CORPORATE SOCIAL RESPONSIBILITY: Saving Family Business with Employees Support

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By Taro Ichikawa

Now an eminent CEO in Tokyo's Mitaka City, Masashi Takeuchi vividly recalls his days in Brazil's sprawling Sao Paulo, where he worked as a reporter for a newspaper that was rather popular with the Japanese community.

"My life was exciting because whatever I wrote was published the following day in the newspaper and I experienced a sense of accomplishment. At the same time, I learned a lot about the huge continent and what poverty means," says Masashi, the third generation president of the Takeuchi Unyu Kogyo (Takeuchi Transportation Industry) and Vice Chairperson, the Tokyo Trucking Association.

When Masashi returned home from Brazil, he presumed that father would entrust him with important management tasks. That turned out to be wishful thinking. He was assigned a series of menial jobs in different departments where he made boxes, packed at a distribution warehouse, transported cargos, cleaned toilets, and repaired work places.

"Life ordained at the bottom of the ladder was hard for me to understand those days," recalls Masashi. Recollecting his feelings some six months later, when he travelled to Brazil again, he says: "Although I was visiting familiar places, I felt a sense of estrangement as a tourist and realised that I belonged to Takeuchi Unyu Kogyo. So I made up my mind to live with the company," he adds.

He has no regrets. In fact, he is convinced that father did the right thing in putting him in all departments of the company because "it is important for a CEO to know all job sites".

Masashi Takeuchi was appointed as company president by father Kiyoshi Takeuchi at the age of 45 in the year 2000, who had succeeded his father Seitaro Takeuchi, the company's founder, when he died in 1984.

Masashi's appointment came close on the heels of a watershed in Takeuchi Unyu Kogyo's relations with Nissan whose new CEO Carlos Ghosn convened a meeting of suppliers and service providers in 1999 to announce a 'Nissan revival plan' for leading the automaker out of the red, which made snapping business ties with half of them necessary.

As a result, Mitaka factory for which the Takeuchi Company provided transport services and installed automatic reeling machines, was demolished after the textile division's transfer of the from Nissan to Toyota Industry Corporation, affiliated with the Toyota Motor company.

Also, the Ogikubo factory which housed the Aerospace Department for which the Takeuchi's provided maintenance and repairing facilities was closed as the department was transferred to another location. Further, steps were initiated for the closure of the Murayama Factory in 2001 with which the Takeuchi Company had business transactions since 1961. A miniature model of Nissan Skyline (the last model assembled at Murayama factory) is now displayed at the reception room of Takeuchi Unyu Kogyo.

A NEW ERA DAWNS

As the Nissan revival plan started unfolding, father Kiyoshi Takeuchi realised that the era in which the Tekeuchi Company and the Nissan were close business partners had come to an end. "My time is over now. A new era has dawned," he told his son and handed him over the presidency in 2000.

Masashi Takeuchi says that he learned a lot from the experience of the Nissan revival plan. "I thought that even a small company like ours needs to accept new values and new frameworks under the garb of globalization and reorganize itself so as to survive under the new circumstances."

This experience made him reflect not only management but also philosophical themes such as the way of life and how a human being lives life. "I thought that I would not be able to adjust myself to the new circumstances as long as I stick to conventional values. I was made acutely aware of the importance of surviving now. It made me realize anew -- what is otherwise a platitude -- that time is always changing."

It was only after April 2000 that the impact of the Nissan revival plan began to be felt by Takeuchi's. Although Masashi was conscious that it would be increasingly difficult to do business with Nissan in the future, he did his best to maintain some business ties with the company by actively participating in bids. (No bid was required before the Nissan revival plan.) He succeeded in some cases. The Takeuchi Company was contracted to transport auto parts from Nissan auto parts warehouse in Sagamihara city, Kanagawa prefecture, to Saitama prefecture.

Masashi also succeeded in making a contract for maintenance and repair works at the facility with IHI Aerospace Co. Ltd., which replaced Nissan's aerospace department that used to be Takeuchi's business partner, and opened a new business office near this client company.

The IHI Aerspace Co. Lt. had also got involved in the Hayabusa project, named after the Japanese fighter during World War II. Literally meaning 'peregrine falcon', Hayabusa is also the name of an unmanned spacecraft developed by the Japan Aerospace Exploration Agency to return a sample of material from a small near-Earth asteroid named 25143 Itokawa to Earth for further analysis.

NEW CLIENTS

Masashi also found new clients in distribution business such as drug companies, which encouraged the Takeuchi Company to undertake a major investment to inigurate its first logistics centre in 1998 and its second logistics centre in 2001 in Tokorozawa City in Tokyo.

The client drug company launched multiple chain stores in Tokyo and surrounding prefectures and requested the Takeuchi's to coordinate their logistics. It was the first time that the Takeuchi Company undertook an overall coordination of logistics -- carrying goods, stock control, inspection, classification, delivery -- commonly called third party logistics or 3PL, which was not yet common in Japan at that time.

Takeuchi Unyu Kogyo was convinced that its future survival lies in cultivating new clients other than those from the auto industry, and subsequently focused on distribution business. This paved the way for the Company to start liberating itself from a conventional management style of dependence on Nissan alone.

On top of that, the new CEO strengthened the company’s financial standing by attaching importance to cash flow and management by business computing. He was convinced that if there is a way for the Takeuchi's to survive in an era of globalization, he must go back to the basic principles of management and take a fresh look at all company assets, reassess their efficiency, and carry out drastic reduction of interest-baring debts. Based on this conviction, he decided to scale down the company.

EMPLOYEES' SIGNIFICANT ROLE

"Management is a new way of thinking about the importance of employees. I think that I could attract more support from labour union members by coming up with a policy of making every effort not to lay off employees during the difficult period resulting from the Nissan reform plan. Our new business of running logistical centres grew and I came to feel that it was time to nurture workforces in our company under the new changing environment," says Masashi Takeuchi.

Consequently, he applied for ISO9001 and obtained the prestigious certifications. ISO enables employees to understand what others are doing and thinking about their works. Local business offices conduct internal auditing with each other and in this process employees working for different business offices can understand business operations of other offices and what their colleagues are doing. The idea was to adopt a management style where all employees can join in one body.

He also made monthly statement of accounts transparent to all employees and applied the same format for monthly reports with check sheets so that employees working for different divisions/business offices can grasp what and how others are doing. Through these exercises, employees developed a sense of ownership.

"The most important thing as a transportation company is to avoid a traffic accident. Through consultation with the company's safety and health committee, we equipped all 30 trucks with a back monitor and a drive recorder. The aim of this is to prevent human error with support by that machine equipment and above all to protect lives of our truck drivers. Without safety, a company cannot continue to exist," says Masashi Takeuchi.

He adds: "As CEO, I feel that I have been able to do what I have wanted to do. I have been allowed to do so maybe because I like my colleagues and employees. I always feel that an employee comes to work for my company not just as a matter of coincidence; there must be some sort of providence involved. And I have my respect for that."

When a driver has an accident, the Takeuchi's tell him that if he is absolutely sure that he is not at fault, the Company would stand 100 percent behind him. In this regard, the drive recorder will protects him with evidences that would validate his account.

Masashi Takeuchi's advice to the younger generation is: "We should be pleased and thankful to be able to live a normal life. We should not fear change. Fear exists in one's own mind. I admit that I have gone through a state of mind where I was driven to the edge by pressures and stress but I learned that one cannot survive unless one changes. It is important to keep moving forward without fear of change."

*This is the sixth in a series of special IDN-InDepthNews features and articles on ‘Corporate Social Responsibility'.

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