Why Japanese Businesses Are So Good at Surviving Crises

Dina Gerdeman has a nice piece in HBSWK:

On March 11, 2011, a 9.1-magnitude earthquake triggered a powerful tsunami, generating waves higher than 125 feet that ravaged the coast of Japan, particularly the Tohoku region of Honshu, the largest and most populous island in the country.

Nearly 16,000 people were killed, hundreds of thousands displaced, and millions left without electricity and water. Railways and roads were destroyed, and 383,000 buildings damaged—including a nuclear power plant that suffered a meltdown of three reactors, prompting widespread evacuations.

In lessons for today’s businesses deeply hit by pandemic and seismic culture shifts, it’s important to recognize that many of the Japanese companies in the Tohoku region continue to operate today, despite facing serious financial setbacks from the disaster. How did these businesses manage not only to survive, but thrive?

One reason, says Harvard Business School professor Hirotaka Takeuchi, was their dedication to responding to the needs of employees and the community first, all with the moral purpose of serving the common good. Less important for these companies, he says, was pursuing layoffs and other cost-cutting measures in the face of a crippled economy.

“Many Japanese companies are not that popular with Wall Street types because they are not as focused on gaining superior profitability and maximizing shareholder value,” he says. “They talk consistently instead about creating lasting changes in society.”

Their reward for thinking beyond profits? These businesses tend to live a long time. In fact, on a global map, Japan stands out for corporate longevity; 40 percent of companies that have remained in existence more than 300 years are located in the country, according to Takeuchi’s research.

Based on interviews by Takeuchi (pdf) and his HBS students, who have studied businesses rebuilding in Japan for nine years, here’s a snapshot look at how the leaders of four companies jumped into action soon after the tsunami devastated the area.

 

One Response to “Why Japanese Businesses Are So Good at Surviving Crises”

  1. Positive Thinking Says:

    Positive Thinking

    Why Japanese Businesses Are So Good at Surviving Crises | Mostly Economics

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