dating from when the British Business Bank launched in 2014, bringing together various funds for startups and small businesses and also the introduction of the regulatory sandbox, to allow new kinds of financial services to test their products.

Venture capital funding in the UK in 2018 was $7.9bn, double that of Germany or France (although what he doesn’t say is that this was down from a high of $8.1bn the previous year, and that Germany and France seem to be catching up) . Dr Yuri Okina of the Japan Research Institute points out that the UK’s strength is that as well as having the world’s financial centre, there is a rich source of accountants, lawyers, consultants and other specialists who support an ecosystem for new business.

If this network could be boosted further, then the UK could lead the 4th wave of the industrial revolution, asserts Sugawara. He warns that Japan, who puts its funds into propping up zombie companies, with regulatory systems that impede new industries from growing, will get left behind. “That’s the bigger worry” he concludes.

So he seems to be turning an encouraging pat on the back for the UK into a kick up the backside for Japan.  What he says is not going to be news to many Japanese companies, who have reacted to the difficulties they face in Japan by investing in the UK (and elsewhere in Europe). Sugawara mentions SoftBank‘s acquisition of the UK’s ARM, but there have been plenty of other less spectacular investments. Much of it has to do with CASE (Connected, Autonomous, Shared, Electric) in the automotive industry –  Sony Innovation has invested in What3Words (a geocoding system) – also invested in by Daimler. Itochu has invested in Hiyacar and I realise now that its acquisition of UK car repair chain KwikFit probably also fits into this automotive services play. Similarly Sumitomo Corporation has invested in the Nordic parking company Q-Park and Sweden’s car sharing service Aimo.  Japan’s Park24 acquiring National Car Parks in the UK is probably also looking to a CASE future. Panasonic acquired Spanish automotive systems and parts company Ficosa in 2017.

So really, it’s not about any one country leading the fourth industrial revolution – it will be collaborative and global by its very nature. Both Japan and the UK need to keep their doors as wide open as possible to let everyone get on the ride.

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Acquire or be acquired – predictions on the future of Japanese mergers and acquisitions

Japanese companies used to be seen as very reluctant to acquire and merge with other companies, but the record breaking £46bn acquisition, finalised in January 2019, of Irish pharmaceuticals company Shire by Japan’s Takeda may not even be the peak of what has been at least 10 years’ of an overseas spending spree by Japanese companies.  Faced with a declining, ageing domestic market, Nikkei Business magazine expects Japanese companies to continue their spending spree in 2019, even if there is not a big ticket purchase like Takeda/Shire.

Autonomous vehicles, Internet of Things and other new technologies are likely to be the focus of future M&A.  For example Japan’s tyre maker Bridgestone has acquired the telematics business of Dutch company TomTom. “Tyre companies are also entering the era of CASE (Connected, Autonomous, Sharing Electric)” says Bridgestone’s CEO Masaaki Tsuya. Sensors can be placed in tyres to understand driving conditions, for example.

In the IT sector, NEC has acquired the UK company Northgate Public Services in January 2019 and in December of the previous year acquired Denmark’s KMD Holding and is looking to acquire a stake in India’s Mindtree.

Food and drink companies are also active – Mizkan, Ajinomoto and Asahi Beer have all made acquisitions recently in Europe.

In the financial sector, Nikkei Business speculates that a Japanese company like SMFG or Orix might be interested in acquiring GE’s aircraft leasing business GECAS, headquartered in Ireland – although GE has since denied GECAS is for sale.  MUFG might be interested in the US Bank of the West.

Most of the acquisitions of Japanese companies have been by Chinese companies, but Nikkei Business also wonders whether some of the big Western automotive suppliers such as Bosch, Continental, ZF, or Magna might not be interested in acquiring Japanese automotive suppliers.

Declutter and dispose

M&A is also an opportunity for Japan’s keiretsus (conglomerates and company groupings) to do a bit of tidying up. The trendsetter in this has been Hitachi, who have been pursuing a rigorous policy of “selection and focus” in rearranging their business portfolio. Over the past 10 years or so they have sold off Hitachi Global Storage Technologies to Western Digital, Hitachi Logistics to SG Holdings, sold a 27% share in Hitachi Capital to MUFG, sold Hitachi Power Tools and Hitachi Kokusai Electric to KKR and Clarion to Faurecia.

Japanese investors and banks are keeping a watch on Hitachi High Technologies, Hitachi Chemical, Hitachi Automotive Systems, Hitachi Construction Machinery and Hitachi Metals as the next possible candidates.  Hitachi Chemical and Hitachi Metals were supposed to be two of the “Three Branches” of Hitachi along with Hitachi Cable, so the idea that they could be sold off would be heresy to some Hitachi old timers.  As the Nikkei Business magazine says, Hitachi is trying to compete as a global company, so any business that has no synergy with its “social innovation” vision is likely to be dropped.

Panasonic already sold off its security camera business and foreign funds are eyeing up Panasonic Avionics – an inflight entertainment company – as a likely next candidate. “It has nothing to do with Panasonic’s main business”, one investor commented.

Takeda seems to be preparing to dispose of its consumer healthcare business to help fund its acquisition of Shire, as it has spun off its vitamin drinks and other products into a separate company.

Fujitsu has also been disposing of its hardware businesses – mobile phones, car electronics and PCs and Sony‘s mobile phone business is still struggling, and rumours that it could be sold continue.

Spark surprise

Nikkei Business concludes with some surprise predictions from the experts it spoke to:

  • Astellas and Daiichi Sankyo merging
  • Pioneer and JVCKenwood merging
  • SoftBank acquiring NEC
  • Fast Retailing acquiring Gap
  • Google acquiring Recruit
  • Amazon acquiring 7&i (7-11 convenience store chain)

Unsettling though it may be for the employees concerned, if clarity in the focus and business of Japan’s iconic companies results from these M&As, ultimately it should make for a more confident Japan Inc.

 

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Lessons from the decline of Japanese electronics manufacturing in the UK for the automotive industry

Although around 10,000 manufacturing jobs in Japanese electronics companies in  the UK were lost in the 1990s-2000s, about the same number have been added, either created by Hitachi Rail or in the automotive or air conditioning sectors. Japanese electronics companies such as Sony, Fujitsu, Panasonic, NEC, Mitsubishi Electric and Hitachi still all employ thousands of people in the UK.

It is a story of how industrial policy cannot ultimately stop product obsolescence, shifts of manufacturing to cheaper locations or the transformation from mass manufacturing of products to supply chain ecosystems providing solutions and services. Recent investment from Japan in the UK is in services and infrastructure, for the domestic UK market, and at least for now, the EU. But this has meant fewer jobs in the areas that voted Brexit.

Bunging £10s of millions at Nissan to compensate for tariffs was not going to stop these shifts. Over 10% of the 7,000 Nissan employ in the UK are working in design centres, not on the factory floor. Being a gateway to the EU now, even in manufacturing, needs regulatory alignment and free movement of people so suppliers can visit and base themselves at client sites and provide services and ship prototypes around the region.

The shift to electric vehicles means the car companies have to cooperate more than ever with ICT and electronics companies. Many of these ICT and electronics companies have joint European HQs spread across the UK, Netherlands or Germany, with senior management and teams scattered across the region, working virtually or at customer and partner sites. They have also integrated back office and technical support into cheaper locations such as Portugal or Poland.

Some examples of the history of Japanese electronics companies in the UK over the past 30 years:

Fujitsu

Fujitsu is the biggest Japanese employer in the UK with over 8,000 employees, 2,000 down on a few years ago, as it grows delivery and support centres in Portugal, South Africa and India and downsizes in the UK. It acquired 80% of UK’s ICL in 1990 (increasing to 100% 1998). ICL had 2,000 UK employees, 26,000 worldwide, with mainframe and PC factories in Letchworth, Manchester and the Midlands.  ICL was born out of 1960s industrial policy – the British government had a 10% stake in it for a while. To this day, Fujitsu provides a lot of  government IT infrastructure and services. Its last computer factory in Europe, in Augsburg in Germany, will shut down in 2019, retaining manufacturing in Japan only.

Hitachi

Hitachi used to employ around 1,000 people in its factory in Aberdare, Wales, making cathode ray TVs, video recorders and microwave ovens. It was shut in 2001, blaming low price competition from Asia. Hitachi has since shifted away from consumer products to infrastructure. In the UK it acquired the now stalled Horizon Nuclear Power projects in Wylfa and Oldbury and set up Hitachi Rail in the UK as the global headquarters with a new factory in Newton Aycliffe, employing nearly 2,000 people.

Hitachi employs another 4,000 people in the UK services sector – for example credit and loans company Hitachi Capital, IT consultants Hitachi Vantara and Hitachi Consulting and Vantec, providing logistics for Nissan.

Sony

Sony came to the UK in 1973, and had 2 plants in Pencoed making cathode ray TVs, employing 1,800 by the 1990s. As these started to shut down, Pencoed transformed itself into an innovation centre, developing and producing broadcast and professional equipment, employing 500-600 people.

Sony has been restructuring across Europe recently, consolidating back office functions into cheaper regions. It was still manufacturing DVDs in Enfield in the UK but this was shifted to Austria in 2017/8, reducing capital in UK by over £250m. It still employs nearly 2,000 in its music, home entertainment and interactive businesses in the UK.

Ricoh

Ricoh still has a factory in Telford (and two other plants in UK), employing the same number of people in 2018 as in 1991 – around 700 – but the product range has shifted from faxes to printers and consumables.

Mitsubishi Electric

Mitsubishi Electric acquired Apricot Computers in 1990, with a plant in Glenrothes and R&D in Birmingham, employing 442 in 1991. Glenrothes was shut in 1999, blaming cheap competition in Asia. It still has manufacturing in the UK, employing nearly 1,000 people (many of whom are non-UK EU citizens) in Livingston, at its airconditioning plant.

Panasonic

Panasonic, formerly known as Matsushita, had many plants in UK from 1970s to 1990s, employing 1,621 in Cardiff (TVs, microwaves), 469 in Gwent (electric typewriters, carphones), 160 in Port Talbot (components for TVs, video recorders, microwaves) and 63 in Reading (fax machines).  Most Matsushita/Panasonic plants in UK shut down in early 2000s, with production shifting to Eastern Europe. 1 plant remains in Wales, employing 400 people, manufacturing microwave ovens but also conducting R&D into fuel cell technology.  Panasonic has acquired Belgian IT company Zetes and Spanish automotive supplier Ficosa recently.

NEC

NEC is also shifting into IT services via European acquisitions. It used to have a semiconductor plant in Livingston (Silicon Glen, remember that?) which employed 1200 by 2001, when it shut down. NEC UK employees now number over 1000 again thanks to the acquisition of Northgate Public Services, in 2018.

Others

Oki Electric were relatively late in shutting down their Cumbernauld printer plant in 2018 – and now all production is in Asia.  JVCKenwood shut down their East Kilbride TV/CD player factory in 2008 and shifted production to Poland. Pioneer closed its CD player/TV factory in Wakefield in 2009. Toshiba had a factory in Plymouth, which used to make TVs, video recorders, but is now owned by a US company and makes air conditioners. Sharp (now owned by a Taiwanese company) still has a factory in Wrexham as does Brother.

 

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Japanese companies no longer growing their own

The wheels have been coming off Japan’s post-war HR system for some years now – whereby seishain or “proper” employees in Japan have been hired straight out of university, onto generalist, lifetime employment tracks, heavily weighted towards seniority-based promotion.  It stabilised the workforce in the immediate post war period when there were labour shortages, and worked well throughout the boom years, when there were places for everyone to go in an ever-expanding organisation.

Since the economic bubble burst, Japanese companies cut back on graduate hires and used contract staff to fill the gaps, but these contract workers had lower status, without job security and benefits, and there have been accusations that overreliance on less motivated contract workers to do quality checks, under pressure, has caused some of the recent scandals. Japan’s labour market is still relatively less mobile than in Sweden, Switzerland or the USA, according to Hays.

So maybe it’s time for “outsiders” to have a higher status.  This idea was floated by Nagisa Inoue in the Nikkei Asian Review, and now its sister magazine, Nikkei Business has a special feature “Your sell by date as an employee – the increasing pile up of employees who only have ‘age’”.

It looks at Panasonic, who have hired around 500 a year into management positions – over 40% of whom are over 35 years old. Panasonic’s founder, Matsushita Konosuke, said employees were family – and up until recently, managers were meant to select their successors from their juniors and develop them.  Now they have been allowed the option of saying they do not see any suitable successors, and can ask to look for outside hires.  The salary system is also being adjusted so that higher salaries than the norm for a position can be offered to those outsiders with specialist skills.

“I did think the next promotion was going to be me – I even tried to improve my TOEIC score so I could work globally, and made efforts to widen my job”, said a 40 something Panasonic employee – but his new boss was hired from outside.

Denso, the Toyota group automotive manufacturer set up a new division to develop components for the “connected car” and around 2/3 of its employees were hired from outside the company.  The division is also deliberately placed in Yokohama, away from the headquarters in Aichi prefecture and from the Tokyo branch office.  “We wanted to cut ourselves off from Denso culture” says one manager.

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Japanese top executive pay still low, unless you’re foreign – or selling wigs or pachinko machines

Pachinko machines

I often illustrate that Japanese companies are the “last functioning socialist organisations” in my seminars by pointing out that although they are very hierarchical, the top executives of Japanese companies only earn 10 or 20 times the average employee’s salary, compared to 160 times in the UK for FTSE 100 companies and more than 300 times in the USA for Fortune 100 companies.

Toyo Keizai have confirmed that this multiple still holds, by listing the highest pay differentials for TSE listed companies.  The top 10 include new technology companies such as LINE (mobile apps subsidiary of Korean internet company Naver) at #1 with a multiple of 165 between staff and director salaries and Nexon (Korean owned video games company) at #2 with a multiple of 57.7 as well as founder run companies such as Fast Retailing (Uniqlo) at #3, with a multiple of 31.4.

Foreign executives head up Nissan at #4 and Takeda at #5 – both with multiples of just over 29. The rest of the top 10 are around the 20-25 x mark with Sankyo and Universal Entertainment – both pachinko gambling machine companies at #6 and #8 and Art Nature ( a wig manufacturer) at #7. Electronics company Tokyo Electron and chain restaurant company Skylark (Chairman Ralph Alvarez ex President McDonalds) at #9 and #10.

Toyota is at #14 and after #15, multiples are below 20 and cluster around the 10x mark for established companies that are in our European Top 30 such as Sony, Daikin, Panasonic, Itochu, Astellas – through to Canon bunched with 8 others at the bottom of the Top 500 with a multiple of around 6 between employees and directors.

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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) for details of corporate subscriptions and customised reports.

 

Rank Company Total EMEA employees y/e 2015 Total EMEA employees y/e 2016 % change
1 Sumitomo Electric Industries 56477 56273 -0.36%
2 Yazaki 45200 47600 5.31%
3 Fujitsu 29467 28707 -2.58%
4 Canon 22356 24826 11.05%
5 Hitachi 11759 19984 69.95%
6 Ricoh 18525 18643 0.64%
7 NTT Data 15000 18000 20.00%
8 Toyota 19118 17445 -8.75%
9 Asahi Glass 14563 16153 10.92%
10 Nissan 16535 16149 -2.33%
11 Toyota Tsusho* 15500 15750 1.61%
12 Denso 14489 15646 7.99%
13 JT Group 12150 15516 27.70%
14 Dentsu* 11000 15000 36.36%
15 Bridgestone (only for Europe) 12255 12932 5.52%
16 Takata 12518 13400 7.05%
17 Sony 13170 12530 -4.86%
18 NSG 12043 12358 2.62%
19 Nidec 3994 4545 13.80%
20 Konica Minolta 9048 9824 8.58%
21 Panasonic 10163 9981 -1.79%
22 Toshiba 11060 9923 -10.28%
23 Lixil 2298 8743 280.46%
24 Honda 8597 8111 -5.65%
25 JTEKT 7262 7292 0.41%
26 Itochu* 7200 7200 0.00%
27 Daikin 6774 7175 5.92%
28 Kyocera Group 7159 7338 2.50%
29 Fast Retailing 5240 6450 23.09%
30 Olympus* 6400 6400 0.00%
TOTAL 437,320 469,894 7.45%

 

*Best estimate as figures not disclosed in annual report

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Japan’s megabanks most popular with Japanese graduates, electronics companies making a comeback

Japanese companies’ investment in their brand marketing, particularly their websites, may have more to do with attracting graduates from Japanese universities than attracting new customers in my experience.  Given that lifetime employment is still crucial to the big traditional companies (and still something many graduates aspire to), this is not surprising.

So Toyo Keizai’s survey of how the current graduate job seekers in Japan rate potential employers at the beginning and end of the recruitment process is a good indicator of the health of the brand and how well it was communicated to the job seekers.  This year the megabanks such as Mizuho (#1) and MUFG (#3)  are still in the Top 3 most highly rated employers even after the recruitment process, along with travel sector companies like ANA, JAL and JTB.  Other financial services companies like Nomura, Daiwa and Sompo are also in the top 10 with the other megabank, SMBC at #11.  This is much in line with the previous years’ graduates’ rankings.

Toyo Keizai notes that food and beverage companies seem to be increasing in popularity – Morinaga, Kagome and Kikkoman have all become more popular during the process and compared to last year.  Other major companies whose ratings improved dramatically over the recruitment process (so people got to like them once they met them) and are also more highly rated this year than by the previous year’s graduates include Panasonic (up to #39 from #156 last year at the beginning of the process), Mitsubishi Electric (#41 from #154) and Toyota (#35 from #57) and Fujitsu (#47 from #210).

Trading companies such as Mitsubishi Corp, Mitsui, Sumitomo Corp and Itochu whilst still in the top 50, seem to have lost popularity compared to last year.

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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

 

 

 

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