Essay written by V. Markunas & Y. Podolskaya

Introduction:

Have you ever wondered how Japanese businesses were able to become massive corporations that are distinguished from the market by having excellent quality products? Matsushita who is famous for being an outstanding entrepreneur and a founder of Panasonic provides valuable insights and his own observations on how to develop a successful business. We decided to choose this book because despite of being international business students we actually lack knowledge about conducting business anywhere else besides the USA and Europe. We thought it would be interesting to compare different perspectives and see if the approach would be different or there are common rules on how to bring a company to a success regardless where in the world it is situated and what culture is concerned. This book seemed like a right choice because how it is possible that a country that is deficient in natural resources has second best efficient economy on the world arena. This is the question that Matsushita is answering in the book.

Discussion:

The author described and explained key aspects that from his own experience are crucial to consider on the way to creating a fortunate company.

1. Personnel

It is impossible to teach employees right and wrong, but it is possible to make them learn from their experience. Trust is a core value in the relationship between a manager and an employee. People are more willing to cooperate when they are asked for advice rather than when they are being told how to behave in a certain situation. Trust can become a leading motive for a person to try harder and achieve success in the end. Matsushita mentions that the “I am better than you” attitude on behalf of the senior manager can cost him the whole career while the sense of true modesty and humility will bring them significant dividends both tangible and intangible. But it doesn’t mean that the personnel should be given a complete freedom of action and be left with no guidance and possible call-downs. Matsushita shares a story how a junior manager of his company made a mistake and Matsushita’s response was: as soon as you get to the very top nobody will question or disagree with your actions, no matter how bizarre they could be; that why you should see me commenting on your choices as an invaluable opportunity.

What can a manager do to help each of his employees grow? A manager should try his best to strive and find positive qualities in the employee leaving a very little room for criticism. Whatever promotion or position a person gets, they usually grow towards it, acquiring abilities in accordance with a new level of responsibility. The manager should devote at least seventy percent of his attention to the positive qualities of his employees, thirty percent will be enough to deal with issues requiring improvements or changes.

Company executives who want to have a significant impact on people need clear and mature views on society, business and life in general. When top managers are consistent in their thoughts and behavior, their employees begin to trust them and follow them. Each company regardless of size should have clear goals that are not related to profit but those that justify its place in the society.

2. Collective wisdom

A manager like any other person on Earth has its own shortcomings, but there are no excuses when it comes to dedication, devotion and involvement into work. No matter how educated and knowledgeable the manager is or what talents they could possess, it is impossible to become a real leader if even the slightest indifference to what they are doing is shown. Only in this case a manager would be considered a role model for his employees. There is an old saying that goes “the tail always follows the head”. If the head moves fast, the tail will follow at the same pace, but if the head is motionless, the tail would be pressed against the ground.

A manager should also have the ability and desire to listen to what his employees say about the management and current activities of the company. If the head of the company does not want to receive comments and observation from the employees, the feedback will quickly discontinue, and an information vacuum will appear.

The most suitable word to describe relation in a Japanese organization is harmony. One way to achieve harmony in the company can be constant flow of communication both top to bottom and in the opposite direction.  If a manager’s ideas and thoughts don’t reach the employees there is no way a company would work efficiently and consistently.  Same applies to the scenario if employees would not be heard by the management team.  Bottom-up communication is even more important as it is a stream of fresh ideas and suggestion. And if this stream would be blocked the company could find itself in a very unfortunate situation. The reason for this is that if a manager is convinced that only their ideas have value then they push themselves into frames and are unable to break out of them and discover a new direction to move. But if they can accumulate the wisdom of all employees and create something new on its basis the company will be able to develop rapidly.

3. Creative management

Everything we do can almost always be done a little better. We must be constantly open to changes, attempt to do something new or completely different. The process of improvement is eternal. The attitude of managers to this issue determines the degree of their responsibility for the development of the company. It is a bad sign if the manager is not interested in the changes.

Companies that continue to use old management techniques put themselves in danger of not having a successful future. Today’s world gives a perfect opportunity for managers to forget about data analysis but encourage them to shape their vision and work on its implementation.

4. Service atmosphere

Matsushita begins with admitting the importance of marketing a new product and its advertising campaigns. The main message communicated to customer should include information on how a product will be able to help them improve their daily lives. As the true purpose of advertising is not to promote sales but to bring valuable knowledge to consumers. Nowadays, in most cases advertising is aimed only at increasing sales. Too often advertising messages distort or embellish product quality. In this case, advertising stops being a valuable source of information and leads to disappointment.

However, after advertising served its purpose of communicating the value of the product to a customer and they decide to buy it, the customer is moved to an after-sales stage. After-sales service is a key element of customer retention. It does not matter how good the product is if the company is unable to provide equally good after-sales service. It will result in the consumers not turning back to the company. After-sales service will be especially effective if a company starts acting before receiving customer complaints about the product or before a breakdown occurs.

Matsushita also explains the importance of negative feedback on customer’s behalf. Complaints from consumers give companies opportunity to establish direct contact with them. Consumers who do not complain may decide never to buy products they don’t like again. Those who complain can do the same, but if the company come to them and show how important it is for them to understand the problem the customers will appreciate the sincerity. Thus, depending on how a company deals with consumer issues it can get both fans and critics. The worst thing a company can do is ignore the complaint. Consumer dissatisfaction is an opportunity that cannot be missed.

5. Social responsibility

As long as the business complies with accepted business standards, it will stand firmly on its feet. No matter what is the field of the business it is important to be sure that the products fully satisfy the customer. There should never be a situation in which a product can leave the company before it is completely satisfied with the product’s quality.

Truthful competition is a key factor to achieve progress.  Fair competition will give even small companies with insignificant capital equal chances of success based on competent management and operational efficiency. If competition rules are dictated by those with financial power skills become less important. Nothing in conditions of economic competition is done for the sake of competition itself. Its main purpose is to encourage industries to develop and implement innovations and also motivate people to increase personal productivity. Just as monopoly leads to stagnation, competition feeds progress. On the other hand, too much competition is unproductive.

Conclusion:

After reading this book we came to a conclusion that rules for creating and leading a successful business are pretty universal. A business starts from an ambitious leader who is dedicated to his desires and ideas. And his devotion to success is not driven by financial profit but by an idea of creating a community that would serve people, both customers and employees. Despite the fact that the book was written almost forty years ago, the author predicted the importance of corporate social responsibly. And in today’s world a company with low ethical standards has almost no chance for acquiring trust and loyalty from the customers, therefore will hardly make any success.