Made In Japan

by Akio Morita

  In our labor relations, we have a kind of equality that does not exist elsewhere. We see very little distinction at Sony between blue- and white-collar workers. And if a man or woman becomes successful as a union leader, we are very interested, because these are the kind of people we are looking for in our management ranks, people who can be persuasive, can make people want to cooperate with them. Management is not dictatorship. Top management of a company has to have the ability to manage people by leading them. We are constantly looking for capable persons with these qualities, and to rule people out because they lack certain school credentials or because of the job they happen to find themselves in is simply shortsighted. There is very little of the adversarial spirit in our companies, and making a living out of opposition to something is not possible.

  I do not want to give the impression that relations between company and management in Japan are always sweet, because that is not always the case. Toyota Motor Company suffered a serious strike in 1950 that led to the resignation of top management, and there have been major, if short-lived, strikes in one sector or another since the end of the war. There are strikes almost every day in Japan, very brief ones, to be sure, but the demonstrations make their point with management. However, the days lost in labor disputes have been decreasing since reaching a new high in 1974 after the oil embargo. In that year, Japan lost 9,663,000 man-days of labor to labor-management disputes; the United States lost 47,991,000 and the United Kingdom lost 14,750,000 in the same period. We have improved, and the gap is much wider. In 1984 Japanese industry lost only 354,000 man-days to labor disputes, and the U.S. lost 8,348,000, while in the U.K. the number soared to 26,564,000. Of course, the United States is a much bigger and more diversified place, but the comparison of working days lost between the free world’s first and second largest economies is interesting, and Britain’s figures seem staggering.

  My only experience with a real strike goes back to 1961, on the fifteenth anniversary of our company, and I was put to the test to figure out how to handle it. Our original union was strongly influenced by leftists, and the left picked Sony as a target that year, challenging us, demanding a closed shop. I picked up the union’s challenge, saying that I thought the closed shop was unfair. I told them, “A closed shop is a violation of individual rights. If people want to form another union, they have the right to do it. That is freedom and that is democracy.” It was quite a challenge, but I sensed the union leaders were getting strong and wanted to dramatize the issue. So did I.

  The union leaders knew that we were going to have our anniversary celebration on May 7, and they threatened to strike us that day. They thought that this threat alone would make us give in because they knew how much the anniversary meant to us. I saw it in another light. I knew our employees, most of them personally. I knew we had many who had good common sense, who would approve an open shop, and who would get out of this politically influenced union and join a union that had a more responsible attitude. I had confidence in our good relations with our employees, and I did not want these people who had a feeling of unity with the company to be guided by a few extremists.

  I acted very tough. Their leader thought I was bluffing, that I would become agreeable at the last minute because I wanted to have a successful celebration. We had planned to hold the ceremony at our headquarters building, and we had invited quite a few dignitaries, including Prime Minister Hayato Ikeda. We had many bargaining sessions with the union as the anniversary drew closer, and each day they seemed to get cockier, as though they didn’t want a settlement. They were thinking we would have to give in, that the company would lose face if it tried to have an anniversary celebration and a party while the streets were full of picketers. I didn’t give them a clue as to what I had in mind, but I held my bargaining ground up to the last minute. We came down to the night before the anniversary and nothing was settled. The union leaders stormed out.

  The morning of our anniversary the strikers surrounded our building in Shinagawa. The streets were blocked with strikers from our union and others who had been brought in to swell the crowd. Some carried placards denouncing Ikeda as well as Sony. At the same time, some of our engineers had decided to form their own union, and so many of them showed up with their own banners, supporting us, and hundreds of loyal Sony employees were also out in the street, behind the strikers and the engineers. I had appeared in the window in my morning coat, prepared for the anniversary. We had banners strung up announcing the celebration. But Ikeda and the other guests did not come to the Sony building for the celebration, and the strikers thought they had managed to force us to cancel it for a while, but they soon realized they were wrong.

  Late the previous night, many of us executives who were staying in the headquarters building day and night during the bargaining called every one of the three hundred invited guests and changed the site of the celebration to the Prince Hotel about a mile away. The prime minister arrived at our celebration unmolested and the party was a great success. Ibuka did the speaking for Sony. When the strikers realized they had been outwitted, the humiliation was theirs. I had slipped out the back way and managed to get to the party at the hotel before it was over. They gave me a round of applause when I walked into the room, and the prime minister said Sony’s attitude in confronting extremists should be appreciated by others. The union gave up the strike, and a second union was also formed. Today in the Sony parent company we have two unions, including the original one that is sometimes very difficult to deal with, and we of course also have many nonunion people. In fact, the majority of our employees are not unionized, but our relations with all of our employees are very good.

  The reason we can maintain good relations with our employees is that they know how we feel about them. In the Japanese case, the business does not start out with the entrepreneur organizing his company using the worker as a tool. He starts a company and he hires personnel to realize his idea, but once he hires employees he must regard them as colleagues or helpers, not as tools for making profits. Management must consider a good return for the investor, but he also has to consider his employees, or his colleagues, who must help him to keep the company alive and he must reward their work. The investor and the employee are in the same position, but sometimes the employee is more important, because he will be there a long time whereas an investor will often get in and out on a whim in order to make a profit. The worker’s mission is to contribute to the company’s welfare, and his own, every day all of his working life. He is really needed.

  Companies have different approaches to this even in Japan, but basically, there has to be mutual respect and a sense that the company is the property of the employees and not of a few top people. But those people at the top of the company have a responsibility to lead that family faithfully and be concerned about the members.

  We have a policy that wherever we are in the world we deal with our employees as members of the Sony family, as valued colleagues, and that is why even before we opened our U.K. factory, we brought management people, including engineers, to Tokyo and let them work with us and trained them and treated them just like members of our family, all of whom wear the same jackets and eat in our one-class cafeteria. This way they got to understand that people should not be treated differently; we didn’t give a private office to any executive, even to the head of the factory. We urged the management staff to sit down with their office people and share the facilities. On the shop floor every foreman has a short meeting with his colleagues every morning before work and tells them what they have to do today. He gives them a report on yesterday’s work, and while he is doing this he looks carefully at the faces of his team members. If someone doesn’t look good, the foreman makes it a point to find out if the person is ill, or has some kind of a problem or worry. I think this is important, because if an employee is ill, unhappy, or worried, he cannot function properly.

  Sometimes a person’s job or work situation does not suit that person. In Japan changing jobs is b
ecoming more common, but job changing is still rare compared to the U.S. Since we do not have in our system the mobility that the American worker has, where it is easy to quit one job and get another, I figured that we had to do something in our company to handle such a situation. We want to keep the company healthy and its employees happy, and we want to keep them on the job and productive.

  All of our engineers are first assigned to work on the production line for a long enough period for them to understand how production technology fits in with what they are doing. Some of the foreign engineers do not like to do this, but the Japanese engineers seem to welcome the opportunity to get firsthand experience. In the United States a foreman can remain a foreman all his life, and that is all right if it pleases him and the company. But I think it is better to move people than to leave them on one job too long where their minds might get dulled.

  In order to foster our working relationship as colleagues and to keep in touch, I used to have dinner with many young lower management employees almost every night and talk until late. One night I could tell one of these young men had something bothering him. He was not enjoying himself, and I encouraged him to say what was on his mind. After a few drinks he loosened up. “Before I joined this company,” he said earnestly, “I thought it was a fantastic company. It is the only place I wanted to work. But I work for this section chief, Mr. So-and-So, and in my lowly capacity I work for this man, not Sony. He represents the company. But he is stupid, and everything I do or suggest must go through this guy. I am very disappointed that this stupid section chief is Sony as far as my career is concerned.”

  This was a sobering thought for me. I realized there might be many employees in our company with problems like this and we should be aware of their dilemmas. And so I started a weekly company newspaper where we could advertise job openings. This made it possible for employees to try for other jobs confidentially. We try to move our employees into related or new work about every two years, but energetic employees on the move must be allowed to have this opportunity for earlier internal mobility, for finding their own work level.

  We get a double benefit from this: the person can usually find a more satisfying job, and at the same time the personnel department can identify potential problems with managers whose subordinates are trying to get away from them. We have had cases where we discovered a manager was inadequate because so many people working under him asked to be transferred. Our solution is to transfer the person to a position where he or she doesn’t have as many subordinates, and that has usually solved the problem. We learn a lot by listening to our employees, because, after all, wisdom is not the exclusive possession of management.

  Another important aspect of the internal mobility system is this: occasionally the man we recruited as a guard or some other low-level job answers an ad for a job as an advertising copywriter or a similar type of job, and after examination we find that he is qualified and turns out to be very good in the new job. We often run an ad for a typist or a driver or a guard and people apply without thinking about their true ability, because they just need a job. In the beginning, the personnel department assigns new employees to a job, but personnel departments or managers are not all-knowing, and management is not always capable of putting the right man in the right place every time. Rather, the employee should want to find the right job, so that is why I said to a young worker who was complaining about his foreman, “If you are not satisfied with your job, you should have the right to find a more agreeable one. Why don’t you?” If the person selects what he wants to do, he will be encouraged because he got the job he wanted and he will likely apply himself to the new job very diligently. At least that is our experience. We have many jobs and many employees, and there is no reason why we cannot match the jobs with the help of the people who are actually going to do the work.

  This is not typical of Japanese companies, unfortunately, but I long ago decided that I wanted a different system, a system where the door to change and improvement was always open. Anything that tended to shut that door, in my opinion, was wrong, and that is why I established the rule that once we hire an employee, his school records are a matter of the past and are no longer used to evaluate his work or decide on his promotion. The book I wrote on the subject struck a responsive chord; two hundred and fifty thousand copies were sold in Japan, an indication of the public’s attitude to the system that exists in most other companies even today. For a little while after the book came out, we had difficulty hiring graduates from the “name” universities, because they thought we were prejudiced against them. We were able to explain, however, that that is not the case, but that we were seeking ability, not just people with school pride. Now we get recruits from all the top schools, including the “name” ones.

  When our company had just begun, we were novices at management, so we had no choice but to do things in our own unorthodox way. In the beginning, we were small enough so that we could discuss each problem with the entire company and try different approaches until we were satisfied or we solved the problem. I believe one of the reasons we went through such a remarkable growth period was that we had this atmosphere of free discussion. We have never tried to stifle it.

  Ibuka is a person with great leadership qualities—he attracts people to him and they invariably want to work with him. In fact, the history of our company is the story of a group of people trying to help Ibuka make his dreams come true. He never believed in one-man management. It was not only Ibuka’s genius and originality in technological fields or his ability to look into the future and accurately forecast for us that struck everyone so forcefully, but also his ability to take this group of young and cocky engineers and mold them into a management team that could cooperate in an atmosphere where everybody was encouraged to speak out.

  When most Japanese companies talk about cooperation or consensus, it usually means the elimination of individuality. At our company we are challenged to bring our ideas out into the open. If they clash with others, so much the better, because out of it may come something good at a higher level. Many Japanese companies like to use the words cooperation and consensus because they dislike individualistic employees. When I am asked, and sometimes when I am not, I say that a manager who talks too much about cooperation is one who is saying he doesn’t have the ability to utilize excellent individuals and their ideas and put their ideas in harmony. If my company is successful, it is largely because our managers do have that ability.

  I have had to argue the point loud and long even within my company. Some years ago, when I was deputy president and Michiji Tajima was chairman of the board, we had a clash that illustrates my point.

  Tajima was a very fine man, a distinguished gentleman of the old school who had been director general of the Imperial Household Agency, which handles the affairs and details of the royal family. I had some views that angered him and I persisted in trying to push through my viewpoint, although I could see Tajima was opposed—I can’t even remember what it was about after so many years. But as I went on, it was obvious that he was getting increasingly irritated and finally he could stand it no longer and said, “Morita, you and I have different ideas. I don’t want to stay in a company like yours where you don’t have the same ideas that I have and we are sometimes in conflict.”

  I was very bold in my response because I felt as strongly then as I do now about this issue. I said, “Sir, if you and I had exactly the same ideas on all subjects, it would not be necessary for both of us to be in this company and receive a salary. Either you or I should resign in that case. It is precisely because you and I have different ideas that tins company will run a smaller risk of making mistakes.

  “Please think of my views without getting angry with me. If you are going to resign because I have a different idea, you are not showing loyalty to our company.”

  This was new thinking in a Japanese company, and Tajima was taken aback at first, but of course he stayed on. Actually, my argument was not really new in
the company. In the very beginning, we had, as I said before, no company song (nobody could imagine the thoughtful, introspective Ibuka singing), but we did have a statement called the “Sony Spirit,” a statement in which we believed. We first said Sony is a pioneer and that it never intends to follow others. “Through progress, Sony wants to serve the whole world,” we said and went on to say that in doing so the company would be “always a seeker of the unknown.”

  We also said this: “The road of a pioneer is full of difficulties, but in spite of the many hardships, people of Sony always unite harmoniously and closely because of their joy of participating in creative work and their pride in contributing their own unique talents to this aim. Sony has a principle of respecting and encouraging one’s ability—the right man in the right post—and always tries to bring out the best in a person and believes in him and constantly allows him to develop his ability. This is the vital force of Sony.” Our idea was that people were at the heart of what we were trying to do. As we looked around at Japanese corporations we saw that very few companies were doing what we were, because the personnel departments acted like gods, assigning people and moving them around and molding people to jobs.

  I have always made it a point to know our employees, to visit every facility of our company, and to try to meet and know every single employee. This became more and more difficult as we grew, and it is impossible to really know the more than forty thousand people who work for us today, but I try. I encourage all of our managers to know everybody and not to sit behind a desk in the office all day. I enjoy showing up at a factory or a branch office and chatting with people when I can. Not long ago I found myself in downtown Tokyo with a few extra minutes in my schedule, and I noticed a small office of Sony Travel Service. I had never been there, and so I just walked in and introduced myself. “I came here to show my face,” I said. “I am sure you know me by seeing me on TV or in the newspaper, so I thought you might be interested in seeing Morita in the flesh.” Everybody laughed, and I went around the office chatting with the staff, and in those few minutes we all felt good about our sense of shared effort. On a visit to a small Sony lab near Palo Alto one day, our manager, an American, asked me if I would pose for some pictures and I said I would be happy to. Before the hour was over, I had posed with all thirty or forty employees and I said to the manager, “I appreciate your attitude. You understand the Sony family policy.”