Commentary / Japan

What makes up the Inamori management philosophy?

by Atsushi Aoyama

Contributing writer

This is the first of a three-part series that discusses the management philosophy of Kazuo Inamori, founder and chairman emeritus of Kyocera Corp.

Kazuo Inamori, chairman emeritus of Kyocera Corp., established the company from scratch and expanded it into the world’s No. 1 ceramic maker. He also launched KDDI, which became the nation’s second-largest telecom firm, out of his motivation to offer low-cost telecommunication services to consumers. He took charge of rebuilding the failed Japan Airlines without any financial compensation — out of his wish to do good for people and society — and transformed it into an airline with the world’s top-level profitability. He is widely known as a businessperson representative of Japan.

Inamori’s business management has characteristics completely different from others’ — in that he places a set of philosophical and ethical norms — called Inamori philosopy — at the foundation of his management. On the basis of this philosophy, he developed and practised a management system that fully takes into account how people’s mind reacts — a system that pursues not the profits or share prices of the company but the material and mental happiness of all the employees as its primary objective.

The system is known for “ameba management” — in which the organization of a company is divided into small groups called amebas and targets are set that should be easy for each employee to understand, so that all employees will be able to autonomously and proactively take part in the management and give full play to their wisdom and efforts — as well as the seven principles of “Inamori accounting” that pursues fairness in corporate accounting by coming to grips with the weakness of human mind (such as accuracy of information, compliance with norms, preventing misconduct and transparency in information). Leaders of the organization are required to brush up their personal quality so that, even in troubled situations, they can put the employees together on the judgment criterion of “what is right” as human behavior.

The Inamori philosophy and the management system based on it aim at both the company earning strong profits by winning severe competition and realizing the material and mental happinness of all employees. Many business executives are learning the philosophy and trying to incorporate that in the management of their own firms. China in particular has devoted followers of the Inamori philosophy — even more so in Japan — and their number is rapidly growing.

The Ritsumeikan Inamori Philosophy Research Center was established in 2015 as a joint project between Inamori himself and Ritsumeikan University. Behind the launch of the center was a common awareness between Inamori and the university that modern civilization is in a critical situation. Originally capitalism was meant to respect hard work and bring happiness to society, even though it may be driven by human desires. Today, however, capitalism has been transformed into one that allows limitless human greed — characterized by the desire to earn profits with as little effort as possible and the sole pursuit of one’s own gains to the maximum.

This greed capitalism, through free competition in the economy under a market fundamentalism, produced an overwhelming gap between the rich and the poor, amplifying people’s fear and confusion. Today’s civilization is trapped in a deadlock, beset by destruction of ecosystems, frequent conflicts, destabilizing economies, widening inequality, and decayed morality and ethics.

Our center thinks of this crisis of current-day civilization as a problem of human minds, rather than that of institutions and systems. In order to adequately control technology and economy so advanced and powerful that they could potentially destroy humankind itself and the ecosystems on Earth, the human minds and the vision of civilization must also have progressed to higher stages. As it is, however, they are left to the instinctive greed that humans have had since primitive times — and even appear to have undergone regression.

It will be difficult to overcome the challenges of contemporary civilization unless human minds are fundamentally re-examined. If humans continue with their activities based on greed without self-reflection, modern civilization and capitalism will be headed in the path toward self-destruction.

The most important concepts in the Inamori philosophy are an “altruistic mind” and the idea of “knowing what is enough.” An altruistic mind is an idea that the self lives by doing good and giving benefit to others, instead of doing so to the self. It means to think how all beings and creatures on Earth can cohabit and live happily together, driven not by self-sacrifice but gentle affection toward others. Adhering to a myopic self, ironically, will ultimately lead to self-destruction. The concept tells you to take an overview of the whole, so that you can benefit yourself by working to the benefit of others.

The idea of knowing what is enough derives from what Chinese philosopher Laozi said: One who is satisfied with what one has is truly rich and one who forces oneself to be so and act accordingly can get what one aims at. Under the concept, you can keep being spiritually as well as materially rich by moderating your excessive desires on the belief that “This much is enough.”

Inamori created the management system on the basis of these concepts. The Ritsumeikan Inamori Philosophy Research Center hopes to make these ideas the foundation of modern civilization. We believe it is possible to change the course of capitalism and attain cohabitation and happiness of all beings/creatures as well as a sustained development of the world economy, by converting the underlying spirit of civilization from selfish to altruistic one — and moderating the desires of humankind by knowing what is enough.

In interstate relations, all nations will ultimately go down the path of self-destruction if they view each other as threats and compete to secure their own interests. Countries around the world cooperating with each other in the spirit of altruism to jointly tackle global-scale problems, such as national resources, energy and the environment, will eventually benefit them and enhance their national interests.

With a view to building such a new civilization, the Ritsumeikan Inamori Philosophy Research Center will work together with the Inamori Academy of Kagoshima University and Inamori Kazuo (Beijing) Management Consultants Ltd.

By researching Inamori philosophy from diverse academic perspectives, our center hopes to universalize the philosophy and present to the world new ways of management, education and society based on the concept of knowing what is enough. We are trying to popularize Inamori philosophy so that anybody can learn it and put it to use either in business or in everyday life. Our center will develop an education program for elementary to high schools, universities and working adults to help people master the philosophy.

It may sound challenging to create a new civilization based on the spirit of altruism. But we believe that if people put together the power of their good heart and wonderful wisdom, they can build a spiritual civilization far advanced and richer than the material civilization driven by human desires.

The engine of a pure and beautiful altruistic mind is much powerful than one driven by desires.

Atsushi Aoyama is chief director of Ritsumeikan Inamori Philosophy Research Center.

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