Turnaround in Organizational Strategy and Human · PDF fileSince the turn of the 21st century, ... Turnaround in Organizational Strategy and Human Resources Strategy . May 2010

May 2010 ⓒ2010 Nomura Research Institute, Ltd.

All rights reserved. No part of this publication

may be reproduced in any form without the

prior written consent of NRI

'NRI Knowledge Insight' aims to address expertise and insight about market overviews and managementissues for senior business executives. This month's issue attempts to identify problems and propose solutions looking at the fields oforganizational operation and human resources development from various perspectives. Each articlefocuses on the functions and performance of personnel in terms of management resources. Complicatedand advanced skills are required from employees according to the careful selection of their desired functions. As we can see from the new concept called “Manpower strategy,” it is necessary to approachthe organizational strategies and human resources strategies essential for business management from acomprehensive perspective including both human nature and sociality.

■ Reforming Team Management of the Board of Directors Takuma NAITOAlthough corporate governance is being discussed from various points of view, most of the discussions focus onstrengthening compliance. Serious discussions are required to develop the skills of board members so that theycan maximize the value for stakeholders and improve the performance of the company. To achieve this, wepropose improving teamwork among board members.

■ KPO as a Means for Improving Productivity Takao YAMAGUCHISince the turn of the 21st century, knowledge process outsourcing (KPO) has developed among enterprises inEurope and the United States and the market is rapidly expanding. While KPO may help improve productivity in white-collar businesses, Japanese companies have not yet adopted it widely because of their unique attitude towork and for other reasons. In this paper, we propose specific measures including establishing a knowledgecenter to mediate between KPO vendors and Japanese enterprises to enhance KPO in Japan.

■ Human Resources Development of Convenience Stores Hiroyuki NOZAKIWhile the shop-front work in a convenience store gives the impression of being simple, straightforward work thatanybody could do, it actually requires various advanced skills. In particular, it is essential for store operations, mainly conducted by a small number of part-time workers, to reflect the operational expertise established by the franchiser.This paper introduces the scheme of the convenience store industry in terms of human resources development as a modern small to midium-scale business in which unskilled workers are trained to become experts in a short time.

■ A Scheme for Producing Innovation by External Human Resources Masayuki TANAKAThe rapid advancement of IT has brought about changes in the relationship between the companies who offergoods and services and the customers who consume them. This paper introduces some examples of a new style of innovation produced by a method called crowdsourcing, in which product development is promoted andmarketing strategies are formulated based on the utilization of IT and the knowledge of a large, indefinite numberof people both inside and outside an organization. It also addresses possible applications of crowdsourcing in thepublic service field and in areas where global innovation is produced.

■ Storytelling for Reviving Ambitions Teppei HOSHINORecently, some Japanese companies have been trying to strengthen the internal power derived from cherishedcorporate values, in order to grow and expand even amid the saturated market and economic downturn. This paper describes two storytelling approaches to revive ambitious visions based on corporate values, focusing onthe key issues in rediscovering corporate values and sharing ambitions.

■ [Column] What the Media Can Tell You about People III Yoshiteru MAEKAWA

Vol.10

Turnaround in Organizational Strategy and Human Resources Strategy

May 2010

Copyright ⓒ2010 Nomura Research Institute, Ltd. All rights reserved. No part of this publication may be reproduced in any form without the prior written consent of NRI.

- 1 -

1. Trend of Corporate Governance Reform Corporate governance is being discussed from

various points of view. In June 2009, the Ministry of Economy, Trade and Industry (METI) and Financial Services Agency (FSA) published guidelines on reforming governance. In December 2009, the Tokyo Stock Exchange (TSE) amended the regulation on the appointment of independent directors by listed companies and its reporting. Since the Lehman shock, the standards for governance have been strictly reviewed in many countries, such as the UK, reflecting the fact that the boards of leading financial institutions and manufacturers, including outside directors, have insufficiently managed and supervised the companies.

1) Reform guidelines proposed by METI and FSA

METI recommended strengthening the capacity of the board of directors by clarifying the independence of outside board members to protect minority shareholders. On the other hand, the FSA proposed more extensive reforms as follows: disclosure of voting results to separate management supervision from management execution and to protect shareholders’ interests, guaranteed effectiveness of auditing by auditors, reviewing the allocation of new shares to a third party that could adversely affect minority shareholders, and the mandatory appointment of outside board members in listed affiliate companies. On March 31, 2010, the FSA introduced an amended Cabinet Office regulation that requires the disclosure of names of directors who receive remuneration exceeding 100 million yen and the specific amount.

The FSA takes actions in consideration of the concerns of institutional investors both in and outside Japan. Its responses reflect the fact that the boards of Japanese companies tend to make inward-looking decisions and do not fulfill their accountability to stakeholders including investors. 2) Reforming governance focusing on compliance

Governance must be reformed for two reasons: to enhance compliance, and to improve the capacity of the board of directors to create corporate value.

The capacity to create corporate value by a board of directors means that they can maximize the value for stakeholders and improve performance. However, recent issue on governance reform have tended to focus on compliance, such as taking effective measures to prevent fraud and misconduct by companies or to

improve management transparency. 3) Efforts of Japanese companies to reform governance

Japanese companies have reformed their governance in compliance with the amended Commercial Code and Companies Act. Such efforts include appointing outside board members, introducing a new management form of company with committees, enhancing the functions of the board of auditors, and disclosing directors’ remuneration.

Although these efforts have helped to improve management transparency, the performance of boards of directors has hardly improved. The board must always make prompt, intelligent management decisions on issues including globalization of management, M&A, alliances, group companies and business restructuring, and must also respond to any incidents and misconduct. Poor decisions by the board may lead the company astray. How can a board of directors be made to create corporate value? Is it enough simply to implement proposals made by supervisory authorities, relevant nonprofit organizations, and the TSE?

2. Governance Reform Focusing on Managerial Human Resources

Corporate managers are entrusted by shareholders with the management of the company, but they sometimes conflict with shareholders. To solve such conflicts, companies have a board of directors to provide oversight. However, this system cannot be expected to improve performance. It may be useful to separate execution of management from supervision and to improve management transparency, but doing so is not directly related to improving the performance of the board of directors.

Governance reform still does not address the issue of improving the skills of board members themselves; reforming the control system merely changes its framework. Each company must seek a way to improve the quality, capacity, and actions of board members, or managerial human resources.

Reforming Team Management of the Board of Directors： A Human Resources Approach to Developing Management Capability

Takuma NAITO, Senior Consultant Management Consulting Department, Nomura Research Institute, Ltd.

May 2010


- 2 -

1) Current situation of developing managerial human resources

Japanese companies are striving to reinforce their managerial human resources. Major initiatives include introducing a succession plan (for fostering managerial successors) for systematically and effectively cultivating newly promoted board members and raising their skills.

In the succession plan, candidates for management are selected at an early stage, exposed to various positions, and assessed for further promotion. The group is often reshuffled according to their performance in respective roles and opportunities.

According to an NRI survey, about 20% of listed companies have a succession plan, 41% are working on one, but 36% have no plan to introduce such a plan (as of August 2008, Figure 1).

Figure 1. Introducing a succession plan

19.7

16.1

40.8

37.5

36.2

42.7

0.5

0.0

3.1

3.3

0% 20% 40% 60% 80% 100%

2008

(for reference)2007

Response rate

Maintained Scheduled to introduceNot scheduled Introduced, then abolishedNo answer

Source: “Survey of Executive Officers in Japanese Companies” by NRI (2008)1

The main programs for improving the skills of

existing board members are participation in outside seminars, director training by top management, and in-house training by outside lecturers (Figure 2).

Figure 2. Programs for improving the skills

of existing board members

Note: Based on the responses from 28 companies which have programs for improving the skills of board members. Source: “Survey of Executive Officers in Japanese Companies” by NRI (2008)

1 Survey period: Sept-Oct 2008; Companies surveyed: 2,181 listed

companies in the 1st and 2nd sections of TSE; Valid responses: 152 (collection rate: 7.0%)

The aims of these programs are to select candidates for board members, help them to develop managerial skills, and improve their managerial capacity.

2) Challenging issues in developing the capacity of managerial human resources

Although managers may show excellent performance and improved skills, they sometimes fail to work effectively when in a group such as the board of directors or executive committee. The disappointing performance is attributable not to individuals but to the group itself. The main reasons are: the board of directors tends to be a group of representatives of their own divisions, lack communication among members, or lack a common basis for decision-making (Figure 3).

In other words, the board of directors or executive committee is not working well as a team. If this problem remains unsolved, good results will not be obtained even if individual skills of selected personnel are raised. In some cases, only negative aspects of the organization or group may emerge such as ideas for partial optimization, inward-looking attitude, and opportunity lost due to turf wars. A dysfunctional management team may actually threaten the value of the company.

Figure 3. Problems related to board members

The board tends to be an aggregation of representatives of each division. Poor sharing of values among directors. Discussions do not aim for overall optimum. Poor communication skills cause poor understanding or misunderstanding.Limited career experience makes it difficult to solve problems.Low capability of detecting risks.Fewer opportunities to learn advanced technologies from companies or industries.Maldistribution of information among directors or uneven sensitivity to information.Personal feelings cause insufficient communication and cross-divisional viewpoints.Insufficient sharing of corporate philosophy.Need to harmonize good aspects of family atmosphere with attitude to change.

Source: Excerpted from answers to “Survey of Executive Officers in Japanese Companies” by NRI (2008)

3. Revitalizing Management Members as a Team

NRI proposes the following four steps to enable the board of directors or executive committee to function effectively as a team (Figure 4).

Figure 4. Four steps to revitalize management members

as a team

1)Analysis

Objective analysisof characteristics of the board of directors andexecutive committee

2)Identification

Identification of impediments to teamwork

4)Implementation

Efforts to form a capable team

3)Redefinition

Redefinition of roles and achievements of the team

60.7%

35.7%

32.1%

28.6%

21.4%

17.9%

14.3%

0% 20% 40% 60% 80%

Participation in outside seminars

Director training by top management

In-house training by outside lecturers

Participation in training program for executives

Appointment to leader of in-house task force

Exchanging opinions with directors of othercompanies (or other industrial groups)

Coaching by outside instructors

Response rate

May 2010


- 3 -

1) Analyzing the decision-making style of the board of directors

In the first step, the decision-making style of the board of directors or executive committee is analyzed. Analysis of corporate governance is typically limited to items such as the number of directors, separation of management execution from supervision, and introduction of outside board members. However, to improve the performance of management members as a team, it is important to look at their decision-making style, since this will allow team members to share their problems or questions in daily work that they cannot usually discuss.

What are the patterns of decision-making style of the board of directors or executive committee? NRI has identified five patterns based on data from a survey on top management, board members, and executives of about 200 listed companies (Figure 5) and has compiled the results into a database. When a company asks us to analyze its decision-making style, we use this data to show the board members their strengths and weaknesses in the five patterns.

There is no optimum decision-making style. It is important to check for differences between the desired style of the board of directors or executive committee and the current style. Styles suitable for good performance differ according to the business environment and strategies, and the style may change when there is a change of board members. Therefore, this analysis should be carried out periodically.

Figure 5. Five styles of decision-making

by the board of directors or executive committee

1. Top down style of decision-making2. High priority on schedule3. Active discussion at the board of directors

and executive committee4. Priority on opinions of higher-ranking directors5. Priority on opinions of older directors6. Active exchange of opinions across divisions7. Frequency of voting down8. Stance on risk9. Separation of execution and supervision

of management10.Decision-making in emergencies 11.Attitude to change/reform12.Consensus-building maneuvering13.Emphasis on originality of ideas14.Flexibility in decision-making 15.Challenging attitude16.Emphasis on mission and existence17.Stance on evaluating performance18.Balance between long-term and short-term viewpoints

Speed

Risk taking/challenging

Long-term viewpoint

Consensus

Experience

Speed

Risk taking/challenging

Long-term viewpoint

Consensus

Experience

Extracted 5 factors(5 points of decision-making style)

Database on results of a survey of top management, board members, & executives

of about 200 listed companies

5 factors (styles) extractedthrough factor analysis

5 factors (styles) extractedthrough factor analysis

2) Identifying impediments to teamwork In the second step, another analysis is carried out

based on the results of the objective analysis of decision-making styles to identify how each director hinders successful teamwork among the board of directors or executive committee. The board must not be considered as a “sanctuary” in this analysis. Impediments are not limited to lack of daily communication or biased ideas based on their own divisions, but include problems that members do not mention in daily discussions. Such examples are power games, personal conflicts among board members, or the responsibilities of the previous management members (Figure 6).

If such impediments can be openly discussed among board members, teamwork may start to improve. In other words, only an intensive, open-minded discussion can improve teamwork among the board of directors. To achieve this kind of analysis, a facilitator with no vested interests must preside over the group discussion, whose role is to create the environment for discussions and encourage the participants to speak their minds.

Figure 6. Examples of impediments to teamwork

3) Redefining the roles and achievements of the management team

The third step is to specifically define the achievements expected of the board of directors or executive committee. The Japanese Companies Act stipulates the authorities of the board of directors such as “deciding the execution of the operations of the Company” and “supervising the execution of the duties by directors” (Article 362). In compliance with this provision, companies delegate decision-making on important operations to the board.

However, the Companies Act merely stipulates the details of legal actions which must be taken in compliance with laws. It is important to specifically define the meanings of the expected achievements or performance of the board of directors or executive committee. What targets does the board of directors or executive committee want to achieve to realize its management principles and visions? In other words, what they want to be? By developing a clear image on this, impediments to teamwork can be overcome.

DISCO Corporation, a leading maker of precision processing tools mainly used in manufacturing semiconductors, defines the roles and mission of its

Power game among directors

Various taboos

Limited time for activitiesand lack of sense of unity

Lack of rules and need for consensus

Lack or maldistribution of information

Power game among directors

Various taboos

Limited time for activitiesand lack of sense of unity

Lack of rules and need for consensus

Lack or maldistribution of information

• Ambition of candidates for president• Personal conflicts among board members (factionalism)• Overemphasis on give-and-take relations

• Position of ownership• Arguments on past management responsibilities or failures• Sanctuary areas in management

• Lack of daily communication• Lack of opportunities for understanding members’ personality• Doubling as leader of a division

• Insufficient understanding of differences in contributions for each case

• Fewer remarks from directors other than the top managementdue to lack of understanding

• Overemphasis on achievement of division in charge • Misuse of asymmetric information to serve own interests

• Ambition of candidates for president• Personal conflicts among board members (factionalism)• Overemphasis on give-and-take relations

• Position of ownership• Arguments on past management responsibilities or failures• Sanctuary areas in management

• Lack of daily communication• Lack of opportunities for understanding members’ personality• Doubling as leader of a division

• Insufficient understanding of differences in contributions for each case

• Fewer remarks from directors other than the top managementdue to lack of understanding

• Overemphasis on achievement of division in charge • Misuse of asymmetric information to serve own interests

Examples of situations Examples of factors

May 2010


- 4 -

board of directors as improving social value, achieving the optimum exchange of values with stakeholders, and maintaining the optimized exchange of values. DISCO’s management members use this definition as criteria for their decision-making and daily activities, and act accordingly.

The board of directors or executive committee must define their commitment to improving corporate value in their own words. This is a crucial step which sets the direction of their actions.

4) Building a capable team

After clarifying impediments to teamwork and the performance expected of the board of directors and executive committee, the fourth step is to form a capable team. Specific efforts to do this are described below.

(1) Canon

Canon Inc., a leading precision instruments maker, has two initiatives to prevent the maldistribution of information among board members and improve their mutual understanding.

The first initiative is a directors meeting at the head office, which is held before 8 o’clock every morning. All directors except for those on business trips must attend. This meeting helps the participants to timely exchange information, thus eliminating the maldistribution of information among them. While this is an unofficial meeting, it provides a good opportunity for directors to understand the views of the top management on various issues.

The second initiative is cross-divisional appointment of task force leaders. Canon appoints a director as the leader of a task force unconnected to his own specialty. For example, a director in charge of personnel affairs was appointed to unify product codes. These postings are expected to encourage reforms from a different viewpoint and improve mutual understanding among directors.

(2) A parts maker

This company provides all directors with the opportunity to act as top leader to accelerate decision-making. In particular, newly appointed directors are entrusted with special missions unrelated to their specialty to change their focus from optimizing their own division to optimizing the company as a whole. In addition, higher directors directly coach and support them, giving new directors advice on private and business problems as necessary.

(3) DISCO

In DISCO Corporation, the board members and presidents of group companies meet every month for a two-hour discussion on materializing the company’s philosophy and visions. The purpose of the meeting is to reinforce the qualitative business base through discussions among management members.

This meeting has continued for 15 years. Specific topics include periodical assessment and improvement of corporate philosophy and visions, recognition and solution of qualitative management issues including corporate climate and motivation, and improvement of the corporate culture (Figure 7).

Decisions made at the meeting are promptly reflected in various management policies and systems and announced in the group companies. This meeting is called a “pilot conference”, and it is managed by an outside consultant as a facilitator to prevent the positions of directors from disturbing open discussions.

Figure 7. Pilot conference of DISCO group

Source: Prepared by NRI based on DISCO IR materials and interviews Investors both in and outside Japan are concerned

about the low growth rate and profitability of Japanese companies. Japanese companies must address the demands of the market and reflect them in their decision-making, setting aside internal conflicts. To achieve this, the skills and capabilities of the team or group must be improved in addition to raising the skills of individual directors. The board of directors or committee must not be considered as a sanctuary in these reforms. Success depends on top management’s commitment to achieving reform.

Facilitator/Leader

(outside consultant)

Systematic formation, periodical assessment, and sustainable improvement of DISCO valuesRecognizing and solving qualitative management issuesSharing and improving organizational management skillsImproving corporate culture

Reinforcing qualitativebusiness base

Decisions are promptly reflected inoperations or management system

Presidents of group companies

Board members

May 2010


- 5 -

1. What is KPO?

As one form of business outsourcing, the knowledge process outsourcing (KPO) approach is widely used among enterprises in Europe and the United States. KPO, often called intellectual outsourcing in Japan, involves the gathering, processing, and advanced analysis of data.

2. Examples of KPO and its Providers

1) Examples of KPO KPO is primarily used in two business areas. One is

operations related to special research and analysis in financial industries. For example, KPO is used to perform some of the research and analysis tasks of securities analysts and quantitative analysts.

The second main area is operations of the business management and strategic planning departments. The fields covered by KPO are macro/micro market research, competitor research, intellectual property research, and financial planning. More recently, legal support services are becoming another area of KPO services. 2) KPO providers

These services are often provided from offshore hubs, particularly in India where such service providers are growing dramatically; the number of workers in the KPO business is estimated at 250,000 in India alone. Every company is still in its infancy as KPO services started around the year 2000; nevertheless, some major KPO vendors now have more than 2,000 employees, equal to the size of large companies in Japan.

3. Thriving KPO Market Overseas

1) Size of the KPO market Research by EVALUESERVE, which is a major

KPO vendor, indicates that the KPO market will be worth US$17 billion (1.5 trillion yen) in 2010. Of this, 70% of the services will be performed in India. This is a characteristic of the market.

Figure: Estimated KPO service market

0.7 1.1 1.62.4

3.6

5.3

8.0

12.0

0.60.8

1.1

1.5

2.1

2.8

3.8

5.0

0

2

4

6

8

10

12

14

16

18

2003 2004 2005 2006 2007 2008 2009 2010

1.31.9

2.73.9

5.6

8.1

11.8

17.0

0.7 1.1 1.62.4

3.6

5.3

8.0

12.0

0.60.8

1.1

1.5

2.1

2.8

3.8

5.0

0

2

4

6

8

10

12

14

16

18

2003 2004 2005 2006 2007 2008 2009 2010

1.31.9

2.73.9

5.6

8.1

11.8

17.0

(Unit: US$ billion)

(Year)

Other AreasIndia

Source: Estimated by NRI based on a press release of EVALUESERVE 2) Factors behind the growth of the KPO business

Three main factors behind the rapid growth of KPO are as follows.

(1) Use of a single language (English)

Looking at the sales components of KPO vendors, the majority of the KPO business is intended for companies in Europe and the United States, and most of the communication for the services is conducted in English. (2) Utilizing the time difference for faster response

The business hours in India or China, where most KPO businesses are located, start at the end of the working day in Europe and the United States, so outsourcing research and analysis work to people on the other side of the globe enables the work to be finished within 24 hours. Nowadays, some companies are establishing additional outsourcing bases such as in Romania and the Czech Republic in Eastern Europe or Chile in South America to respond 24/7 to global enterprises in any region. (3) Low cost services

KPO vendors generally win orders at about one-fifth of the price compared to fees for professional services offered by lawyers in Japan, Europe and the United States. The low price is a significant factor behind the rapid rise of KPO businesses in India and China. It is important to note, however, that KPO vendors are under intense pressure to improve their employee turnover rate as well as benefits, so their fees are expected to gradually rise.

KPO as a Means for Improving Productivity： Its Feasibility and Issues in the Japanese Market

Takao YAMAGUCHI, Senior Consultant Management Innovation Consulting Department, Nomura Research Institute, Ltd.

May 2010


- 6 -

4. Issues in the Japanese Market

1) Labor environment and problems in Japan In Japan, the issue of how to improve the

productivity of white-collar workers attracted attention during the structural depression in the 1990s following the bursting of the bubble economy; however, it has not yet been resolved. Japan still faces a major issue concerning business productivity. (1) Labor productivity

According to business productivity ranking surveyed by the International Institute for Management Development (IMD) in Switzerland, Japan’s productivity indicator has not improved in spite of its high GDP ranking. Also, according to an ILO survey, 40% of the total workforce in Japan work long hours, the second highest proportion in the world. (2) Diversified work style and continuity of quality

The rate of female contract workers to total employment was less than 40% in 1996, exceeded 50% in 2003, and has remained around 55% since then. This figure indicates that many organizations hire female contract workers for office clerk jobs as well as for supporting sales staff. In many cases, these contract workers are responsible for part of the business flow and have an important function that influences the operational quality. As a result, the quality of contract workers may influence the operational quality. KPO might help solve labor environment problems such as those noted above.

2) Difficulties in expanding in the Japanese market

However, the KPO approach has rarely been adopted in Japan to date; even the concept of KPO is not familiar to Japanese companies. While NRI estimates that the KPO market in Japan will reach 27 billion yen in 2011, Japan’s unique attitudes to work may prevent its spread. (1) Language barrier

The first concern is the language barrier. When outsourcing services such as advanced research/analysis as described above to overseas firms, translation between English and Japanese must be added and subtle nuances in Japanese might be difficult to correctly translate. Although KPO within Japan avoids this problem, the ordering party cannot enjoy substantial reductions in costs. (2) Vague separation of operations to be outsourced

In comparison with enterprises in Europe and the United States, Japanese companies assign each job not to individuals but to teams. Especially in the business planning area, team members depend on and support each other to accomplish tasks. Some people say that Japanese work together without explicit directions or communication. Teamwork may be effective for getting things done, but the field and content of business to outsource cannot be clearly identified.

(3) Method of fostering human resources in the planning area

To teach junior workers the work procedures and make them more aware of the quality of planning, job training by managers or senior associates is essential. However, such training sometimes assumes that subordinates and junior workers must perform massive amounts of monotonous tasks to obtain better knowledge and thinking capabilities. If this attitude persists, outsourcing for enhancing productivity will recede.

5. Needs for Bridge Companies

To overcome these problems, a knowledge center should be established to meditate between KPO vendors and Japanese enterprises. Such a center would not be a mere interpreter but provide certain added-value to satisfy customer needs. Specifically, mediating companies must develop a system where they not only outsource to KPO vendors operations such as swift preparation of proposals, customer and industry analyses, and M&A long lists, but also assess the quality of work and quickly deliver it to customers.

In addition, the business flow must be changed. Although it may seem difficult to find suitable operations among ad hoc tasks for KPO services, actually it is not. Although it varies among individuals, there are not many tasks in the planning process that cannot be outsourced. However, it needs considerable effort to change existing business processes to incorporate KPO. To enhance business productivity, the business flow must be changed.

Most Japanese enterprises in the global market inevitably compete on the quality offered to customers. To beat the global competitors, KPO may be introduced first in overseas offices to meet the requirements of service speed.

Meanwhile, due to the upgrading of information gathering infrastructure, development of information disclosure, and high mobility of human resources, it is extremely difficult for Japanese companies to maintain confidentiality and the uniqueness of their management strategy.

Although the operating rules and infrastructures built by Japanese workers have taken root through practice and significantly affect the execution of a company’s strategy, we believe it is time to review whether the business actually adds value.

Improving business quality might be placed as a core element of management strategy. The development of the KPO industry suggests that the quality and productivity of business are becoming significant differentiators to win amid fierce global competition.

May 2010


- 7 -

1. Evolution of Convenience Stores

1) Economic development While most retail businesses have been facing hard

times due to the prolonged economic recession, the convenience store industry is faring relatively well.

Convenience stores are a retail business of American origin and have grown consistently since first appearing in Japan in the 1970s. These days, the industry has grown to beat out the department store industry, which used to be known as the “King of retail businesses,” achieving the position of a mega-industry that fills a corner in the Japanese retail industry.

Figure1. Sales trends in the retail industry (Unit: trillion yen)

143.5141.5

139.4136.8

132.3 132.4133.7

135.1 135.3 135.1 135.5

14.014.0

15.916.316.616.8

14.214.314.414.413.3

7.7

7.4

9.2 9.0 8.8 8.6 8.3 8.1 7.9 7.8 7.8

7.2

7.9

7.47.3

5.5 6.1 6.5 6.7 6.8 7.0 7.1

115

120

125

130

135

140

145

150

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Bar

gra

ph: S

ales

tota

l of r

etai

l ind

ustry

4

6

8

10

12

14

16

18

Lin

e gr

aph:

Sal

es to

tal o

f ind

ivid

ual

busi

ness

cat

egor

ies

Commercial Sales Statistics (retail industry) SupermarketsDepartment stores Convenience stores

Supermarkets

Convenience stores

Department stores

Source: Commercial Sales Statistics and information provided by Japan Chain Stores Association, Japan Department Stores Association and Japan Franchise Association 2) Convenience stores serving as social infrastructure

In the process of business development, convenience stores have started offering services for crime prevention that include offering shelter for women at night and protecting lost children, as well as disaster response functions providing food and drink in times of disaster, in addition to public services on behalf of financial institutions or government agencies including easy access to ATMs and the payment of utility bills. As a result, convenience stores are now no longer just convenient shops, but are an integral part of our daily lives. If convenience stores were to disappear, in some areas people would have to go all the way to a branch office or a bank just to send something by courier, pay a utility bill or make a withdrawal.

As such, convenience stores play an important role in the daily lives of local residents while being small-scale stores based in small trade areas.

Accordingly, no one would deny that convenience stores are now positioned as social infrastructure.

2. Improving Careers through Daily Work

1) Essential skills for store operations Convenience stores are the most familiar type of

store in our daily lives and the customer service at such stores gives the impression of being simple, straightforward work that anybody could do. However, in reality, as the stores are operated by a small number of employees, each task does not have a particular person in charge, unlike in a department store or supermarket, which means that every worker is required to handle various tasks including merchandise displays, serving customers, bagging, store maintenance and cleaning.

Furthermore, it is necessary for convenience stores to sell higher margin goods in the limited store space and to minimize lost sales opportunities and waste from unsold items. In particular, ordering goods based on an accurate demand forecast is intellectual work requiring sophistication and precision. IT skills are also necessary for this order placement operation. There are some other additional tasks at convenience stores that have come about since they have started playing a role as social infrastructure. 2) Realizing store operations using unskilled workers

Although convenience store operations require various advanced skills, convenience stores have a high ratio of irregular workers (part-time employees). There are many stores in which all of the employees other than the owner are irregular workers. Under this aspect of store operations, franchise systems have been established so that any convenience store can provide customers with the same level of service.

Most convenience stores are owned by independent entrepreneurs who have joined a franchise chain and the franchisees are usually small-business owners. Through the use of the management expertise, goods and new services supplied by the convenience store franchiser, they have become successful in achieving modernization and improving efficiency and are continuing to grow.

By consolidating operation manuals and information systems, it is possible even for irregular workers to quickly learn the series of retail operations conducted at the store. For example, in respect to the previously mentioned order placement based on demand forecast, the franchiser collects purchase histories entered in

Human Resources Development of Convenience Stores： Human Resources Development Package to Foster Experts

Hiroyuki NOZAKI, Consultant Social System Consulting Department, Nomura Research Institute, Ltd.

May 2010


- 8 -

information terminals including GOTs (Graphic Order Terminals), portable terminals and the POS systems used at the store. The franchiser conducts scientific marketing in order to enhance the franchisee’s ordering accuracy and attempts to minimize lost sales opportunities due to a lack of stock or waste from overstocked items.

As noted above, convenience stores have established an operation package with standards for store operations and their supporting systems. Based on this package, unskilled workers are properly trained to become experts in a short time, forming the foundation for providing various services including public services. 3) Part-timers moving up the ladder

While store operations of convenience stores are standardized, there is no doubt that management fully depends on the quality of the employees in this changing market environment. Therefore, it is important to specifically state the skills required from workers and to focus on the development and enhancement of inadequate skills.

In fact, the Comprehensive Vocational Ability Evaluation System Development Committee of the Japan Vocational Ability Development Association devised vocational ability evaluation standards for store operations and store management in the convenience store industry, both of which require a high degree of professionalism. The committee also studies evaluation standards for vocational abilities acquired from part-time job experience in order to create guidelines for workers to form proper career paths and sets levels according to the relationships between posts and required abilities. Consequently, part-time work experience in a convenience store is objectively evaluated based on guideposts commonly shared with other industries. This is expected to lead workers to have wider opportunities for self-realization in the labor market.

Figure2. Image of career formation in the convenience store industry

Store owner

Mid-level employee

New employee

Store manager/Assistant manager

Experienced employee

External labor market

L1

L2

L3

L4Expanding a viewtoward store management

Contributing to an increase in sales

Increasing the quality and range of work

Operational Managerial

Employee image

Part-timeworkers

Permanentworkers

Source: Prepared by NRI based on Japan Vocational Ability Development Association, “Comprehensive Vocational Ability Evaluation System Development Committee Activities Report (Convenience store industry),” September 2007

3. Applying Human Resource Development Packages

1) Unique personnel training: Social contribution Convenience store operations require skills that are

more comprehensive and advanced than they look and have schemes that enable employees to acquire these skills in a short time. Based on this scheme, some convenience stores attempt unique personnel training.

One example is an internship program for elementary and junior high school students. Internship programs fill the gap between schools and communities, which will help students form a future career path or an image of the ideal adult lifestyle, assisting them to find their studies at school enlightening. This attempt started in the late 1990s and in 2007 was implemented in 9,667 public junior high schools, which is 95.8% of all 10,089 public junior high schools in Japan.

Some stores cooperate with local NPOs in an attempt to support young people including NEETs and shut-ins who lack the will to continue working by providing them with opportunities for employment and to reenter society. 2) Expectations for overseas expansion

The convenience store business model has established a scheme based on operational standards, enabling store operations using unskilled workers. In addition to this scheme, there are other possibilities for advancement in various aspects, including the improvement of efficiency per unit area, the enhancement of information systems for successful merchandising and appropriate operational advice based on sophisticated analyses provided by supervisors. Expertise on the Japanese convenience store industry is in high demand overseas.

The convenience store industry was originally imported from the U.S. and is now an internationally competitive, modern small retail business model developed in Japan that will be exported to grow and flourish overseas.

Figure3. Business deployment situation

of major convenience stores in Japan and Asia Image of career formation in the convenience store industry

12,1056,866

1,728

14,901

7,188

8,614 1,187

285

0

5,000

10,000

15,000

20,000

25,000

30,000

Seven-ElevenJapan

Lawson FamilyMart Ministop

Number of stores

Total in Japan

Total in Asia except Japan

Source: Prepared by NRI based on homepage of each convenience store company as of February 2009

May 2010


- 9 -

1. Changes in the Business Environment and Innovation

It is always true that innovation is the lifeblood of an organization. As business scholar and sociologist Peter F. Drucker pointed out, innovation is closely related to the business environment surrounding the organization wherein it is produced.

The business environment has changed significantly in the past quarter century. One major reason for this change is the advancement of information technology. IT, which has rapidly developed since the 1970s, overcame the geographic and time constraints imposed on organizations and individuals. After the 1990s and following the popularization of “Web 2.0,” a group of technologies including RSS and blogs, the Internet – which used to simply be a method of transmitting information – has now become positioned as a platform where users can exchange information and interact with each other. This IT advancement had a great influence on society and thus corporate management. These changes in the business environment and corporate management have also more of less affected the style of innovation in organizations and will be the major factor for promoting more changes in the future.

This article focuses on the method called crowdsourcing after an overview of past innovation and addresses a new style of innovation based on the method.

2. Transition in the Style of Innovation

Let us classify the conventional style of innovation into two major kinds, “Product-oriented” and “Market-oriented.”

Product-oriented innovation was popular when producers and suppliers had dominance over markets. Seeking the lifeblood of innovation in factories and laboratories, innovation in existing products or production systems was produced. Examples include the development of new products and redesigns1 of production lines.

As supply exceeds demand in the market, the importance of consumers and demanders increases and market-oriented innovation is produced. This regards

1 Although there is controversy over whether so-called “kaizen”

(improvement) activities are considered innovation or not, this article regards it as one kind of process innovation.

target markets as the lifeblood of innovation and produces innovation according to customer needs. New products created based on a thorough understanding of consumer needs after careful marketing research may fall into this category.

3. Crowdsourcing: A New Style of Innovation

The two kinds of innovation – product-oriented and market-oriented – are classified based on the perspective of which of the two sides, i.e., suppliers and demanders, has control over the market.

However, as mentioned earlier, the business environment has been significantly changing due to the advancement of IT. Furthermore, as a number of items flood the market, consumers have more choices. As a result, consumer needs have become diversified and small-scaled. A third kind of innovation has started to appear in response to these changes.

Case example: elephant design’s “cuusoo.com”

As a successful example of a business providing a new style of innovation, this section introduces a company called “ elephant design co., ltd. ” （http://www.cuusoo.com/）.

Elephant design offers a service that supports the production of innovation by connecting ideas from individual users and the companies commercializing them. Approximately 100,000 consumers, product designers and other individuals are registered on “cuusoo.com,” a site that the company operates. Users post ideas for new products that they feel are necessary in their daily lives on the site and other users see the ideas and propose improvements or offer additional suggestions about product design. Through these interactions, the original product idea becomes more refined.

By using “cuusoo.com,” companies can create more business possibilities including the effective utilization of their own materials and technologies and the development and customization of new products, as well as marketing and PR. Finally, the items that a certain number of users want to buy are actually commercialized.

The new items created through “cuusoo.com” are different from the two kinds of innovation described earlier. The feature of this new style of innovation is that it is created on the Internet, a virtual space, where the relationship between suppliers and consumers becomes something new. In this virtual space, a number of local interactions occur between manufacturers and users or among the users

A Scheme for Producing Innovation by External Human Resources －Possibilities of Crowdsourcing: Making Use of Group Intelligence outside the Organization

Masayuki TANAKA, Consultant Policy & Industry Consulting Department, Nomura Research Institute, Ltd.

May 2010


- 10 -

themselves, through which new products and services are created.

This style of innovation should be called “Emergence-oriented,” in other words, a new way of innovation centering on emergence.

Figure: Business model of elephant design

Makers

Material manufacturers/ Engineering firms

cuusoo.com

Marketing, PRProduce and administer recruiting sites

Invite application proposals for materialSeek opinions and suggestions

Customizing suggestionsApplication Comments/votes

OpinionsDesigners UsersRoyalties

Source: Prepared by NRI based on elephant design’s home page

The kind of business elephant design implements, which produces innovation based on the knowledge of a large, indefinite number of people inside and outside the organization that take care of the work companies would normally do, is called “Crowdsourcing.”

Though crowdsourcing is still quite new to the business world, there are a number of products on the market using this method. Personal computer operating system “Linux” and Internet encyclopedia “Wikipedia” are examples of crowdsourcing businesses partially managed by a large number of undefined public users around the world.

4. Possible Applications of Crowdsourcing

Crowdsourcing, a new style of innovation, has the potential to be used in various fields. It seems to be particularly useful in the public service field and in areas where global innovation is produced.

For example, tourist attractions in local areas used to be noncompetitive and complacent. However, it is possible for such endeavors to increase their marketability and position themselves apart from the rest in order to establish an edge over the competition by accepting other perspectives from people outside the organization. Crowdsourcing is expected to perform up to its potential in local areas where there are usually inadequate resources such as people, goods, capital and information.

There also is a chance for crowdsourcing to be useful when innovation is produced on a global scale. In fact, the aforementioned elephant design began a project called "DANISH INNOVATION PLATFORM" in collaboration with a Danish furniture maker in order to combine various ideas proposed by Japanese users and transform them into innovation. If a larger number of makers and users join the project, both the quality and quantity of innovation will be improved.

Needless to say, crowdsourcing is not perfect for every situation. For instance, it is unsuitable when being involved with a particular person's specific situation, such as building a house for an individual or providing medical treatment. To make the most of

crowdsourcing, it is also important to set an appropriate theme that can help users generate various ideas. Furthermore, we have to be careful about what kinds of users are sought and how any winners are rewarded once an idea is adopted.

5. Possibilities for Japan to Tap into Crowdsourcing

Political scientist Samuel P. Huntington pointed out in his work called “Japan's Choice in the 21st Century” that Japanese culture is sometimes difficult to understand for people in other countries, as it is an isolated civilization. Japanese thinker Tatsuru Uchida writes in his book “Nihon Henkyoron,” translated as “Japan, a remote country,” that things that do not fit into the Japanese national identity type can never really pull at the heartstrings of Japanese citizens. To put it the other way around, appealing ideas and feelings are hard to understand for people in other countries. This indicates that the unique form of identity a civilization has is difficult to understand.

These people suggest that the Japanese culture and the software and the hardware built upon it are highly unique compared with other countries around the world. Therefore, Japan may not be properly understood by other countries and admittedly, Japan may have some features that are hard for outsiders to understand. However, by establishing a system such as crowdsourcing, which provides opportunities for various users to satisfy their needs, the Japanese identity becomes easier to accept by those abroad. Consequently, Japan might be reevaluated as a treasure trove of information that creates new goods and services.

May 2010


- 11 -

1. Reviving Ambitions by Storytelling

1) Ambition In recent years, some Japanese companies have

become concerned by the decline in morale of their members. One reason is that management has focused on responding to external requirements such as returning profits to shareholders and pursuing CSR activities, rather than internal requirements such as what members want to do. Another is that companies which have thrived mainly in the Japanese market are now losing confidence due to the saturated domestic market and economic downturn. To overcome the situation, some Japanese companies are trying to strengthen the internal power derived from cherished corporate values for growing and expanding even amid the saturated market and economic downturn.

One example of these efforts is reviewing the purpose of their existence and goals, announcing it as the company’s vision both internally and externally, drawing up conduct guidelines and values as company’s WAY and sharing them among all members.

In this paper, the will to achieve an ideal, which is derived from long-cherished corporate values, is defined as ambition, and the approach to reviving ambitions, called storytelling, is described.

2) What is storytelling?

Storytelling is one of the arts of passing on visions or thoughts to others; it has long been used to pass on the history and customs of communities from generation to generation. More recently, storytelling has been attracting attention as a means of unifying and motivating members in an organization through sharing concepts such as corporate philosophy and visions, as well as tacit knowledge including values and feelings, among leaders and members.

For example, when a team leader wants to convey the importance of the customer’s viewpoint to his staff, he may recount a personal experience of realizing its importance, along with actual operating performance, customer analysis data, and so forth. By adding emotional information based on personal values and feelings, the staff can better understand the facts, analytical results and other logical information.

2. Approaches to Storytelling

1) Lecture-type storytelling Traditionally, storytelling has been used mainly by

top management to convey its visions to employees through lectures. In this approach, stories are used to enhance the power of the organization by unifying members having diverse values due to different employment statuses, gender, and cultural backgrounds. For example, a manager may tell a story about a specific case that conveys the vision or policy that the manager wishes to pass on to all employees. A story with a good plot and powerful emotions is impressive, understandable, and memorable to employees.

This type of storytelling is advantageous in that top management can rapidly communicate their visions to all employees, indicating the direction the company should follow. However, it is not easy to convey a message of equal significance to all employees holding different positions and thoughts. In addition, it is difficult for top management to continue delivering messages until the visions become firmly fixed in the minds of all employees because the opportunities for direct contact between top management and employees are generally limited. Sympathy and understanding tend to be temporary.

2) Interactive-type storytelling

Unlike the lecture-type approach which is liable to be one-way communication, the interactive-type storytelling approach allows members to communicate with each other.

Stories are used to help members having different values to share a sense of unity by recognizing their respective values while finding eye-openers from stories of others. It is easy to find common factors among individual stories, so this approach helps rediscover the DNA of the organization, or some common values shared among the members of the organization. This sympathy toward common values strengthens trust in the organization and a sense of belonging, while also creating a sense of unity among the participants and thus solidifying the foundation for sharing an integrated, companywide ambition.

In addition, mutual feedback of findings may enable one person’s awareness to spread to another, creating a chain of awareness. This is another advantage of the interactive-type storytelling approach.

Meanwhile, different from the lecture-type storytelling approach by top management, the interpretation of values or stories is left to individuals,

Storytelling for Reviving Ambitions

Teppei HOSHINO, Consultant Management Consulting Department, Nomura Research Institute, Ltd.

May 2010


- 12 -

which may differ from management’s expectations.

Figure: Comparison between lecture-type storytelling and interactive-type storytelling

Top management

Employees

Top management

Middle management

Middle management

Employee EmployeeEmployee Employee

[Interactive type][Lecture type]

One-way

Interactive (Bidirectional)

3. Reviving Ambitions

This section describes the types of organizations that need to revive ambitions, as well as the important points in planning a revival. 1) Anticipated situation

When founded, most successful companies clearly set values that they wish to cherish and ambitions to be achieved. Many of their employees impartially share these ambitions and generally communicate with each other based on these values and ambitions. Over time, however, even these successful companies tend to over-emphasize numerical performance. Then, as tasks are divided, employees have less responsibility and lose a companywide perspective. As a result, the company often forgets the ambitious vision it set forth when founded and loses the internal power to achieve the goal.

Japanese companies are suffering from a saturated market and economic downturn. Under these circumstances, the position of sluggish business shifts downward compared with growing or developing areas. A sluggish business is often regarded as a cash cow for growing areas. As a result, workers in such a division easily lose self-confidence and pride because it is difficult to remain motivated and find meaning in their work.

In some organizations, the important values and objectives of the business or work become vague, the morale of employees then declines and the company loses the internal power to achieve the ambitions. Such organizations need to check and verify their cherished values, and to rediscover and revitalize ambitions.

2) Developing storytelling techniques to revive ambition

When using storytelling approaches to expand the values and ambitions throughout the organization, it is critical to involve the middle management because they directly interact with employees and influence the entire company. The lecture-type and interactive-type approaches should be combined to best use their respective advantages.

Top management must repeatedly give lectures to middle management on the company’s ambitions at every opportunity including internal events, sectional/departmental meetings, and in-house magazines. Repeating the message will help to clearly show and align the direction the company is aiming for, and help middle management feel confident in pursuing those ambitions.

However, merely lecture-type storytelling by top management is not enough to fix the values in the minds of middle management and to revive ambitions. The interactive-type storytelling, where middle management thinks about the values and ambitions, is an effective approach, making them sympathize with the direction defined by top management and take the initiative. Sympathy for ambitions is achieved by rediscovering the company’s ambitions for oneself, rather than being told by others. Workshops may help them to think about values that they have never considered seriously and to rediscover the values in other participants’ stories about successes and failures.

In planning an overall program to help middle management rediscover the values, sympathize with the direction and vision set forth by top management, and work hard to revive the company’s ambitions, the differences in lecture-type and interactive-type storytelling techniques must be considered. Then, the top management’s messages and workshop programs must be carefully designed to ensure that the stories in those techniques work synergistically, and the balance between them must be reviewed constantly.

This paper has described two storytelling approaches,

focusing on the important role of middle management in reviving organizational ambitions. Some companies have already made efforts to strengthen the internal power derived from cherished corporate values for growing and expanding. More companies are expected to examine the purpose of their existence and goals, rather than being swayed by short-term performance amid the saturated market and economic downturn.

May 2010

Copyright ⓒ2010 Nomura Research Institute, Ltd. All rights reserved. No part of this publication may be reproduced in any form without the prior written consent of NRI

- 13 -

CCoolluummnn

What the Media Can Tell You about People III: TV Programs Bosses Watch, Magazines their Employees Read

Yoshiteru MAEKAWA, Consultant, Service Industry Consulting Department

■ What Bookshelves Tell Us A book store called “Matsumaru Honpo” created by

editor Seigou Matsuoka opened in bookseller Maruzen’s flagship store in Marunouchi in October 2009. Checking it out, the store made an overwhelming impression with its shelves crammed full of a wide range of books. One unique attempt was the section called

“Honke(means books at home),” which tries to recreate the libraries of celebrities. When I visited the store, the books in Shiseido’s honorary chairman Yoshiharu Fukuhara’s collection were on display. I remember feeling fascinated by the library of the renowned top executive. Not recommended books, but a book collection. This

is what is so unique about the idea. In the first place, recommended books are meant to be introduced to other people, meaning that they are like wearing your Sunday best. On the other hand, a book collection is like casual clothing, from which you can expect to see more of the owner’s real personality. Of course, the books on the shelves for this section were probably carefully selected to attract visitors. Even so, the idea of displaying the books in a famous person’s library was still very interesting.

■ Directors Love Watching Golf on TV What kinds of TV programs do directors – people

who are famous yet closer to us in some ways – usually like? Unfortunately, there is scarce information regarding what kind of people specifically read which type of books due to the sheer volume of books that have been published. Instead, let’s take a look at data on the “TV programs directors frequently watch” and “magazines directors regularly read,” both of which show their areas of interest through a rather informal “casual clothing” state of mind. Table 1 was prepared according to data from the

November to December 2009 Insight Signal Survey, a survey that is conducted by NRI on a regular basis. TV programs that ranked high on the list are watched frequently by people at a certain management level, rather than by average viewers. The directors column has many golf programs filling

eight out of the top ten programs in Table 1. On the other hand, the columns for department heads and section managers have no golf programs, meaning that directors in particular like golf programs. The two shows other than golf programs in the directors column are both news shows. For a comparison, let’s take a look at the programs

frequently watched by department heads. Many of them are news shows. The column for section managers has more news shows. In fact, the people

who watch news on TV the most are section managers.

■ Different Levels, Different Business Magazines Data showing the names of the magazines people at

each level of management read are arranged in Table 2. The number one magazine directors frequently read in particular is business magazine “Nikkei Business.” “Pen” and “LEON,” so-called lifestyle magazines, took second place and fourth place, respectively. This may indicate that directors care about lifestyles as well as business. Both of the department heads and section managers

columns have a business magazine in number one. However, they aren’t the same one. “R25,” widely-read among those in the below section manager category, may be considered a business magazine in a broad sense. In particular, “Nikkei Business” has major differences in readership rates depending on the reader’s management level (directors: 8.1%, department heads: 13.9%, section managers: 5.4%, below section manager: 2.3%). Although business magazines usually deal with similar topics, people prefer different magazines depending on their management level.

■ Facilitating Communication between People

at Different Management Levels through Common Interests in TV Programs and Magazines

Some people might say that they have no interest in the TV programs and magazines their superiors or subordinates like. However, it is a fact that human beings are social creatures. It is nice to see other people looking interested in the same things you are interested in. It is always difficult for people from different

generations to share common interests. In some companies that temporarily held back on the recruitment of new employees, however, it seems that relationships between teams from different generations or those between superiors and subordinates have resulted. The important thing in building mutual understanding is to look at things from the other person's professional perspective. As a first step, becoming interested in the TV

programs and magazines one’s superiors or subordinates like may open up smooth communication at work. Even if things don’t go that well, just talking about what kind of TV programs and magazines the other person likes will show that you are interested in them.

May 2010

Copyright ⓒ2010 Nomura Research Institute, Ltd. All rights reserved. No part of this publication may be reproduced in any form without the prior written consent of NRI

- 14 -

Table 1. TV programs that people at each management level watch and their ratings Management

level Directors Department heads Section managers Below section manager

Number of samples 107 118 263 1,254

1 Golf Japan Series JT Cup16.4%

SUNDAY MORNING32.9%

Houdou Station20.4%

Mezamashi TV (till 7 a.m.)13.7%

2 SUNDAY PROJECT10.9%

Japan Championship Series39.0%


DRAGON BALL KAI10.4%

3Mitsui Sumitomo VISATaiheiyo Masters 2009

12.1%

Houdou Station24.2%

News MORNING SATELLITE4.4%


4Japan LPGA Tour

Championship Ricoh Cup11.2%

Monta Mino's Asazuba!(till 7 a.m.)

9.3%

SUNDAY MORNING22.5%

DRAMA24 Jyouou Virgin3.6%

5Casio World Open Golf Tour

200911.8%

Yumeno Tobira5.7%

NEWS235.1%

Otameshika!15.4%

6Ito En Ladies GolfTournament 2009

8.4%

Tohkue Ikitai4.4%

World Business Satellite8.8%

Downtown's 'This is no taskfor kids!!'

9.7%

7 The Championship byLEXUS

Shinsou Houdou Bankisha!15.1%

YAJIUMA PLUS (till 7 a.m.)6.1%

Minnano KEIBA5.2%

8 Wakeup! Plus12.5%

Wakeup! Plus11.3%

Syutsubotsu! AdomachikkuTengoku11.8%

Ametalk!16.1%

9Dunlop Phoenix Tournament

20099.8%

Shoten12.9%

Monta Mino's Asazuba! (till 7 a.m.)

6.4%

SPORT!3.9%

10Mizuno Classic 2009 in

Iseshima7.5%

Nichiyou Gekijo31.3%

The Sunday NEXT8.7%

Mecha-Mecha Iketeru!18.0%

Note: Prepared by NRI based on Insight Signal Survey (Period: November 1 to December 26, 2009; Respondents: 3,000 men and women living in the Kanto region; Method: Internet questionnaires) Top 10 listed for those with statistically significant difference in average viewer rating between all viewers and people at each management level.

Table 2. Magazines that people at each management level read and their readership rates Management

level Directors Department heads Section managers Below section manager

Number of samples 107 118 263 1,254

1 Nikkei Business8.1%

Nikkei Business13.9%

Weekly Diamond6.6%

R259.9%

2 Pen3.0%

Weekly Bunshun9.9%

DIME5.3%

Weekly Young Magazine6.4%

3 Big Comic Original8.9%

Weekly POST7.5%

Weekly Gendai5.9%

Weekly Young Jump7.7%

4 LEON3.3%

Weekly Diamond6.9%

Nikkei Business5.4%

FRIDAY5.5%

5 ENGINE1.9%

Weekly Gendai7.1%

Weekly POST5.1%

Weekly Playboy3.8%

6 Big Comic5.4%

Motor Magazine2.5%

Nikkei PC3.1%

FLASH3.5%

7 Weekly Bunshun7.1%

Digital Camera Magazine2.5%

Weekly Toyo Keizai3.4%

Weekly ASCII4.8%

8 Weekly Gendai5.7%

AERA6.8%

Nikkei Veritas2.1%

L254.5%

9 Weekly Toyo Keizai4.1%

Weekly Shincho6.7%

Big Comic4.3%

SPA!4.5%

10 Weekly ASCII6.7%

Nikkei TRENDY6.4%

Gainer2.1%

GOODS PRESS1.8%

Note: Prepared by NRI based on Insight Signal Survey (For details, see Table 1.) Top 10 listed for those with statistically significant difference in average readership rates between all readerships and people at each management level.

Nomura Research Institute, Ltd. (NRI) is a top-tier management consultancy firm headquartered in Japan. With more than 500 consultants, NRI focuses on a wide variety of industries including financial services, technology, energy, retail, telecommunications, industrial goods, and consumer goods. The nature of the work is diverse and includes corporate strategy, operations management, globalization, post merger integration, organizational design, human resources and knowledge management. Founded as a think-tank in 1965, NRI also provides consulting services for public sectors with social policies and their implementation. NRI are committed to creating value for our clients that delivers tangible change and customized solutions, not simply ideas and frameworks. That makes NRI distinct. Back Numbers March 2010: Changes to Come 1. Cross-Industry Collaboration and Competition in the Smart Grid Field 2. Reforms in Personal Money Transfer Services through the Payment Service Act 3. Enterprise-based Foundations under Pressure to Redefine their Activities 4. Potential of Asset Based Lending (ABL) 5. Creating Business Opportunities by Making Cities More Compact

January 2010: Outlook for 2010 1. Building an Aggressive Group Management Structure 2. Entry into Overseas Markets by Transportation Service Companies 3. "Consumers Becoming Upper-class in Mind Only" 4. Long-Term National Strategies Needed to Boost Japan’s Economy 5. The Form Next-generation Social Systems Should Take

November 2009: Crossover of Corporate Resources 1. New Approaches to the Downstream Industry for Expanding Eco-businesses Overseas 2. Countermeasures against Increasing Resource Procurement Risks 3. Key to Success in the International BtoC EC Business for Asia 4. The Post Financial Crisis Middle Eastern Economy and the Potential of Saudi Arabia 5. Implications of Russia's Accession to WTO for Japanese Companies 6. [Column] What the Media Can Tell You about People II: Investing Abroad September 2009: Seeking New Tactics 1. A New Financial Policy: Utilizing Infrastructure Funds and their Influence on the Economy 2. Boosting Competitiveness by Acquiring Failed Companies 3. Business Structure for Securing Profit in Emerging Country Markets 4. New Marketing and Sales Strategy for Luxury Goods 5. Scenario for Innovation of Contactless Services July 2009: Getting Ready for a Great Leap Forward 1. The Role of Next Generation Shared Services 2. How to Bridge the Gap in Risk Awareness between Management and Employees in the Field 3. "Business Risk Map" Risk Management Infrastructure 4. Management Plans Facing Unprecedented Downward Adjustment 5. Hotel Business Strategy after the Lehman Shock 6. Improving Corporate Competitiveness through Advertising Cost Optimization 7. [Column] News: Time for a Change May 2009: New industries and technologies that boost Japanese competitiveness 1. HEV Market Growing through Cost Reduction 2. The Impact of the Emergence of Internet Life Insurance 3. Generic Drugs: Changes in the Pharmaceutical Industry 4. How Japanese PV Manufacturers can Remain Viable 5. The Expanding Market for Service Robots

NRI Knowledge Insight May 2010 Issue Vol.10 Editorial Office Consulting Business Planning Department, Consulting Division, Nomura Research Institute, Ltd. Marunouchi Kitaguchi Bldg., 1-6-5 Marunouchi, Chiyoda-ku, Tokyo 100-0005, Japan TEL: 03-5533-2631 FAX: 03-5533-2414 E-mail: [email protected] Please address your comments/requests regarding this publication to the Editorial Office. This publication may also be viewed on the company’s website (http://www.nri.co.jp/english/opinion/k_insight/). Whilst the contents of this publication has been prepared based on highly reliable sources, Nomura Research Institute, Ltd., assumes no responsibility for its accuracy or completeness. The information herein has been deemed accurate as of the date on which it was prepared and may have changed since then. Copyright ©2010 Nomura Research Institute, Ltd. All rights reserved. No part of this publication may be reproduced in any form without the prior written consent of NRI

Documents

Turnaround in Organizational Strategy and Human · PDF fileSince the turn of the 21st century, ... Turnaround in Organizational Strategy and Human Resources Strategy . May 2010