Panasonic Matsushita KonosukeAnd the Will to Overcome Any Obstacle Zhenzhong Dong, Jessica McLain, Alfonso Sintjago, Ji-Yun Kang, Huiwen Yang,
Type Public ElectronicsIndustry Semiconductors Home appliancesFounded March 13, 1918 (Osaka,Japan)Founder Konosuke MatsushitaRevenue ¥7.846 trillion (2012)Profit ¥773 billion (2012)Employees 330,767 (March 31, 2012)Subsidiaries Sanyo
Konosukes PhilosophyIn a single imperative: " Be a Humble Merchant." Explanation: 1. Close to the customers 2. Encourage employees to change 3. Late 1960s, companys psyche: A.keep your head down B.focus on the business basics C.waste no time on foolish publicity D.be modest 4. national shops ( now Panasonic)
Konosukes AgeRegional balance in Japan: Consider highly about the regional difference in Japan Global Thrust:Each affiliate companies had its own global agenda. The Glory Years,1950- 1984: Product explode
Konosukes Age ContinuedPanasonic Information and Communications Systems Center (1992) The Hard Years, 1985-1999 Humble philosophy did not adapt to this age. The End of the Twentieth Century: Reorganization of the company is inevitable.
Reforming Brand: Panasonic Idea for Life Major Problems:Individual marketing team withno coordinationLimited marketing budgetsMultiple product linesMultiple brandlinesMultiple expression of the brand A Declarative Statement: A lifelong commitment to customers.
Matsushita Konosuke "The God of Management" November 27, 1894 – April 27, 1989
MKs Life and Family The family’s economic fortunes collapsed in 1899 His academic performance was only average... KM admitted he was not a good student He worked 80 to 90 hours a week and lived with the Godais in Senba for six years in a bicycle store. By 1913 the ten person family was down to three: KM and two sisters In 1915 Konosuke at age 20 married Mumeno at age 19 KM at age ten with Mrs. Godai,the bicycle shop owner’s wife (1905)
MKs Practical Education "When he began working for himself in 1917, he had 100 yen, less than four years of formal education, no connections to important people, and a history of family trauma" (Kindle, Loc 206) "Most of those in Matsushita’s position would have finished their apprenticeship, hoping to eventually become a master themselves. KM chose a different course." (Kindle, Loc 671) "Yet within six months, he left the company. Matsushita has offered a number of different explanations as to why he severed relations with his Outside view of a reproduction of the house employer of seven years. To some degree, the problem was the newthat served as both factory and home during job. The position was unfulfilling" the early years of Matsushita Electric (Kindle, Loc 806)
Building Panasonic"None of the five had the equivalent of a high schooleducation. None had any experience with a start-upcompany. None was wealthy or had connections tosources of finance. More basically, not one of them knewhow to manufacture an electrical socket." (Kindle, Loc858)"In early December, the wholesaler came to Matsushitaand suggested that he set aside the electric plug projectand make one thousand insulator plates. KM agreed todo so without hesitation." (Kindle, Loc 907) Matsushita Electric’s first product, an attachment plug (1918)
Early Years "At each shop, the sales reps left a few samples, put one lit lamp on display, and asked for no money. They told retailers that MEI would accept payment only if the products were sold and the stores were convinced that their customers were satisfied" (Kindle, Loc 1140) MEI went against the grain in all of these areas, especially in advertising. In The Matsushita Phenomenon, Rowland Gould put it this way: “Matsushita promoted the brand name ‘National’ into a household word throughThe bullet-shaped bicycle lamp (1923) splashy advertising (Kindle, Loc 1219)
Rapid Growth and Expansion 1929 in response to the depression: "“Cut production by half starting now, but dont dismiss any employees. Well reduce output not by laying off workers, but by having them only work [in the factory for] half-days" (Kindle, Loc 1319)The inexpensive “Super Iron” (1927) By the end of 1931, Matsushita Electric was no longer a small enterprise. It manufactured more than two hundred different kinds of products in four categories: wiring fixtures, radios, lamps and dry batteries, and electrothermal devices (Kindle, Loc 1432)... As a result, employment nearly doubled, growing to 886 "By 1942, ten years after entering the business, Matsushita Electric was the largest radio manufacturer in Japan, with 30 percent market share and a monthly volume of 30,000 units." (Kindle, Loc 1414). The radio was developed in 3 months. MKs Radio - 3 Months Development (1931)
WWII and Recovery In May of 1933, Matsushita reorganized the firm by product. into 4 divisions (radios, batteries, wiring implements, and heating appliances). In February 1932, an export department was established—possibly the first of its kind for an electrical manufacturer in Japan As early as 1938, Matsushita Electric manufactured a few products for the military (ships, bayonets, etc...) The years after WWII were difficult. Not until 1950 were both KM and the firm KM explaining the The first issue of the PHP allowed to operate freely again. division system (1933) journal (1947) "The man who went into the war a citizen of Japan came out more of an internationalist. The man who wishedto serve society as a means to grow his firm became more concerned with the condition of humankind as an end in itself." (Kindle, Loc 2125)
Leadership Credo Explaining ideas from his book, Thoughts on Man (1972)
Transformational Leadership Exceptional form of influence that moves followers to accomplish more than what is usually expected of them.His inquisitiveness, challenging the status quo, his vision, and his ability to inspire hisemployees were far from the norm among corporate heads in the 1930s and ‘40s."Quadrupling sales in five years by 1961 is a goal set not out of greed for fame or profit,but as a means of fulfilling the duty manufacturers have to society.By 1970 MEI was probably the most efficient large enterprise in all of Japan. Moreefficient than Sony, Honda and mighty Toyota. "KM helped convince us that infinite possibilities really did exist" - Shinya, head designer at MEI
Servant Leadership Helping followers grow and succeed, Behaving ethically, and Creating value for community- First to employ a division system giving each division significant amount ofauthority and independence- Passion for education : Sales training institute (1934), factory worker trainingfacility (1936), MIGM (1979)- Gave Japanese workers time to enjoy life, MEI was the first well-knownJapanese company to change to five-day work week while keeping the samewages- Raise employee wage levels so that they would exceed those in Europe andbe compatible with incomes in North America.- KM believed that mission of a manufacturer should be to overcome poverty, torelieve society as a whole from misery.
Authentic Leadership Sense of purpose, strong values, self-discipline- Leadership by example.- Tried to find meaning to his life and his past sufferings.- PHP (Peace Happiness through Prosperity) Institute ○ Human beings are by nature basically good and responsible. ○ The human race has demonstrated a capacity for growing and progressing both materially and spiritually ○ Human beings have the power of choice ○ We have the capacity to bring material and intellectual resources to bear on the difficult problems facing the world. ○ Solving difficult problems requires above all an open mind and the willingness to learn.
Ethical Leadership Respect others, Builds community, Manifest honesty, shows justice- Decisions were made with input frommany employees and implemented onlyafter everyone has had a say- KMs wealth came from his stock not hissalary- Shifting manufacturing employees tosales instead of layoffs during depression- Often bowed to junior store clerks andother employees. KM was courteous KM at the signing ceremony which foundedregardless of rank and status. the Matsushita Electric Labor Union (1946)
Global Leadership Cross cultural experience- His very first trip to NY in 1951(57 years old) one-month trip became three months (movies, haircut...)- Next trip to Europe- Learned that sending its own employees abroadwas necessary to transfer the company’s culture... Building global business- Joint venture with N.V Philips, a Dutch Company Matsushita leaves Japan for his first U.S. visit (1951)- Sales company established in the U.S- Under the brand names of National and Panasonic,millions of VCRs, radios, shavers, TVs, and morewere purchased by citizens of dozens of countries- Compared to nearly every other company in and outof Japan, Matsushita Electric’s growth starting in the1950s was explosive. Only two other firms saw equalsuccess: Honda and Sony.(Kindle, Loc 2354) KM signing a joint-venture agreement with Philips Electronics (1952)
Cultural Implications Individual level- Personal life, romance- Very visible, unlike other Japanese leaders Corporate level- Daily ritual of morning assemblies- Divisional structure, delegating- Respect for employees National level- Role of the government: Zaibatsu Global Level- Cultural experiences in NY, joint venture with Konosuke Matsushita with his wife MumenoPhilips, sales company establishes in US. at Arashiyama in Kyoto (1941)
MK PoliticsFounded the Matsushita Institute of Government and Management (MIGM) in 1979, where administrators,part-time instructors, and students run the institute. Students are taught to develop in them five qualities: (1) asincere belief that real determination can overcome nearly any obstacle, (2) a spirit of independence inthought and action, (3) a willingness to learn from all one’s experiences, (4) an ability to break away from oldstereotypes and traditional thinking, and (5) a capacity to cooperate and collaborate with others.After graduation, most alumni keep in close contact with the school. They generate projects for students. Theyhelp each other in their election campaigns. And they hope—at least some of them do—to change the natureof Japanese politics.(Kindle, Loc 3026) As of mid-1993, 130 students had graduated from MIGM. In the July1993 national elections, twenty-three MIGM alumni ran for seats for the national Diet, the equivalent of the U.S. Congress.(Kindle, Loc 245) The Matsushita Institute of Government and Management
MK The PhilanthropistEstablishment of the Japan Prize in 1983. The award “is intended to honor scientists, of whatevernationality, whose research has made a substantial contribution to the attainment of a greater degreeof prosperity for mankind.”His philanthropies accelerated as he aged. From 73 to 77 he donated over $21 million. During the nextten years, the gifts grew to $78 million. In ‘88 and ‘89, his charities totaled $276 million. (Kindle, Loc2905) At the second Japan Prize award ceremony (1986)
MK The AuthorHe rarely attended the symphony or went onlong vacations.The institute also published around fourhundred books per yearHundreds of titles were also offered on video.PHP(Peace and Happiness throughProsperity), has for some time had a largercirculation than any other monthly publicationin JapanMatsushita’s first book dates to 1953, his last Speaking to supporters of the PHP Institute (1965)to 1990. In total, forty-six manuscripts bear hisname.He listened to their advice, even agonizedover it but ultimately, he published his ideasanywayHis perspective on government andmanagement could be radicalVirtually none of his publications refers to hischildhood. Guiding Emperor Showa on the grounds of the Asuka Preservation Foundation (1979)
Difficulties Product homogeneity Price competition Economies of scaleUnwilling to cut off profit losing department Limited by their own specifications "Second straight year, with an estimated total loss of more ¥1.5 trillion, or around $19 billion, over the two fiscal years." - WSJ
Recent Changes: 2012 President, Kazuhiro Tsuga"Since the foundation of our company in 1918, we have been carrying out all ofour activities following our management philosophy which commits us to makinga contribution through our business operations to improving the lives of peoplearound the world, and to the further progress of society. Always making "people"central to our activities and thereby focusing on "peoples lives," we have beenmoving forward together with our customers. And now, looking to 2018, the100th anniversary of our founding, we are working under a grand vision ofbecoming a Green Innovation Company where we can integrate ourenvironmental contribution and our business growth. As global environmentalissues are becoming the biggest common challenge that the global communityfaces, starting with peoples lives, we aim to take the lead in bringing about agreen revolution, and create a society in which peoples lives are enriched in asustainable manner. We believe that this is the approach we should take to putinto practice our management philosophy in todays world." Kazuhiro Tsuga,Presidents MessageCorporate activities are based on an unchanging management objective,established by the founder Konosuke Matsushita, stipulating that the companymust contribute to society through its business as a public entity.
Leadership Styles - Staying focused on the Customer, MKs missionMr. Tsuga joined Panasonic in 1979. His first Transformational Leader: Giving subordinatesproject was working on an electronic version of clear instruction about his expectations and whatthe Chinese board game Go. needs to be done for changes to be made in theFor the next 29 years, he was in research and organization.development, building up a portfolio of patentsbut developing little management experience. In Directive Leadership/Achievement Oriented1986, he earned a master’s degree in computer path Goal theory: Give subordinates instructionsscience from the University of California, SantaBarbara. about their task, including: ● goal to become the No. 1 Green •what is expected of them, Innovation Company in the electronics •how it is to be done, industry by 2018, the 100th anniversary of •the timeline for when it should be completed its foundation. ● a bold leader "We will offer better living which provides people ● making tough decisions to turn company around the world with a sense of security, comfort around. and joy in a sustainable way.Our most pressing ● preaches survival through tough love. priority must be to return the basics and thoroughly pursue customer value. Panasonics DNA is to ● Main goal is to restructure and “build focus on its customers." products that will sell around the globe”
ReferencesInagaki, T; Osawa, J (Oct 31, 2012). Panasonic Stock Tumbles. New York, NY: The Wall Street Journalhttp://online.wsj.com/article/SB10001424052970204712904578089962887027962.htmlKelly, T (Nov. 8 2012). A New Style of Leadership at Panasonic. New York, NY: The New York Times.http://www.nytimes.com/2012/11/09/technology/09iht-panasonic09.htmlKotter, J.P (2010). Matsushita Leadership. New York, NY: The Free PressWeston, M. (1999). Giants of Japan: The lives of Japans greatest men and women. New York, NY:Kodansha America