Sanpou-Yoshi: A gift from ancient Japanese merchants in an uncertain world hundreds of years ago

Council on Business & Society Keio Business SchoolBy Takahide Shinkai, Michael Shimizu, and Yoshihiko Sakamoto: Graduate School of Business Administration, Keio University

While companies around the world face new challenges beyond simply producing a profit every year, it is extremely difficult to consistently please every stakeholder.

Under this context, Creating Shared Value (CSV) as an aspect of Corporate Responsibility (CR), a concept first introduced and also later improved by Michael Porter and Mark Kramer in 2011[1], is acknowledged by many business professionals from around the world.

Tea Market in JapanHowever, in Japan, merchants have held a similar concept from longer ago in time. Moreover, this concept could potentially help achieve the challenging endeavor mentioned above. This is “Sanpou-Yoshi”, a concept based on an ancient Japanese way of thinking as an idea for the achievement of a sustainable society.

Of value, responsibility, and Sanpou Yoshi

Before moving forward, we would like to clearly define the difference between Corporate Social Responsibility (CSR) and CSV. In this article, CSR is defined as a social contribution through activities with little relation to the core business. On the other hand, CSV is directly linked to the core business. One of the main benefits of conducting CSV is that because the actions will be embedded in the day-to-day business operations, CSV has the potential to produce an additional competitive advantage for a company in comparison to CSR. In addition, both require an initial investment. However, CSR is a donation that likely has no ongoing returns, but CSV can be a source of benefits through discovering new markets or lead to higher efficiency of business ventures.

iStock_000073333225_Medium©Kavutojpg“Sanpou-Yoshi” is a traditional business principle in Japan. “Sanpou” means three ways, while “Yoshi” refers to satisfaction. Thus, the three areas that this principle focuses on satisfying are Customer, Company, and Society. In other words, this concept satisfies both the company and stakeholders through its operations. In this way it is consistent with CSV. “Sanpou-Yoshi” is representative of how Japan has performed CSV from traditional times.

The Nepia example: flushed with success

To illustrate an example of Japanese CSV in action, we would like to highlight a company called Oji Nepia Co., Ltd. (Nepia) in Japan. The main products of Nepia are toilet paper, and other household paper products. In 2007, Nepia redefined their CR goal as “to reduce hygiene issues to save lives worldwide,” and therefore initiated a CSV program. With this, Nepia decided to donate a part of their revenue to East Timor to have one thousand toilet stalls constructed from scratch under the “Thousand Toilet Project” with Unicef. These toilet stalls were installed where access to water was either minimal or non-existent. To this day, this project is alive and well, resulting in roughly an additional thousand toilet stalls installed each year. As a result of this project and widespread recognition from the market and various stakeholders, Nepia grew their market share in the toilet paper industry. The “Thousand Toilet Project” is a successful example of CSV of a company.

iStock_000029610450_Medium©IS_ImageSourceAt the same time, Nepia’s success with this project is also “Sanpou-Yoshi” at its best. For customer satisfaction, this project helped build a strong brand image through widespread publicity and resulted in favorable promotion for Nepia. Toilet paper as a product is extremely difficult to differentiate from the competition, however through the “Thousand Toilet Project,” Nepia was able to sell more than lower priced competitors, as their packages had promotional stickers showing the alliance with Unicef which persuaded consumers to choose their product at the time of purchase. With Japan being in an extended period of deflation, and Nepia being in an industry with many similar products and with constant strong pressure to lower prices due to high price elasticity, the company was able to maintain higher prices compared to competitors as a result of this project. Here the company satisfaction is Nepia. And finally, with the construction of toilet stalls and hygiene education provided to the local communities in East Timor, Nepia was able to provide Society satisfaction in this form.

In addition to the three satisfactions of the retail shops (Customer), Nepia (Company) and East Timor (Society), Nepia was able to form an alliance with Unicef, which propelled the project and Nepia’s reputation to a whole new level. Through the Nepia and Unicef alliance, the “Thousand Toilet Project” was promoted on the websites of both organizations. Not only did the alliance make a difference in the eyes of the consumer, but also drew media attention that further strengthened the image of Nepia. These factors suggest that instead of acting alone, working with an organization closely related to a company’s CR vision leads to greater success.

Accepting the gift

Japanese Zen stone gardenIn this article, we introduced “Sanpou-Yoshi” with a specific example. With a vastly changing business environment including technological advances, uncertainty is common in any industry even for the near future. Due to these changes, new concepts such as “design thinking” have been introduced. While these new ideas and concepts can be revolutionary, in situations with high uncertainty, it can often be best to return to the basics, while learning from history. “Sanpou-Yoshi” might indeed be a gift from ancient Japanese merchants who lived in an uncertain world hundreds of years ago.

[1] Porter, Michael E.; Kramer, Mark R. Harvard Business Review. Jan/Feb2011, Vol. 89 Issue 1/2, p62-77. 16p.

Takahide Shinkai, Michael Shimizu, and Yoshihiko Sakamoto: Graduate School of Business Administration, Keio University

Links and videos

The Council on Business & Society Global Alliance is an ongoing international dialogue between six of the world’s leading business schools and an organiser of Forums focusing on issues at the crossroads of business and society – The Council Community helps bring together business leaders, academics, students and journalists from around the world. #CouncilonBusinessandSociety

 

 

 

 

 

 

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s