PanasonicMatsushita Konosuke

And the Will to Overcome Any ObstacleZhenzhong Dong, Jessica McLain, Alfonso Sintjago,

Ji-Yun Kang, Huiwen Yang,

Type Public

IndustryElectronicsSemiconductorsHome appliances

Founded March 13, 1918 (Osaka,Japan)

Founder Konosuke Matsushita

Revenue ¥7.846 trillion (2012)

Profit ¥773 billion (2012)

Employees 330,767 (March 31, 2012)

Subsidiaries Sanyo

Konosuke's Philosophy

In a single imperative: " Be a Humble Merchant."

Explanation: 1. Close to the customers2. Encourage employees to change3. Late 1960s, company's psyche:

A.keep your head downB.focus on the business basicsC.waste no time on foolish publicityD.be modest

4. national shops ( now Panasonic)

Konosuke's Age

Regional 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

Konosuke's Age Continued

The Hard Years, 1985-1999Humble philosophy did not adapt to this age.

The End of the Twentieth Century:Reorganization of the company is inevitable.

Panasonic Information and Communications Systems Center (1992)

Reforming Brand: Panasonic Idea for Life

Major Problems:Individual marketing team with no 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

MK's 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)

MK's 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 employer of seven years. To some degree, the problem was the new job. The position was unfulfilling" (Kindle, Loc 806)

Outside view of a reproduction of the house that served as both factory and home during

the early years of Matsushita Electric

Building Panasonic

"None of the five had the equivalent of a high school education. None had any experience with a start-up company. None was wealthy or had connections to sources of finance. More basically, not one of them knew how to manufacture an electrical socket." (Kindle, Loc 858)

"In early December, the wholesaler came to Matsushita and suggested that he set aside the electric plug project and make one thousand insulator plates. KM agreed to do 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 through splashy advertising (Kindle, Loc 1219)The bullet-shaped bicycle lamp (1923)

Rapid Growth and Expansion

1929 in response to the depression: "“Cut production by half starting now, but don't dismiss any employees. We'll reduce output not by laying off workers, but by having them only work [in the factory for] half-days" (Kindle, Loc 1319)

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.

The inexpensive “Super Iron” (1927)

MK's 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 allowed to operate freely again.

KM explaining the division system (1933)

"The man who went into the war a citizen of Japan came out more of an internationalist. The man who wished to 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)

The first issue of the PHP journal (1947)

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 his employees 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. More efficient 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 of authority and independence- Passion for education : Sales training institute (1934), factory worker training facility (1936), MIGM (1979)- Gave Japanese workers time to enjoy life, MEI was the first well-known Japanese company to change to five-day work week while keeping the same wages- Raise employee wage levels so that they would exceed those in Europe and be compatible with incomes in North America.- KM believed that mission of a manufacturer should be to overcome poverty, to relieve 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 from many employees and implemented only after everyone has had a say

- KM's wealth came from his stock not his salary

- Shifting manufacturing employees to sales instead of layoffs during depression

- Often bowed to junior store clerks and other employees. KM was courteous regardless of rank and status. KM at the signing ceremony which founded

the Matsushita Electric Labor Union (1946)

Global LeadershipCross 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 abroad was necessary to transfer the company’s culture...

Building global business- Joint venture with N.V Philips, a Dutch Company- Sales company established in the U.S - Under the brand names of National and Panasonic, millions of VCRs, radios, shavers, TVs, and more were purchased by citizens of dozens of countries- Compared to nearly every other company in and out of Japan, Matsushita Electric’s growth starting in the 1950s was explosive. Only two other firms saw equal success: Honda and Sony.(Kindle, Loc 2354)

Matsushita leaves Japan for his first U.S. visit (1951)

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 Philips, sales company establishes in US.

Konosuke Matsushita with his wife Mumeno 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) a sincere belief that real determination can overcome nearly any obstacle, (2) a spirit of independence in thought and action, (3) a willingness to learn from all one’s experiences, (4) an ability to break away from old stereotypes 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. They help each other in their election campaigns. And they hope—at least some of them do—to change the nature of Japanese politics.(Kindle, Loc 3026) As of mid-1993, 130 students had graduated from MIGM. In the July 1993 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 Philanthropist Establishment of the Japan Prize in 1983. The award “is intended to honor scientists, of whatever nationality, whose research has made a substantial contribution to the attainment of a greater degree of prosperity for mankind.”

His philanthropies accelerated as he aged. From 73 to 77 he donated over $21 million. During the next ten years, the gifts grew to $78 million. In ‘88 and ‘89, his charities totaled $276 million. (Kindle, Loc 2905)

At the second Japan Prize award ceremony (1986)

MK The Author

He rarely attended the symphony or went on long vacations. The institute also published around four hundred books per yearHundreds of titles were also offered on video. PHP(Peace and Happiness through Prosperity), has for some time had a larger circulation than any other monthly publication in JapanMatsushita’s first book dates to 1953, his last to 1990. In total, forty-six manuscripts bear his name. He listened to their advice, even agonized over it but ultimately, he published his ideas anywayHis perspective on government and management could be radicalVirtually none of his publications refers to his childhood.

Speaking to supporters of the PHP Institute (1965)

Guiding Emperor Showa on the grounds of the Asuka Preservation Foundation (1979)

Difficulties

Product homogeneity

Price competition

Economies of scale

Unwilling 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 of our activities following our management philosophy which commits us to making a contribution through our business operations to improving the lives of people around the world, and to the further progress of society. Always making "people" central to our activities and thereby focusing on "people's lives," we have been moving forward together with our customers. And now, looking to 2018, the 100th anniversary of our founding, we are working under a grand vision of becoming a Green Innovation Company where we can integrate our environmental contribution and our business growth. As global environmental issues are becoming the biggest common challenge that the global community faces, starting with people's lives, we aim to take the lead in bringing about a green revolution, and create a society in which people's lives are enriched in a sustainable manner. We believe that this is the approach we should take to put into practice our management philosophy in today's world." Kazuhiro Tsuga, Presidents Message Corporate activities are based on an unchanging management objective, established by the founder Konosuke Matsushita, stipulating that the company must contribute to society through its business as a public entity.

Leadership Styles - Staying focused on the Customer, MK's mission

Mr. Tsuga joined Panasonic in 1979. His first project was working on an electronic version of the Chinese board game Go.For the next 29 years, he was in research and development, building up a portfolio of patents but developing little management experience. In 1986, he earned a master’s degree in computer science from the University of California, Santa Barbara.

● goal to become the No. 1 Green Innovation Company in the electronics industry by 2018, the 100th anniversary of its foundation.

● a bold leader● making tough decisions to turn company

around. ● preaches survival through tough love.● Main goal is to restructure and “build

products that will sell around the globe”

Transformational Leader: Giving subordinates clear instruction about his expectations and what needs to be done for changes to be made in the organization.

Directive Leadership/Achievement Oriented path Goal theory: Give subordinates instructions about their task, including:

•what is expected of them,•how it is to be done,•the timeline for when it should be completed

"We will offer better living which provides people around the world with a sense of security, comfort and joy in a sustainable way.Our most pressing priority must be to return the basics and thoroughly pursue customer value. Panasonic's DNA is to focus on its customers."

References

Inagaki, T; Osawa, J (Oct 31, 2012). Panasonic Stock Tumbles. New York, NY: The Wall Street Journalhttp://online.wsj.com/article/SB10001424052970204712904578089962887027962.html

Kelly, 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.html

Kotter, J.P (2010). Matsushita Leadership. New York, NY: The Free Press

Weston, M. (1999). Giants of Japan: The lives of Japan's greatest men and women. New York, NY: Kodansha America