German enterprises are similar to those businesses in Jin Merchant introduced in Part 2. In this part, we will present the small and medium-sized enterprises in Germany.
Referring to German business, people may first think about Siemens, Mercedes, BMW and Volkswagen and other well-known multi-national corporations. However, whoever serves as the key position of the nation’s economy are those SMEs. Those multi-national corporations in Germany are indifferent from those in other countries, which have close tie to the CCP. In this Part, we are referring to those small and medium-sized enterprises, so called uncrowned champions. They usually have employees less than 500 people, make significant contribution to German economy, create 60% of total jobs national wide, and also possess world’s leading position (e.g. top three) within their own domain. For example, a German business with 20 employees manufactures the rings used for parachutes, and the German company monopolizes the supply all over the world. In case any parachutes manufacturers purchase the same product from other suppliers with lower quality may eventually lead to a severe accident. That such a 20-employee business can serve as No. 1 in its domain for such a long run is due to its deep technical content. The family owned German business contains lot of wisdom to be learned. Such wisdom is similar to what was possessed by those businesses in Jin Merchant. German business set their products and services at high profile but the entrepreneurs themselves at low profile. In consequence, German business has built up more than 2,300 world-class brands; rather we cannot name even one of the entrepreneurs on the back.
What German entrepreneurs do is to maximize value of the brand but not attach their own names to the brand they created. The business management philosophy in Germany could be more valuable than that in the US. US entrepreneurs often attach their names with the brands, which usually do not last as long as German brands do. On average, those US companies listed on “Fortune 500” exist less than 40 years compared with 200 years of those German companies.
The other modern business model is INAMORI KAZUO, entrepreneur and the founder of Kyocera and KDDI. KDDI is the 2nd to the largest telecommunication companies in Japan. “At the age of 77, INAMORI became the CEO of Japan Airlines when it entered bankruptcy protection on January 19, 2010, and led the air carrier through its restructuring, eventually allowing the company to re-list on the Tokyo Stock Exchange in November 2012.”“In 1984, INAMORI made a personal endowment to establish the non-profit INAMORI Foundation, and became the president until June 2019, after which his title was changed to founder. At the same time, he created the Kyoto Prize, an international award presented by the INAMORI Foundation each November to recognize individuals and groups worldwide who have made outstanding contributions to the betterment of the global community and humankind.” The ultimate purpose of INAMORI Foundation is to help the SMEs learn and apply INAMORI KAZUO’s business management philosophy. His publishing has been translated into six languages. INAMORI did emphasize that running the business is neither for the purpose of money making nor the entrepreneurs themselves, but for the wellness of employees.
Overall, the four models presented so far have the following overlaps:
- Great business and ranks as the top within its own domain.
- Entrepreneurs possess great ethics.
- Entrepreneurs have built up their own business management philosophy and system.
Original opinion article by Himalaya Vancouver G-farm – 2020/12/22