MBA English Program Global Experience “Leading Family Business”
NAGOYA June 2024 MBA Global Experience “Leading Family Business”
As part of the global business immersion program, this year we brought the MBA students (English program) to Nagoya, Japan.
On Day 1, we visited the SCMaglev and Railway Park, a railway museum operated by JR Central. The students learned about the history and innovation of Japan’s high-speed train system and its impact on the Japanese economy and society. The development of Japan’s railway system has been a cornerstone of the country’s economic success, influencing various aspects of business, urbanization, labor mobility, technology, tourism, and environmental sustainability.
The museum visit included interactive exhibits and simulators, allowing students to experience the technological marvels of the Shinkansen and the SCMaglev trains firsthand. These immersive activities provided a deeper understanding of the engineering challenges and breakthroughs that have defined Japan’s rail industry. The students also had the opportunity to see historic train models and learn about the evolution of rail transport in Japan.
Additionally, the visit sparked discussions on the future of transportation and the potential for similar high-speed rail projects in other countries. Students reflected on how Japan’s success with its railway system could serve as a model for improving infrastructure and boosting economic growth globally. The experience highlighted the importance of innovation and investment in public transportation for sustainable development.
In the morning, we visited NUCB Business School, where Professor Yokoyama gave a lecture on the theoretical framework of family business studies. He explained several models involving family businesses, including the 4Cs Model, which emphasizes four key principles: Continuity, Community, Connection, and Command.
Continuity involves maintaining a long-term perspective and making investments to ensure the business’s longevity across generations. Community focuses on fostering good relationships with employees, creating a supportive and loyal workforce. Connection highlights building strong ties with the local community, partners, and customers, enhancing the business’s reputation and network. Lastly, Command underscores the value of independent decision-making, allowing family businesses to act swiftly and align their strategies with family values and goals.
In the afternoon, we visited Maruya Hatcho Miso Co. Ltd. in Okazaki, Aichi Prefecture, where we observed the theories studied in the morning applied to a real Japanese family business.
Hatcho miso has been made in the traditional way since long before the Edo period (1603-1868). The name literally translates to “eighth district,” indicating the facility’s location. Maruya is situated on the Tōkaidō road, historically used as a route from Kyoto to central Honshu before the Edo period.
President Nobutaro Asai explained that Hatcho miso uses only quality soybeans, natural salt, and pure water. The paste is mixed with koji and matured in authentic wooden kegs for over two years, resulting in the deep, aromatic, and cheesy taste characteristic of Nagoya cuisine, such as fried pork cutlet with miso sauce (miso katsu) and miso udon (nikomi udon).
President Asai shared that the secret behind Maruya’s longevity is its people (and microbes!). Maruya treats people and microbes gently, ensuring they are well taken care of. This focus on community is the source of Maruya’s strength, continuing for more than 700 years and aligning with the 4Cs model.
On the third day of our MBA (English program) study trip in Nagoya, which focuses on Japanese family businesses, we began with morning discussions about family business case studies, followed by an afternoon session with a talk from the leader of a prominent family business.
In the morning, Prof. Yokoyama wrote family-business case studies specifically for the MBA program at Chula. Students engaged in lively discussions about case studies involving conflicts between the management team and the organization leader, who is from the founder’s family. We learned the importance of open communication and negotiation to avoid conflicts. Effective communication helps prevent unexpected issues. In addition, communication leads to discussions and the exchange of business ideas.
In the afternoon, we had the opportunity to learn from Mr. Seiya Kato, the fourth-generation leader of Okasan Securities. Okasan Securities was founded by Mr. Seiji Kato in the 1930s in Tsu, Mie Prefecture. Unlike other stockbrokers of the time, Okasan adopted a client-first approach, actively seeking out customers rather than waiting for them to visit. This approach, along with strategically locating in underserved areas, helped Okasan become one of Japan’s leading companies.
By 1990, Okasan had joined the ranks of the Sub 10, a group of smaller firms trailing the Big 4 (Nomura, Daiwa, Nikko, and Yamaichi). Okasan’s conservative business model, focusing on client services and avoiding risky proprietary investments, enabled it to survive the 1990 stock market crash, which many competitors did not. Today, the Japanese securities industry is dominated by the Big 2 (Nomura and Daiwa), bank-affiliated firms (Mizuho, Mitsubishi UFJ, SMBC Nikko), and the Sub 2 (Okasan and Tokai Tokyo), with Okasan holding a significant position.
Mr. Seiya Kato discussed the company’s tradition, where the Kato family heir inherits the first kanji letter ‘Sei’ from the founder. He outlined his plans to transition Okasan from traditional securities brokerage and asset management to goal-based wealth management, emphasizing the role of trusted financial advisors in navigating the rapidly changing financial landscape. This session provided valuable insights into Okasan’s historical resilience, the role of founding family members, and future strategies in the financial industry.
On the final day of the MBA (English program) study trip in Nagoya, the discussion on family businesses in Japan continued through case studies. In the afternoon, a virtual company visit was conducted where students learned about various aspects and philosophies of many prominent family businesses in Japan.
During the morning class at Nagoya University of Commerce and Business (NUCB), Professor Yokoyama led a discussion on the challenges of family business succession. These challenges are particularly difficult to overcome because previous generations have established systems and practices, while the new generation faces market changes. The transition often involves balancing respect for traditional values with the need for innovation. The new leader must incorporate internal changes gradually to keep up with customer needs and maintain good relationships with employees through constant communication. Additionally, aligning the vision and strategies of different generations can be complex, requiring careful negotiation and collaboration to ensure the business remains competitive and cohesive.
In the afternoon, Professor Yokoyama highlighted several prominent family corporations in Japan, including Suzuki, Suntory, Nissin, Kikkoman, and Toyota. A key takeaway from the Toyota family philosophy is the principle of “one generation, one business (or industry).” This approach mandates that each generation must innovate and create something new to sustain company growth and diversify risk. By fostering an environment of continuous innovation and adaptation, these companies have managed to thrive across generations, contributing significantly to Japan’s economic landscape. This philosophy not only ensures the longevity of the business but also enables it to respond effectively to global market dynamics and evolving consumer preferences.
