The influence of Zen Buddhism on Japanese business model

(3)Significance of creativity.

Inter Seiko Co., Ltd.

Established in 1944. Capital- JPY60 million; number of employees - 130. Manufacturer of machine and equipment.

An active (1)creative and positive frame of mind.

(2)(3)Philosophy of co-existence, co-prosperity and mutual trust.

(4)Environmental protection.

(1)Significance of creativity.

(2)Maintenance of human relationships.

(3)Organization of the working process in the Zen monastery (brotherhood).

(4)Fыryы.

Justneo Co., Ltd.

Established in 2015. Capital - JPY10 million; number of employees - 13. Export sales.

Corporate principles: (1)“valuing the customer as utmost priority.” (2)Long-term vision.

(1)Self-abandonment and strive to attain the state of egolessness.

(2)Focus on process rather than on result.

Kyoka Shokuhin Co., Ltd.

Established in 1966. Capital - JPY10 million; number of employees - 76. Producer of processed food.

(1)Continuous improvement.

(2)Alter depending on circumstances.

(1)Significance of creativity.

(2)Significance of circumstances and affirmation of inconstant nature of reality ? flexibility.

Marui & Co., Ltd.

Established in 1971. Capital - JPY43,420,000. Manufacturing and sales of scientific instruments and testing apparatus.

No values and corporate business principles on the website.

Miraial Co., Ltd.

Founded in 1968. Capital stock - JPY1,111 million; number of employees - 331. Manufacturing of semiconductor related products.

Corporate Philosophy: (1)contribution to the society development with respect and care for people and (2)environment; pursuance of development.

Company Ethics Charter: (3)customer satisfaction and trust; (4)safe and comfortable working atmosphere.

(1)(3)Self-abandonment and strive to attain the state of egolessness.

(2)Fыryы.

(4)Maintenance of human relationships.

Mitsuboshi Chemical Co., Ltd.

Established in 1953. Capital - JPY90 million. Manufacture and sales of fine chemicals.

Code of Conduct: (1)environmental protection, (2)(3)trust of clients, (4)care of employees.

(1)Fыryы.

(2)Self-abandonment and strive to attain the state of egolessness.

(3)(4)Maintenance of human relationships.

Owner Hooks Co., Ltd.

Established in 1968. Capital - JPY22 million; number of employees - 73. Manufacturing of fishing gear.

Treasure communication with staff and thoughts of appreciation.

Maintenance of human relationships.

Premium Group

Established in 2007. Capital ? JPY180,848 million; number of employees (consolidated) - 323. Financial services.

(1)Feeling of gratitude towards people around us. (2)Flexible creative thinking and readiness to pose challenges.

(3)Sense of unification and team work. (4)Strong will to change and (5)continuous action create financial innovation.

(1)(3)Maintenance of human relationships.

(2)Significance of creativity and circumstances.

(3)Organization of the working process in the Zen monastery (brotherhood).

(4)Zen as a religion of will.

(5)Perception of right actions' performance as a continual process without “stopping” at occurring changes.

Sagami Chemical Metal Co., Ltd.

Established in 1968. Capital - JPY10 million; number of employees - 30. Manufacturer and distributor of rare-earth magnets.

(1)Continuous improvement of operations' efficiency and pursuance of human development.

Corporate Philosophy - (2)pursuance of tangible and intangible happiness of employees.

(1)Significance of creativity.

(2)Maintenance of human relationships ? subordinates should be loyal to their managers and managers should take care of their subordinates.

Storia Co., Ltd.

Established in 1974. Capital - JPY10 million; number of employees - 65. Hotel management and administration.

(1)Customer-oriented.

(2)Create stable and secure life of employees.

(3)Environmental protection.

(1)(2)Self-abandonment and strive to attain the state of egolessness.

(2)Maintenance of human relations (harmony).

(3)Fыryы.

Taisei Kogyo Co., Ltd.

Established in 1957. Capital - JPY45 million; number of employees - 190. Manufacturers of oil filters and heat exchangers.

Environmental protection.

Fыryы.

Tokyo Menki Co., Ltd.

Established in 1998. Capital - JPY10 million; number of employees - 30. Manufacture of noodles making machines.

(1)Building machine one by one. (2)Development of skills gaining experience. (3)To act from a sense of responsibility and be customer oriented.

(1)Meditation upon only one koan ? sequential culture ? perform one task at a time rather than in parallel.

(2)Emphasis on observation and learning (truth and essential ideas can be grasped only by means of experience).

(4)Self-abandonment and strive to attain the state of egolessness.

Transportations Co., Ltd.

Established 2005. Capital - JPY20 million; number of employees - 5. Logistics.

The core value of company's philosophy is (1)human relation.

Company instructions: (2)constant innovation and challenging, perception of a (3)tough situation as a beginning of chance. (4)Care about environment.

(1)Maintenance of human relationships.

(2)Significance of creativity.

(3)Affirmative attitude ? acceptance of facts and accumulation of resources to face new circumstances.

(4) Fыryы.

Japanese companies strive to maintain high ethical standards and apply them to daily work and even to situations when there are no clear rules. Having described working values and principles of 32 large, medium and small enterprises we must conclude that Zen Buddhism has significantly influenced on their contents. The most common ones both among large enterprises and SMEs are maintenance of harmonious human relationships within the company as well as between company and society (24 companies), significance of creativity as a source of constant self-challenging and self-improvement (23 companies), self-abandonment reflected in customer orientation and prioritizing of social concerns (19 companies) and environmental protection (13 companies). There is a big difference in numbers of companies highlighting these principles and remaining ones (following widespread principle is significance of circumstances (7 companies)). We must also underline that principles mentioned only ones (affirmative attitude of Zen Buddhism, sequentialism, strive to get rid of attachments and emphasize on intuitive understanding of reality) reflect more profound ideas and notions of Buddhism.

Nevertheless, comparing scope of values and principles maintained by large enterprises and SMEs, we can state that they are frequently depicted in codes of conduct, reports and other official documents of large companies rather than small and medium ones. One remarkable fact deserving notice at this point is that sources on three of 16 SMEs do not contain any information about their corporate philosophy or managerial principles. In comparison to large enterprises, combinations of Zen principles incorporated into business culture of SMEs are less numerous and diversified. For instance, we have not identified linkages between their business guidelines and such precepts as significance of transparency and right actions/mindsets, self-control, focus on observation, role of manager who as well as Zen master is expected to encourage his subordinates to strive for self-improvement and understanding of the meaning of their work by means of dialogues, consultations and individual approach towards each worker. It is of interest to note in this connection that the only principle prevailing among small and medium enterprises in comparison to large companies is emphasize on organization of the working process based on co-existence and cooperation.

One would like to make several assumptions in regards of findings described above. It must be admitted that various corporate values and principles are highlighted by large enterprises due to the fact they trace roots of foundations in XVIII and XIX centuries. Principles enshrined at that time were seen as receipts for prosperity and growth, hence, were highly valued and transferred from generation to generation, being slightly modernized in order to fulfill requirements of new time. This attitude towards principle guidelines of economic operations remained until nowadays. At the same time, most of SMEs were established after the Second World War and were perceived as potential sources for economic growth of Japan that strived to catch-up with the advanced economies of European countries. It might have been supposed that in conditions of increasing influence from the side of American and European governments and Japan's willingness to become competitive on the global market, newly established enterprises were partially guided by foreign business models that lack such an emphasize on ethical standards of working process. Furthermore, we can guess that most of principles accepted from Zen Buddhism were seen as something natural and implicit by that time and, consequently, new enterprisers did not see any need to write them down as guiding principles for their workers. Furthermore, we have reason to believe that due to the fact SMEs are less steady in the context of economic instability, this does not allow them to develop more ramified and elaborate system of corporate values, constantly failing into serious management crisis.

To sum up, there is some evidence to suggest that Zen Buddhism has influenced significantly on formation of modern Japanese companies' corporate philosophy and managerial principles. This phenomenon, being characteristic for enterprises that vary in terms of capital and number of employees, however, is more prevalent for large ones. This fact indicates the need to study socio-economic backgrounds of large companies' foundation, which is the task accomplished in two previous chapters.

Conclusion

The chapter of conclusion reveals results obtained within the framework of conducted research. The analysis shows that cultural specificity of Zen Buddhism reflects strongly on main features of Japanese management culture, defining long-term planning, participative management, trust and interdependence, emphasize on teamwork and cooperation as traditional characteristics of Japanese style management.

1. Scope and tendency of Buddhist monks' engagement in economic operations.

The main objective of the first chapter was to identify the scope and tendency of Buddhist monks' engagement in economic operations. The main results can be presented in the table:

Table 7. Buddhist monks' engagement in economic operations

Historical period	Economic operations
Nara (710-794)	Buddhist temples served as good suppliers to the market, determined the content of labor duties of peasants; possessed lands and farmsteads.
Heian period (794-1185)	Became patrons of small landowners, who passed to the temples land ownership.
Kamakura period (1185-1333)	Markets nearby large monasteries. New type of settlements in temples that turned into markets at set days. Moneylending. Buddhist temples were allowed to transfer their lands to other temples or private persons.
Muromachi period (1336-1600)	Introduced progressive forms of agriculture (bridges, channels, dams). Customs gates. Control craftsmen corporations. Had ties with foreign merchants.

These facts give rise to important conclusions that since VIII century and throughout the feudal period of Japanese history, Buddhist temples became to operate actively as economic agents. It is worth to emphasize that it was exactly Buddhist priesthood which was among the first moneylenders and parties to contracts of sale and purchase. Being at the origins, Buddhist temples laid down the principal guidelines of these operations, providing a framework for implementation of bilateral and multilateral cooperation activities in the field of business. Nevertheless, in the beginning of the XVII century changing living conditions in Japan forced both Buddhist monks and samurai, who embraced Zen Buddhism as framework of ideas allowing them to reconcile with their social duties, to alter their habitual foundations and traditions. By that time, when samurai began to open their first shops and began to be engaged in their first economic operations, Buddhism has already had centuries of experience in the sphere of commodity and money relations. Hence, guiding principles of labor organization established by Buddhist monks were accepted and modified by samurai. This continuity was illustrated in the Chapter 2 on examples of Mitsui and Sumitomo houses' charters.

1. Influence of Zen Buddhism on traditional elements of Japanese management.

The main statement to be proved in the first paragraph of Chapter 3 was that corporate principles, values and instructions reflect specificities of Zen worldview. As a result of the analysis made following linkages between Zen Buddhism and Japanese managerial culture were revealed:

1) Sequentialism: tradition to meditate upon only one koan > performance of one task at a time rather than in parallel;

2) Respect towards Nature: fыryы (enjoyment and respect of Nature) > a) mono-no aware or contemplation of the outside world; > b) tender care of Nature and strive for unselfish coexistence with it;

3) Self-abandonment: strive to reach state of egolessness and necessity to enlighten not only yourself but others > a) companies' encouragement of improvement and development of each member of society; b) customer orientation; c) companies' activities are guided by common interests and concerns; d) subsuming of individual interests to the collective expectations to such an extent that it leads to the emergence of extreme cultural cohesion;

4) Simplicity as one of the core elements of the Spirit of Eternal Loneliness > simplicity and accuracy in the working style;

5) The main task of Zen doctrine is to give to human being a right to teach oneself on his own only pointing to the right direction > a) Japanese managers are expected to provide their subordinates with conditions in which they can develop. In order to facilitate personal growth, managers are supposed to have skills encouraging subordinates to understand the meaning of work and goals and to develop independent thought, achieving results on their own; > b) supervisory character of Japanese senior management;

6) Zen master possesses individual approach towards his disciples > manager takes into account personal abilities of subordinates and works individually with each of them;

7) Zen as a religion of will > maintenance of will as a spirit enabling overcoming of obstacles and challenges;

8) Meaning of work: work as a spiritual discipline leading to the achievement of Nirvana > a) business related values encourage workers to be more diligent and loyal; > b) promotion of multi-skilled workers (genba shugi) and “personal reshuffle” (jinji ido) reflecting monks' readiness to undertake any work;

9) Philosophy of social order embraced by Buddhism from Confucianism > a) hierarchical structure of Japanese companies and professional conduct of employees, depending on position and qualification category; > b) sense of duty or giri;

10) Significance of harmonious human relationships: tolerance, spiritual equality, loyalty, respect > a) community characteristics (i.e. preferences of team rewards); > b) bottom-up decision-making process aiming at consensus-building and maintenance of harmony in the company (ringi seido); > c) reciprocity: the employee is expected to be loyal towards his/her senior manager, while the latter take care of his/her working conditions; > d) relations with customers and business partners (aftersales personal visits, gifts giving); > e) shuudan ishiki or group consensus; > f) amae or “dependence on the benevolence of others”.

11) The Eightfold Part of Righteous living which highlights right speech, right thought, right actions, right understanding, right mindfulness and concentration > a) actions of the manager ought to correspond to his/her position, company's business model, value and strategy; > b) content of speech should be determined by situational context; > c) mindfulness in job performance; > d) seishin kiyoku or spiritual education in companies aiming at encouragement of the right attitude of employees;

12) Acceptance of inconstant nature of reality > a) flexibility as capability of companies and managers to adopt and respond to constantly changing living conditions; > b) situational behavior of Japanese managers; > c) vague formulations of Japanese contracts;

13) Words: according to Zen Buddhism true and sincere attitude cannot be expressed through words > a) vague formulations of Japanese contracts; > b) not verbose and argumentative behavior during negotiations; > c) relationships between two parties can be perceived trust-based in case if they can predict another party's thoughts and actions without words;

14) Affirmative attitude towards all existing things preventing seeing the world in dualistic manner > acceptance of facts and accumulation of time and resources to face new circumstances and adapt business strategies and corporate goals to them;

15) Significance of silence > a) being not verbose and argumentative during negotiations; > b) gaining of expanded context from a surrounding environment; > c) silence as a way to release the tension and enable parties to continue negotiations;

16) Self-control and self-discipline (one's own state of mind is less significant than the state of society) > ability to conceal personal reaction, emotions and feelings in order to maintain harmony in society;

17) Avoidance of categorical statements and “going beyond the opposites” as method used by Zen masters during personal dialogues with disciples > avoiding saying “No” or “Yes”;

18) Emphasis on observation and learning (truth and essential ideas can be grasped only by means of experience) > a) development of product using information from customers; > b) necessity of trainings (coaching and OJT); > c) kaizen as a day-to-day accumulation of results which facilitates higher levels of productivity and quality; > d) HoRenSo as a problem solving system, composing of Ho (hokoku, or report), Ren (renraku, or contact) and So (sodan, or consult);

19) Spirit of creativity > encouragement of employees to undertake constant changes and challenges, thus, transcending ourselves and creating sources of improvement. Stimulation of creative thinking might be facilitated as a result of coaching;

20) Transparency of mind as one of the core elements of the Spirit of Eternal Loneliness > maintenance of transparency of business operations;

21) Sanzen, personal dialogues between Zen master and his disciples aiming at estimation of the progress of reaching self-enlightenment and adjustment or specifying of the path of spiritual development > sodan of HoRenSo and personal consultations between managers and subordinates;

22) Repetition (reiteration of words will echo in mind with the new understanding) > mastering technique by constant repetition that might lead to the development of innovative solutions;

23) Metaphors, analogies, questions used by Zen masters and managers during private consultations, trainings and coaching;

24) Focus on process rather than result > a) long-term orientation of Japanese companies seeking for long-term stability and prosperity and readiness to accept short-term loses; > b) humility and frugality allowing saving money for further development;

25) Working-style: Zen monks living in one room in the Meditation Hall were expected to encourage brotherhood and be economically-minded > organization of work in open-space, teamwork;

26) Enlightenment as result of direct intuitive understanding > observation drives intuition and leads to self-improvement;

27) According to Zen, the main reason of suffering is possession of attachments, hence, we should strive to get free from various attachments including ones related to our past experience or words (teachings, concepts) > employees should not be bound past experience and common knowledge;

28) Perception of right actions' performance as a continual process without “stopping” at occurring changes > continuous action creates financial innovation.

Having described 28 linkages between Zen Buddhism and traditional elements of Japanese management, we must conclude in general that Zen to a large extent has influenced on formation of core principles of Japanese-style management that for a long period of time were seen as recipes for business global success and even now are perceived as potential keys for future achievements.

2. Reflection of Zen Buddhism principles on corporate values of modern Japanese companies.

On the basis of analysis of corporate values and principles of 32 large, medium and small enterprises we have come to the conclusion that the most common ones embraced by both large enterprises and SMEs are maintenance of harmonious human relationships within the company as well as between company and society; significance of creativity as a source of constant self-challenging and self-improvement; self-abandonment reflected in customer orientation and prioritizing of social concerns; and environmental protection. However, in comparison to large enterprises, combinations of Zen principles incorporated into business culture of SMEs are less numerous and diversified. This might be explained by timeframes and historical contexts of their formation and establishment. Large enterprises, majority of which were founded in XVIII and XIX centuries, firmly adhere to principles enshrined at that time, since they have been seen as receipts for prosperity and growth. At the same time, most of SMEs were established after the Second World War and were perceived as potential sources for economic growth of Japan that strived to catch-up with the advanced economies of European countries. It might have been supposed that in conditions of increasing influence from the side of American and European governments and Japan's willingness to become competitive on the global market, newly established enterprises were partially guided by foreign business models that lack such an emphasize on ethical standards of working process.

We may now summarize by saying that Zen Buddhism has influenced significantly on formation of modern Japanese companies' corporate philosophy and managerial principles.

3. Issues to resolve.

Traditional Japanese management culture over the last decades has gone through a series of changes on account of recession, alterations in Japanese society, increased competition from abroad and other factors. Due to these changes in economic environment, Japanese companies faced with many challenges, particularly concerning surplus of employees, appearance of madogiwazoku and low probability of additional hierarchical promotion (Ference et al.1977, p. 602). Therefore, companies had to cut labor costs, which led to decrease in worker morale and reassessment of traditional values of managerial practices. In the long term, traditional values (collective recognition for a job well done, advancement, co-operation within groups, good relations with line-managers and immediate superiors, employment security) were completed by emerging features including earnings, quality of life, individual recognition and personal satisfaction for a job well done (Firkola, P. 2006, pp. 121-122; Jackson, K. 2004, pp. 32-33; Saegusa, T. 2008, pp. 111-116).

In other words, Japanese management culture is currently in the process of reconsideration of its traditional values and practices due to globalization, development of information and communication technologies. We may illustrate it using an example of learning model and the role of abstraction.

Japanese learning model is known as PDCA (Plan-Do-Check-Act/Adjust) or Deming Cycle, developed by Edward W. Deming. Recently it has been frequently criticized for the lack of the level of abstraction that makes it impossible to generalize the quality improvement process to other contexts.

It is worth to note in this connection that absence of abstraction in the traditional learning model of Japanese companies might be related to the Zen's attitude towards abstraction, generalization and conceptualization. Zen way of expressing the truth refuses abstraction and generalization and consists in the concreteness and vividness of expressions. Abstract and generalized ideas as well as concepts are regarded of no value in contrast to ideas generated from personal experience (Barrett, W. 1956, p. 115):

You people still conceive of Mind …as something to be studied in the way that one studies a piece of categorical knowledge, or as a concept - any of these definitions is sufficient to throw you beck into the endless round of birth and death [The Zen Teaching of Huang Po, p, 117].

However, Japanese companies are currently suggested to refuse from PDCA model and adopt learning model developed by David A. Kolb that comprises such an element as abstract conceptualization (AC) of data, collected via observation, into logical theories. According to this model, abstract conceptualization has significant value as involves generalization of obtained data to other contexts, on the basis of which it becomes feasible to develop theories applicable to several processes (Norio, K. 2015, pp. 71-72; Kolb, D. 1976, p. 22).

Nevertheless, while Japanese companies turn to foreign managerial practices and experiences trying to resolve emerged problems, European and American companies as Google Inc. and Apple Inc. encourage their employees to use contemplative practices of Zen meditation aiming at self-development. Such practices are believed to enable managers to make sounder managerial and business decisions (Didier, A. 2016).

Nonetheless, changing face of Japanese management and question of Zen integration into European and American management cultures are topics that should be addressed in separate studies.

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