Japanese Firms Learning Art of Image Polishing : Corporate Charity Is Alien Concept, but Companies Are Adapting to U.S. Rules
In 1985, Hitachi Ltd. raised more than a few eyebrows when it announced the establishment of a $20-million charitable foundation in the United States.
For one thing, such a large gift from a Japanese company had little precedent. For another, it came at a time when Hitachi’s image had been sullied by dumping and industrial espionage scandals.
“It left a sour taste in my mouth,” says John C. Gibbons, who in 1983 had supervised the successful prosecution of Hitachi for conspiracy to transport IBM trade secrets to Japan. Hitachi insists it had no ulterior motive in starting the foundation.
Few would argue that Japanese companies have learned the science of selling in America. But as Hitachi’s experience with its foundation illustrates, the Japanese still have a long way to go before they master the far more subtle art of “corporate social responsibility.”
To be sure, satchels of cash help. But appearances can be equally important. To get it right, a company cannot be seen as blatantly trying to buy good will or curry favor. The key to winning this game is a Western concept called “enlightened self-interest,” which remains alien to most Japanese.
“Charity and philanthropy as practiced in America come from the Judeo-Christian tradition of noblesse oblige,” notes Hiroshi Kamura, director of the Japan Center for International Exchange, a public policy organization in New York. “Japan is a Buddhist nation. Our concept of charity is quite different.”
Moreover, “charitable contributions are not tax-deductible in Japan,” adds William J. Barnes, president of the Japan Economic Institute of America in Washington. “The government takes on most welfare functions, and companies take care of their own with lifetime employment.”
But the Japanese are nothing if not adaptable. And Japanese companies “are beginning to realize that they have to be accepted as good corporate citizens,” Kamura says. In light of trade and other tensions between the United States and Japan, “they have been forced to become more sophisticated.”
Effort by United Way
In some cases, Japanese companies are being helped along by cash-hungry charitable organizations. This year, for example, the United Way of Los Angeles has established a special outreach program to target the often-insular Japanese business community.
Working with the local Japan Business Assn., United Way plans to print a brochure in Japanese and host a reception for Japanese business leaders. “We want them to have a better understanding of both the United Way and the U.S. concept of a broad, ethnically inclusive community,” says Sirel Forster, regional vice president.
Mayumi Sakai, deputy executive director of the 550-member association, says she welcomes the program. “Unless someone explains this to our members, most of them will not know,” she says.
‘Needs to Hurt’
Sakai says she is struck by how American children are instilled with Western charitable values so early in life. “In Japan, where I grew up, children would never be asked to go out and raise money for their schools or for scouting,” she says. “The money comes from the government or parents.”
The cultural gap, along with Japan’s increasing corporate presence in America, has led to the emergence of a small army of consultants who promise to smooth Japanese entrance into the philanthropic mainstream.
“I tell my clients that whatever they do needs to hurt a little bit for it to be considered truly socially responsible,” says Jack Whitehouse. His firm, Los Angeles-based International Public Relations, represents the Japanese steel industry, Fuji Bank and the local Consul General.
“I have been a voice in the wilderness for corporate social responsibility among Japanese companies for 20 years,” adds Don Steele, whose San Francisco-based International Business Interface advises Toshiba, New Otani Hotels and Nikko Securities. “For too many Japanese, the term ‘public relations’ means nothing more than ‘product publicity.’ ”
Steele notes, too, that the “zero profile” maintained by Japanesemultinationals has proven useful in countries where Japanese enterprises compete against American and European companies. In Iran, for example, the Islamic Revolution affected Japanese business interests much less than Western companies, which had adopted high social profiles under the shah and donated regularly to his favorite charities.
“Japan’s zero profile is probably quite beneficial in countries where political strife exists,” Steele concludes.
In any case, there are signs that the Japanese are learning how to play the philanthropic game in the United States. Ten Japanese companies paid $100,000 each to “adopt” cable cars during the 1984 restoration of San Francisco’s landmark system.
And more and more Japanese companies are setting up corporate giving programs and charitable foundations--before scandal strikes. In September, for example, Toyota donated $10 million to establish the Toyota USA Foundation to “celebrate” the company’s 30th anniversary in this country.
Income from the foundation’s endowment will be used for grants to promote education, health and human services, culture and art, and community and urban affairs. Matsushita (whose products are sold under the Panasonic and Technics labels) and American Honda set up similar $10-million foundations here in 1984.
Perhaps inevitably, the foundations generate suspicion. “I have actually been asked, ‘What is your hidden agenda?’ ” says Sophie Sa, executive director of the Matsushita Foundation. With the foundation’s focus on pre-collegiate education, she continues, “people sometimes ask, ‘Are the Japanese trying to take over our schools?’ ”
Self-Interest Avoided
Sa says she patiently explains to such questioners that the foundation “is an American foundation, with an American board of directors.” And while 15% of the foundation’s grants are earmarked toward Japanese studies, Sa notes that nobody has ever turned down her money.
“We go to great lengths to avoid that any of our grants are tainted by self-interest,” adds Kathy Carey, manager of the American Honda Foundation. “No Pacific Rim studies, no Japanese language, culture or arts.”
On the same grounds, the foundation also recently turned down an application from the National Highway Traffic Safety Administration, which had sought funds to publish a booklet encouraging children to use seat belts.
Instead, the foundation gives money to such programs as the Imagination Workshop, a group of actors who teach institutionalized mental patients to produce, direct and act in their own plays.
“Things like this show that the Americanization of Japanese business is well under way,” says Kamura of the Japan Center for International Exchange.
