Prefatory Note
Manage an Organization Based on Virtue
Kazuo Inamori, Chairman Emeritus of Kyocera Corporation
■Royal Road That Sun Wen Preached
In order to manage an organization, there is a way to manage by “force”, and a way to manage by “virtue”. In other words, there are 2 ways to govern a group; “royal road” based on virtue, and with an “iron fist” based on force.
Consideration on this “royal road” and “iron fist” methods reminds me of a part of a speech delivered by Sun Wen, the father of the Chinese Revolution, held in Kobe in 1924.
Sun Wen considered establishing a new China through the revolution. Seeking support from his friends, he visited Japan, which was leaning toward the imperialistic direction on a day to day basis, and made the audience confront the following issue.
“The material civilization of the West is a civilization of science. It has become a civilization of force, and pressing Asia. This is a civilization of an “iron fist”, as it has been referred to in China since ancient times. There is a more excellent culture of the “royal road” in the East. The essence of a culture of the royal road is moral, benevolence, and righteousness.”
“You, Japanese people, have adopted a culture of an iron fist from Europe and the U.S. At the same time, you have the essence of a culture of the royal road in Asia. In view of the future of the world culture, whether Japan will be a watchdog of the iron fist methodology of the West, or become a shield and castle of the royal road of the East, depends on what Japanese people choose carefully, after through consideration.”
Unfortunately, Japan didn’t listen to Sun Wen’s advice, pursued the “iron fist” methodology with great rapidity, and stuck to its policy to beef up its wealth and military power. At the end of the day, Japan lost the war in 1945.
The “royal road” that Sun Wen preached is a national policy based on virtue. In China, “virtue” has been described with 3 words from ancient days: “benevolence”, “righteousness”, and “courtesy”. “Benevolence” is to care for others, “righteousness” is to be in reason, and “courtesy” is to know good manners. Also, a person with all the 3 aspects of “benevolence”, “righteousness”, and “courtesy”, was called “virtuous”.
In a nutshell, “to manage by virtue” means to govern a group with lofty humanity.
■Corporate Management Depends on the Caliber of the Top Management
In corporate management alike, I believe managing by “virtue” is the only way to establish a company that can prosper for long periods.
In general, many companies in Europe and the U.S. are proceeding with corporate management with a forceful approach. For example, they wield their authority over personnel issues or appointment power based on the theory of capital. Or they try to control employees using financial incentives.
However, there is no way for a management style, which controls people with power or stimulates human desires by money, to last long. Even if there is a temporary success, such management will someday lose people’s minds, and is sure to be ruined. Corporate management must be something to aim at eternal prosperity, and the only way to achieve this goal is to proceed with management based on “virtue”.
In fact, a company grows and develops, as the personality of the management improves. I describe this as “Corporate management depends on the caliber of the top management.” As the saying goes, “A crab digs a hole that is like his own shell.” Even the management wants to make a great company, the company can be only as big as the size of the humanity of the management.
For example, it is often seen that management that succeeded in a small company starts to lose control as the company grows bigger, and ends up in bankruptcy. It is because the management couldn’t make their caliber bigger, as the organization grew bigger.
If management wants to develop the company, it is required first of all for management to make continuous efforts to improve their caliber, in other words, their humanity, philosophy, way of thinking, and personality.
However, fewer and fewer in management understands this idea in Japan these days. There has been a succession of management who has lost modesty just by making a little bit of success in their business, became arrogant, pursued self-interest, and ended up losing the success they once gained.
Now the time has come to learn from the wisdom of sages and renew our understanding on the importance of “virtue”. Doing so will not only lead to development of a group, but will also make a substantial contribution to revive the degenerating Japanese society.
