BEYOND THE BOTTOM LINE
Canon Law for the New Millennium
06 July 2001


Shipyard worker, Ryuzaburo Kaku, rose to become Chairman of the cameras-to-copiers multinational Canon. Few Japanese businessmen have gone out on a limb the way Kaku has, in advocating a global philosophy for business.Ryuzaburo Kaku, former President of Canon, and Chairman from 1989 to 1999, says business needs a global philosophy for the 21st century, and claims his own company is putting it into practice.

When the atomic bomb fell on Nagasaki on 8 August 1945, a 19-year-old conscripted shipyard worker, who had studied atomic physics, knew immediately what had happened. He urged his colleagues to stay underground for three days contrary to orders, so saving their lives. The shipyard worker, Ryuzaburo Kaku, rose to become Chairman of the cameras-to-copiers multinational Canon. Few Japanese businessmen have gone out on a limb the way Kaku has, in advocating a global philosophy for business.

Kaku is keen to dispel the notion that multinationals invariably exploit the countries in which they operate. He advocates what he calls kyosei, the Japanese word he uses for corporate responsibility. It literally means symbiosis, though Kaku interprets it liberally as 'living and working together for the common good of mankind'.

There are four types of businesses, he says:

* those that are 'purely capitalistic', interested only in profit and caring little for employee welfare;
* those that have good labour relations and share profits with workers;
* those that look to the interests of all 'stakeholders', including employees, shareholders, customers, suppliers and the wider community;
* those that have a sense of global responsibility.

The last, he says, aim to tackle 'global imbalances'--in trade relations and job opportunities, in the gap between rich and poor nations, and in 'the quality of the environment that today's generation leaves for the next'. Kaku projects his own company in this category and wants other multinational corporations to follow suit. Business, he says, needs 'a guiding philosophy for the 21st century'.

In the last two decades of the 20th century, Canon underwent a worldwide expansion, opening 18 factories outside Japan. Out of 67,000 employees it has a European workforce of 11,500, with 9,000 in the USA, and 3,000 in China. The company, which has sold over 80 million cameras, is the world's largest producer of photocopiers and the second largest maker of printers. Its laser printers claim 70 per cent of the world market and sales of bubble jet printers have topped 10 million.

All good pragmatic business sense, no doubt, in the face of the soaring yen of the 1980s which impelled Japanese companies to transfer their manufacturing overseas. In so doing, Canon saw its sales increase by up to 20 per cent a year.

But Kaku insists that through kyosei, the common good--the 'global responsibility' he talks about--is also served in two ways: first by offsetting Japan's trade surplus, of which he is a surprisingly harsh critic, through global expansion, and secondly by creating urgently needed jobs in China and other developing Asian economies.

When it comes to the environment, Kaku, now in his 70s, is particularly concerned about the legacy being left to future generations. His traumatic experience at Nagasaki gave him his passionate concern for ecological issues. 'Of all the great problems which confront the global community today, perhaps the greatest is that of imbalance between the generations: between those of us who live on the earth today and those who will inhabit it in the future,' he says.

His kyosei philosophy is most manifest in Canon's environmental practices. A special department employs 300 people exclusively to look at ways of minimizing damage to the ecosystem, from manufacturing to disposal. Canon's largest American plant at Newport News, Virginia, recycles more than 90 per cent of its solid waste, cutting landfill costs, and reprocesses photocopiers for resale. At Dalian in China, the company employs over 2,000 people in recycling used laser copier and printer cartridges--some nine million from around the world to date.

The driving force behind kyosei is a man who, it seems, has always had a mind of his own. Ryuzaburo Kaku joined Canon in 1955, when it was an up-and-coming camera manufacturer, and soon gained a reputation for being a thorn in the flesh of top management, bombarding them with suggestions and rarely satisfied with the answers. He was appointed President in 1977, after the company was unable to pay a dividend following the 1974 oil crisis, and was Chairman in 1989 until his retirement in March 1999.

Kaku does not mince his words about Japan's need for economic reform. 'Ten years ago I warned politicians and bureaucrats that if we continued to do nothing about the current account surplus we would be courting a national crisis,' he told the Mainichi Shimbun1 . He says, 'We should have embarked on structural reform back in the late 1960s when our gross national product became the second largest in the world.'

A spirit of kyosei would mean 'a decisive turn away from a Japan committed to making only itself rich, towards a focus on the quality of life'. He calls for a liberation of the private sector from state bureaucracy, and a reform of the tax system which favours savings, towards stimulating the domestic market, particularly in housing and other social infrastructures. Kyosei, he says, would take Japan beyond the philosophy of the Meiji period of catching up with the West.

Kaku's advocacy of kyosei has been welcomed by the Keidanren (Federation of Economic Organizations), which has included kyosei in its charter of good corporate conduct. Abroad, he has found welcome support from the Caux Round Table forum of American, European and Japanese business executives, of which he is a founder member. CRT incorporated the kyosei philosophy into their Principles for Business, published in 1994. The Minneapolis magazine Business Ethics wrote that Kaku's kyosei 'is gaining an international following. One reason is that it seems to work, both in terms of improving social and environmental conditions, and in making a more profitable business.... Folk are starting to dance to his tune on the international stage.'2

Canon's new President, Fujio Mitorai, is equally committed to kyosei. He and Kaku may be calling for nothing less than business responsibility for the world which future generations will inherit. But perhaps that is appropriate coming from a company named Canon. The word in Japanese is the name of the Buddhist Goddess of Mercy.

Updated from an article published in For A Change magazine, August/September 1995. Interview with Ryuzaburo Kaku by Michael Smith, Caux, Switzerland, 26 July 1994.

Ryuzaburo Kaku died on 23 June 2001, aged 75.

1. Mainichi Shimbun, 4 May 1995.

2. Supplement to Business Ethics magazine, on CRT's 'Principles for Business'.


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