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Kyocera Corporation by Chihiro Suematsu* The Journal of Small Business Innovation 2018 20(4), pp. 33-38 Kyocera Corporation by Chihiro Suematsu* Kyocera Corporation is an electronic device, information equipment, and tele- communications equipment manufacturing company headquartered in Kyoto, Japan. The company’s success has depended on its differentiated technology in ceramic manu- facturing at the first stage. This technology was first sold to produce a part in TV CRT monitors, which boomed in the 1960s right after the company’s launch. Since its founding in 1959, the company has been continuously exploring technological, product, and business development backed by its strong entrepreneurial mindset. This mindset is nurtured by the “Kyocera philosophy,” the most important vision and motto of the company, which educates and encourages employees to grow themselves, respect others, and behave for all. This philosophy was advocated by the founder, Kazuo Inamori. Keywords : Kyocera Philosophy, Ameba Organization, Employee Independence, Free Will, Problem-Solving Skills, Creativity, Empathy, Thoughtfulness, Altruism * Kyoto University Graduate School of Management (e-mail: [email protected]) CHIHIRO SUEMATSU 33 Ⅰ. Business The company has expanded its global oper- Kyocera manufactures and sells electronic ations, including in Oceania, South America, devices, information equipment, and tele- South Africa, and Israel (Figure 2). communications equipment in the global The company continues to grow its rev- market (Figure 1). enue, with a CAGR of approximately 50% Company information for Kyocera is since its founding (Figure 3). It also continues shown below: to diversify its product lines, from ceramic - Revenue: \1,423 billion parts to information and telecommunications - Capital: \115 billion equipment, to various products that include - Employees: 70,000 photocopiers, cameras, VCRs, smartphones, Figure 1 Kyocer’s Products Source: http://global.kyocera.com/company/summary/company_profile.html. Figure 2 Kyocer’s Global Operations Source: http://global.kyocera.com/company/summary/company_profile.html. 34 THE JOURNAL OF SMALL BUSINESS INNOVATION Figure 3 Net Sales by Segment solar panels, artificial joints/ teeth, artificial execrated in Japan as it reminds the people jewels, and management consulting services. human traffic (buying and selling human). Kazuo Inamori, Kyocera’s founder, also founded DDI (Daini-Denden Inc., now KDDI, Ⅱ. History with known brand of au) and revitalized Kyocera was founded by Inamori in 1959 Japan Airlines (JAL) after bankruptcy. These as Kyoto Ceramic Company (Figure 4), with adventures created huge business oppor- the differentiated technology of industrial tunities for Kyocera and are now positioned ceramic manufacturing. Its first application as sister companies. After Inamori founded DDI, one of the three mobile telecommuni- product was a core component of TV CRT cation companies, Kyocera embraced tele- monitors, the quality of which Matsushita communications equipment businesses, in- Electric (now Panasonic) was impressed with cluding smartphone manufacturing and in- enough to become Kyocera’s first user. formation consulting services. After Inamori Fueled by the high economic growth in 1960s used the Kyocera philosophy to change the Japan and the explosive growth of the TV mindset of JAL employees, the philosophy market, Kyocera’s revenue skyrocketed from became famous in Japan as a useful business \26 million in the first fiscal year to \161 tool to vitalize a company. In fact, Inamori million in the fifth. utilized the events of the founding, the corpo- Before founding Kyocera, Inamori was rate revitalization, and other M&As to pro- first employed by Shofu Manufacturing in vide stimulus to his own employees, high- 1955 as an engineer and developed forsterite lighting his challenging entrepreneurial mindset, porcelain technology. His manager, however, which has always guided the company to did not understand the value, and Inamori, create new technologies, products, and showing his non-conformist attitude, decided businesses. Kyocera was one of the earliest to leave the company. He founded Kyocera companies in Japan to actively utilize the the following year with his staff. M&A strategy, which is still emotionally Unsatisfied with Kyocera’s first success CHIHIRO SUEMATSU 35 Figure 4 Major Events in Kyocera’s History with the TV component, Inamori worried the time, the dominance and power of NTT about the sustainability of the business; he in the market was overwhelming, and nobody started diversifying product lines and pro- would take such an absurd, quixotic risk. claimed his dream to take the tiny company Inamori, however, understood the value of global. He believed that, for something to contributing to the nation and the internal come true, it must first be concretely imag- effect influencing his company, and he or- ined in the mind, a mindset that drove him dered the company to fully support the to start this adventure. Contrary to his expect- initiative. Since then, Daini-Denden, literally ations, however, Japanese markets were so “the second NTT,” has been successful, pro- conservative that they did not accept a start-up, viding Kyocera with opportunities to chal- even one with a small business success. The lenge a variety of products and businesses. markets did not easily open procurement to With his second successful start-up, Inamori young, unknown companies. Inamori, at a earned the title of the first entrepreneur in loss, decided to visit prospects in the U.S., Japan. despite having no connections, because he believed in the high quality/cost performance Ⅲ. Management Systems of his products. The products were well-re- In Inamori’s philosophy, growth equals ceived, and he continued marketing in the stability and sustainability, and his employ- U.S. The transactions with blue-chips such ees are encouraged to grow themselves. as Fairchild triggered the proliferation of Consequently, all employees are expected Kyocera products in Japan as Japanese com- panies were likely to follow the purchase to work hard and their families are educated decisions of influential U.S. companies. to understand the importance of their hard After Kyocera experienced continuous work as it eventually makes them happier. growth of 25 years, Inamori decided to enter Inamori also believes that happiness is about the telecommunication business in Japan, more than financial security, that it also which had just been deregulated after being comes from self-growth and contributing to monopolized by a state company, NTT. At society and communities. His beliefs were 36 THE JOURNAL OF SMALL BUSINESS INNOVATION elaborated and embodied as the “Kyocera ness, and altruism are emphasized. Accordingly, philosophy,” which is detailed in the next the employees support each other, and there section. In Kyocera’s business growing proc- is no discrimination or politics based on aca- esses, new technologies and new products demic backgrounds, even in the tough com- have been developed enthusiastically, and petitive environment. The philosophy com- new businesses are challenged. plements the management systems as they Kyocera has unique management systems: generate harsh confrontations among the ameba organization and a managerial ac- amebae due to fierce competition. counting system—both designed to make Inamori also emphasized self-growth, outcomes, performances, and growth trans- transparency, competition, and integrity prior parent. to profitability. And fair play and collabo- The company organization is divided into ration are encouraged; Inamori believes sym- small groups of 20~30 employees called ame- biosis should be positioned as the basis of bae, which operate on a self-supporting basis. globalization, and he has used this concept The employees have an enhanced sense of as a platform of the company’s global ex- participation and motivation in management. pansion. Employees enjoy the discussion and The small group system also serves to clarify exploration of the philosophy at official meet- the responsibilities of each group member, ings and unofficial get-togethers. secure transparency in every detail, and en- As a consequence of the philosophy, con- able a thorough check of efficiency. It also tributions to society are respected, and Kyocera drives competition among amebae (the has actively sponsored various cultural activ- Kyocera website: https://global.kyocera.com/ ities and sports. company/philosophy). A managerial accounting system was de- Ⅴ. Kazuo Inamori: The Founder signed and deployed to adequately convey Kazuo Inamori was born in 1932 in the realities of the situation and encourage Kagoshima in the south of Japan. He grad- autonomous decision-making. It depicts the uated from Kagoshima University and be- facts that they make employees recognize the came an engineer in ceramics. After founding importance of fair and transparent management. and creating Kyocera, he founded another These management systems, compared to epoch-making company in 1984: Daini-Denden recent global companies, are not very popular Inc. His goal was to show and convince among Japanese companies, at least not when employees of the continuous importance of Inamori developed them based on his own the Kyocera philosophy. Finding similarities perspective. His previous experience of free with his philosophy in Buddhism, he became competition with companies such as Fairchild a Zen Buddhist monk in 1997. In 2010, at in the U.S. also convinced him to be different age 78 and
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