Kanji Tanimoto is Professor in Business and Society at the School of Commerce, Waseda University, Japan. He recently was Visiting Professor at the Free University of Berlin in 2010 and 2014. Prior to joining Waseda, he was a professor at the Graduate School of Commerce, Hitotsubashi University. He received his doctorate in business administration from Graduate School of Business Administration, Kobe University. He is Founder and President of an academy: Japan Forum of Business and Society, which is the first academic society in this field in Japan. He serves on the program committee of the International Conference on Corporate Social Responsibility at Humboldt University. He has been consulting and providing advices to leading Japanese companies on CSR management over the last 20 years. He also has engaged some Japanese Government committees on business & society and social business. His research interests are the relationship between business and society, corporate social responsibility, social business and social innovation. He has published numerous books and papers on these topics
Q: Through the Japan Forum of Business and Society (JFBS), you have championed the development of Japanese entrepreneurship. Traditionally, that is not mainly how the Japanese innovate and do business? Why is it important to change this in a country that has proven many times over its ability to innovate?
The rate of new business creation in Japan is relatively low. The country is ranked among the lowest in OECD countries for entrepreneurship. Most students when they graduate wish to enter a large corporation. There have been successful Japanese entrepreneurs of course, but mostly, younger generations are too risk averse to take the step.
Large corporations such as Sony, Sharp, etc. have in recent years, lost their competitive edge in terms of innovation. Some of the major reasons for that is the disease of large organisations: hierarchy and their past successful experiences. To organise efficiently such large institutions often implies creating siloes and predefined processes to generate innovation. Unfortunately, by always using the same methods you use up your ability to innovate.
Today, closed innovation is no longer sufficient, the way to innovate is through open innovation. For most Japanese people and organisations, it is difficult to look further than the limits of the company. However, today new ideas come particularly from the recombination of different disciplines, services, perspectives, which is achieved through the interactions of relevant stakeholders in the company’s process. Culturally, the U.S. and Europe, in particular Scandinavia, have an advantage in this.
To answer your question. I do not only champion entrepreneurship. Some innovations are still very capital intensive (electric cars, self-driving cars, and a new medicine for example) and there, large corporations have a role to play. However, many innovations today don’t have to do with capital investments. If I use self-driving cars as an example again. Yes, the cars themselves require large investments to develop but the whole transportation system is being transformed by companies like Über. This is very fertile terrain for entrepreneurship. If Japan wishes to maintain its innovative ability, it needs to broaden its horizons and entrepreneurship is one way of doing that.
Today, national boundaries and maintaining a process within a given culture to optimise its efficiency is not as important as in the past. It is actually often counter-productive. But mostly Japanese people don’t even speak English. At JFBS, we organise an annual international conference for industrials and academics. Unfortunately, most often Japanese industrials decline the invitation to either be in the audience or be a speaker, especially if it is as part of a panel with other nationalities. The language barrier is still very present. Even students at university, many of them don’t want to study abroad. The number of international exchanges for Japanese students has actually been decreasing in recent years.
I was a visiting scholar in Auckland recently and I saw many Chinese and Korean but few Japanese exchange students in the classes. The reason for this is because large Japanese corporations don’t necessarily care about international exposure of their recruits. They want people that will culturally fit within the company.
Did you know that we rarely have written employment contracts contract in japan? You are sitting in my office at Waseda University and I teach classes here but I have no written contract with the university, no job description. People define their job within a small group of their colleagues, taking care to avoid conflicts. They don’t talk explicitly about objectives and responsibilities. They infer a lot and imagine what their colleagues would think if they did something within the team. To work in this vague, highly implicit and lose structure, you need a strong cultural cohesiveness, which is why Japanese companies only hire classical Japanese students and international exposure is actually sometimes seen as a drawback.
All this does not help with broadening the horizons of Japanese business.
Q: You have worked a lot on Corporate Social Responsibility (CSR). What specificities do you see of Japanese CSR?
When you look at the statistics, Japan is the leading country in the number of CSR reports and teams. However, until very recently this was mostly cosmetic because it was just another siloed process and not a part of the corporate culture. For instance, during the 1990s, Hitachi was one of the first companies to improve its environmental management. However, it was criticised by NGOs on human rights violations in its suppliers’ factories. This was not addressed by Hitachi for years because it wasn’t seen by its management as part of their responsibilities.
This was an issue for years in Japanese corporations because of the transversal nature of CSR and the siloed hierarchical structures of companies. For the last 15 years though, companies have been reflecting on the meaning and reasons for having a CSR teams and they are now gradually integrating those practices as part of the organisational culture. For this, you need strong leadership to take a stand or nothing changes.
For example, culturally diversity management isn’t very strong in Japan. Young parents, not only woman but men usually have access to parental leave. However, as I mentioned earlier, the implicit nature of work means that the young Japanese parent will wonder how leaving of paternal leave will affect their co-workers. They then (maybe rightfully) imagine that it will increase their colleagues’ workloads and they will resent them. So, they don’t take parental leave even if their company allowed for it in the first place.
CSR practices and mindset integration is a real challenge for Japanese corporations.
Q: In an interview you gave earlier this year in JapanToday, you are quoted saying “ [Japan] lacks the Western culture of criticism – the Japanese prefer to solve issues in a positive and peaceful way”. I would see that as a good thing, but it requires a positive narrative I would imagine to foster change? That for me is one of the issues for the Western world and maybe a reason for the recent rise in populism. Is there a positive narrative for change in Japan?
Yes, you need a positive narrative. People in Japan are overly cautious so it is difficult to change. It is a no-conflict culture.
Populism is a negative signal globally. Its patriotic in part but leads the country to close in onto itself and that is no longer a possibility today. Japan can’t close up because we do not have the national resources to do so, energy self-sufficiency rate is only 5%. We are too dependent on the outside to close up.
Having said this, Japan traditionally does not welcome migrants. Even after the Vietnam war. So, our problem is different, we are facing the challenges of an insufficiently large workforce. But still, Japan is still very restrictive of immigration and opening only to specific high skilled foreigners.
Q: This leads me to the question of automation. Japan’s answer is quite different from what other countries are doing. The country is welcoming automation to compensate for the lack of human workforce. What are your thoughts on this? Is it not just short term thinking, because automation will probably not stop at the exact level of human labour compensation?
One problem at a time. As of now, because of our lack of labour force we need automation.
I will give you an example of a difficult and tiring job today, that Japan will automatize quickly: convenience store retail workers. In Japan, convenience stores are particularly… well convenient. They are open 24/7 and 365 days a year. You can go there to pay your gas bill, buy tech products, they have ATMs that accept all cards, Amazon drops off your packages there, you can buy event tickets, print airplane tickets, etc. It is very tiring for the staff there. Those jobs will be replaced and it is a good thing.
However, there are some points we need to be cautious about during this new wave of automation. The first is to make sure that we do not lose detailed high level techniques in craft through robotics. The way these skills are transferred today is through apprenticeship and lots of implicit aspects are lost when transferring to machines. Twenty years ago, many factories were moved to China. Technological and skill transfer was badly handled then. There was an important loss of quality and that was mostly with human to human interaction.
The second aspect is that artificial intelligence has some ways to go and we should be aware of that. Computers win at chess today because they have huge computing power and an exhaustive memory of past games by chess Masters. However, they do not create new ideas. Machines are not creative yet.
Q: To come to CSR for a minute, you have argued that it is insufficient to tackle environmental issues because company do “what they can” or “what they want” in regards to popular appeal of the initiatives. What would you recommend to truly tackle environment and social problems?
There are two parts to my answer.
The first is to change management itself, to change corporate culture. This point I already mentioned but the lack of management responsibility with regards to Human Rights particularly abroad and throughout the entire supply chain of the company needs to change. Management needs to integrate these practices and values in their work. As I said, it has been changing, but slowly.
The second aspect is to do with sustainable development issues: climate change, poverty, resource management, gender equality, the UN’s Sustainable Development Goals (SDGs) in short. Companies need to tackle these issues as part of their core business because it is a growing business. Companies need to simplify complex First World product to make them affordable for poorer people. Take shampoo for instance. In developed nations, you buy a one litre bottle of cleaning, nice smelling, shampoo + conditioner, etc. Companies can simplify the formula to just be a cleaning agent and sell the shampoo in smaller quantities and address markets that can’t afford the existing version. Furthermore, the limits of global resources gradually make all aspects of the SDGs into valuable markets.
However, it is important to also keep in mind that no single sector or industry can tackle these issues by itself. There is a need of collaborations between industries but also with civil society, consumers, NGOs, governments, international organizationsetc. Global governance has also changed. No single country can tackle Climate Change beyond its borders but it is an issue grander than any nation state. Consumers have a role to play as well. Corporations need a market to function so they can’t be the only one providing positive services, they need people to buy them. It is the entire ecosystem of business that needs to change.
To do this, we need education to explain the challenges to people so they can make informed decisions. Most Japanese people don’t know that there is an embargo on the Democratic Republic of Congo on its rare metals which are present in most of our electronics and enjoy the products without a care in the world. We need more tracing of materials and a better understanding of every step of the processes along the way to improve social issues like slavery for example, which sadly still exist and not only in developing nations.
Q: My last question is if you believe there is a transition happening Globally? In Japan? If so, how do you define it?
That is an impossible question to answer succinctly. What I will say is that one aspect of transition today concerns identity.
It is very hard to understand what aspects make up an identity and how people achieve it. It has simultaneously everything and nothing to do with religion, culture, land, boarders, history, etc. The important thing is that a whole group of people say “We are Indonesian” for example. They fell it so they have chosen to identify themselves as such. The transition happening today is that the way people define themselves has less to do with nationality of a Nation State and more to do with a commonly shared set of values which often transcend borders
The difficulty for the Japanese – for the reasons I explained previously – is that they lack international and external experiences enabling this more open and global identity definition process to occur. This prevents them from tackling issues in a global way, which is very important today, and is in itself a hurdle for them to change this. International exposure gives you perspective on your own culture and helps you to make it evolve. The Japanese lack global perspective which prevents them understanding the differences and similarities with foreign peoples and manage to go on with them. It will be a difficult challenge to tackle but a necessary one for Japan to stay relevant in the world.