Kazuo Inamori: What I See in the Philosophy of Oriental Management.

Table of Contents

Original Source: Business Review

Credit to: Wang Hai Jie – former senior editor of Business Review.

Kazuo Inamori 1
Kazuo Inamori

Who is Kazuo Inamori?

Kazuo Inamori founded Kyoto Ceramics Co., Ltd. (currently known as Kyocera) at the age of 27. Kyocera achieved profits in the first year of its establishment and has made profits every year for the next 50 years without making a loss.

At the age of 52, he founded KDDI (currently the second largest communications company in Japan). Both companies have been selected as Fortune Global 500 companies.

In 2010, at the age of 78, he was ordered to take over the CEO of JAL, Shuaiyin, with zero salaries and no team working under him.

What I See in the Philosophy of Oriental Management

Mr. Kazuo Inamori is known as the “Sage of Management” in Japan.
What is it that made Inamori’s business a miracle? Wang Hai Jie – former senior editor of Business Review interviewed Kazuo Inamori, hoping to find out the essence of management by exploring the old man’s thoughts on Eastern management.

Kazuo Inamori’s answer is surprisingly simple: None, but when he’s making any business decisions, his principle is, “what is right as a human being”.
He believes in running a business with altruism, and altruism is what’s right as a human being.

When making any decision, business owners must ask themselves: 

Are these decisions of “good motives and selflessness”?

Should I do this as a human being? 

– Kazuo Inamori

Such questions should be asked repeatedly in the hearts of the business owners, and various decisions can be made on this principle. His management philosophy of “rising from the heart” stems from his strong Eastern ideological background and his deep understanding of Chinese Confucianism, Buddhism, and Taoism.

Yet, Kazuo Inamori’s management practices also have strong Eastern characteristics, and some of his practices are completely contrary to those of Western management methodology.

People’s heart comes first before the system

In Kazuo Inamori’s view, no matter how great the mechanism, how strict the standards, and how precise the systems, it is still impossible to put an end to bad intentions.

Supervision and anti-supervision are nothing but an intellectual race between good and evil. If people’s moral concepts are not changed, unethical incidents and corruption will certainly continue to occur and exist. Therefore, the key is the “heart” of the business owners, and this “heart” itself must be completely transformed.

Spiritual rewards come first before material incentives

In Kazuo Inamori’s view, the Japanese nation is a homogenous nation with a strong sense of balance, so people are unwilling to accept a big difference in terms of remuneration and treatment among their peers. 

If Japanese companies also adopt European and American style achievement-based idealogy, the organization will be strong at first because “you can just work hard to get more bonuses”, but within a few years, people will become distracted with materialism and fall trap into resentment and jealousy. Making it impossible to get good results in business, and grow as an organization.

Therefore, in the Amoeba Management, a management system designed by Kazuo Inamori himself, he put more emphasis on spiritual rewards. 

The interest of employees comes first before shareholder interest

In Kazuo Inamori’s view, the purpose of business operations is neither to “fulfill the dream of a technologist”, nor to “the selfish desires of fat managers”, but to be responsible for the current and future lives of employees and their families.

He defined Kyocera’s business objectives as “contributing to the progress and development of mankind and society while pursuing the materialistic and spiritual happiness of all employees.”

It is for the sake of protecting employees and protecting the company that Kazuo Inamori reserves a large amount of cash in Kyocera to cope with the possible recession, instead of blindly following the requirements of European and American investors to raise the level of return on equity.

Human behavior comes first before talent

Kazuo Inamori does not celebrate talents. In his opinion, no matter how talented the person is, if they don’t use their talent the right way with a good purpose, it’s all for nothing. 

Besides, talented people easily fall for their self-interest. If these talented people are part of the top management, then there is a high chance they will commit unethical behaviors that may hurt the company, or worse, the society. 

Therefore, Inamori believes it is more important to observe a person’s character and behaviors instead of his/her talent when hiring. 

In a world where western management is popular and common, Kazuo Inamori chose an eastern path that few people practiced. Yet, he has proven the utility and value of the eastern management system with results and his wisdom is truly what we need in this era. 

Interview by: Wang Haijie, former senior editor of Business Review.

Translated by: 13Owl 

Want to learn more? 

Here’s more study suggestion to our beloved Owlets.

  1. Amoeba Management
  2. Western and Eastern Management Philosophy
  3. Great Entrepreneurs from East and West

You May Also Like