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Mechanism of humanistic leadership for success: lessons from Konosuke

Matsushita

Article in Cross Cultural & Strategic Management · July 2020

DOI: 10.1108/CCSM-01-2020-0022

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Mechanism of humanistic Humanistic

leadership for
leadership for success: lessons success

from Konosuke Matsushita

Kaori Ono 627
Graduate School of Commerce, Waseda University, Tokyo, Japan, and
Received 31 January 2020
Jusuke J.J. Ikegami Revised 31 May 2020
Waseda Business School, Waseda University, Tokyo, Japan 21 June 2020
Accepted 21 June 2020

Abstract
Purpose – This study contributes to the construction of a theory on humanistic leadership in the context of
Japanese culture. Although the Japanese management system has been described as human-oriented, there has
been limited research on this subject, especially regarding top leaders. This case study focuses on Konosuke
Matsushita, the founder of Matsushita Electric (now Panasonic), who devoted his life as a businessperson to
investigating human nature. The authors examined how the humanistic approach influenced his beliefs and
behaviors, as well as his company’s performance. The authors then show how current employees at Panasonic
have implemented and interpreted his philosophy.
Design/methodology/approach – This research is a qualitative case study. Data were gathered from
transcriptions of archived recordings, interviews and Internet documents. They were then coded for analyses.
Findings – The findings show how humanistic leadership can succeed via seven behaviors: building a
company philosophy aimed at the prosperity of society and the well-being of people, being aware of one’s own
weaknesses, listening to others, improving oneself, developing people, respecting people and making a profit
for society.
Originality/value – The study identifies the behavioral aspects of humanistic leadership for building a
leadership theory and provides insight into how Matsushita’s leadership characteristics and behaviors are
connected to Japanese cultural values.
Keywords Humanistic leadership, Company philosophy, Konosuke Matsushita, Japanese business
executives, Cultural values, Japanese management
Paper type Research paper

Introduction
The theory of humanistic leadership (which focuses on respecting people as holistic human
beings, improving themselves while developing people and taking care of all stakeholders),
while incomplete, is attracting increasing academic interest due to the global prevalence in
uncertainty. The humanistic view from a business perspective has been employed to address
problems such as the recent financial crisis, increasing social inequity, the worldwide spread
of terrorism and the consequences of climate change (Pirson and Lawrence, 2010).
This study examines the famous Japanese businessman, Konosuke Matsushita, founder
of Matsushita Electric (now Panasonic), to contribute to the development of new leadership
theory. Compared to the capitalist system in Western companies (which is centered on
money), humans are the most important resources in Japanese companies (Itami, 1987).
However, although most researchers agree that the Japanese management style accords
importance to people, few studies of Japanese leadership examine the context of human-
oriented management. Studies on business executives’ leadership traits are especially limited.
Studies of middle managers (Nonaka and Takeuchi, 1995) and the Gemba [1] (Clark and
Cross Cultural & Strategic
Fujimoto, 1991; Koike, 2005) (considered as strengths of Japanese organizations) have long Management
dominated the review of Japanese companies. Vol. 27 No. 4, 2020
pp. 627-644
We identify the humanistic beliefs and behaviors of Konosuke Matsushita, who carefully © Emerald Publishing Limited
2059-5794
guided his company to become one of the largest in the world through his beliefs. Under his DOI 10.1108/CCSM-01-2020-0022
CCSM leadership, the company’s mission was to contribute to the progress and development of
27,4 society and the well-being of people to develop honorable human beings. We also discuss the
Japanese cultural values associated with his leadership practices and how his beliefs continue
to inspire present-day employees.
The results of the model are encouraging; they show not only humanistic behaviors but
also a mechanism of coexistence between profit and humanistic practices. Moreover, the
study presents a new aspect of humanistic leadership, rooted in Japanese traditional values:
628 listening to others to “collect wisdom” and respect Wa (harmony). In Japanese, Wa (harmony,
cooperation or a tranquil situation) refers to the behavior of engaging in open discussions,
regardless of status, for decision-making (MLIT, 2019). These leadership practices, rooted in
local values, contribute to the development of humanistic leadership theory through an
indigenous lens.

Konosuke Matsushita: coexistence and coprosperity

Konosuke Matsushita became an apprentice at the age of nine. Later in life, he would talk about
how his experiences during this apprenticeship taught him the essentials of business and
formed the foundation for his beliefs. An example that inspired him to become a humanistic
leader was when he learned that both himself and customers could benefit if he were to exercise
wisdom by being selfless (PHP S
oken, 1992). In those days, when a customer wished to
purchase tobacco, an errand boy would be sent each time to fetch it. After having visited a
tobacco shop several times, Matsushita realized he could purchase a pack and get an extra
packet at a discount. This situation meant that the customer did not have to wait, and he could
make a profit. However, his peers were envious of his success, and his master instructed him to
stop it. This experience taught him that selfishness was bad (Watanabe, 2019). The thought
developed into one of his core beliefs, as captured by the four-character idiom “co-existence and
co–prosperity,” which means that everyone lives and works within the same commune.
After an apprenticeship in a bicycle shop at age 15, he became an apprentice whose task
was to install wiring in homes. The experience of visiting homes and encountering various
customers was a good opportunity for him to gain better insight into human beings. In the
electric company, even as he was steadily promoted, he searched for a challenging but
rewarding job. He left the company following a health problem and a series of rejections from
his boss regarding his new product proposals.
With two employees, his wife and her younger brother, he founded Matsushita Electric
Housewares Manufacturing Works (later changed to Matsushita Electric Industrial Co., Ltd.
in 1935) in 1918. His first products were new models of attachment plugs and two-way plug
sockets (PHP Institute, Inc., 2019a). The number of employees increased rapidly with
increasing sales. Moreover, he organized a Hoichi Kai (company association) with all 28
employees to enhance their benefit packages as well as the Wa (harmony) among them. He
believed that respecting Wa (harmony) in the traditional Japanese spirit was essential for
providing a comfortable working environment for employees, drawing from his experiences
during his apprenticeship (PHP Institute, Inc., 2019b; PHP S
oken, 1992).
In 1929, he announced the Basic Management Objectives and the Company Creed, which
set forth the basic principle of the company. It encouraged both his employees and himself to
do good work as the company developed steadily in this period (PHP S
oken, 1991). In 1932, he
declared the social mission of the company (banish poverty, bring happiness to people’s lives
and make this world a better place) to cap the final piece of the puzzle in his business
development. He announced that May 5 was the foundation day, and 1932 was the first year
of the 250 years required to complete this mission. He shared a sense of solidarity with his
employees, who empathized with his declaration. He also allowed them to speak on stage as
well (PHP S
oken, 1992). Despite being drafted over a century ago, the Basic Management
Objectives and the Company Creed continue to be recited by all present-day Panasonic Humanistic
employees in early morning or evening meetings. leadership for
Furthermore, Matsushita’s zeal for developing honorable talent pushed him to proclaim
that the development of people was the second mission of the company (PHP S
oken, 1991).
success
Thus, he established several schools during his lifetime for not only his employees but also
others. His first school was founded in 1934 to produce work-ready store employees. However,
it was discontinued in 1945 due to reforms in the educational system (PHP S
oken, 1992).
Nevertheless, he did not give up. He re-established a boarding school in 1960, which produced 629
1,428 graduates until 1973 (PHP S
oken, 1992). His enthusiasm for developing people resulted
in founding a school for successors of National shops (now Panasonic shop) in 1970; more than
4,900 students have graduated since its inception (Panasonic Consumer Marketing Co. Ltd.,
2019). His beliefs regarding developing a person of character remained throughout his life.
His interrupted search for prosperity, peace and happiness resumed with the
establishment of an organization called the Peace and Happiness through Prosperity
(PHP) Institute in 1946. Given the strong desire for a better future for everyone, he explored
human nature in particular, believing that humans can realize prosperity, peace and
happiness (PHP S
oken, 1991).
After successfully achieving the company’s five-year plan to quadruple total sales in 1961,
he stepped down as president and became the chairman. At this point, he attained an
international reputation of being a gifted businessperson. He appeared on the cover of TIME
magazine in 1962, as one of the most successful Japanese entrepreneurs at the time. His
leadership success resulted from his humanistic approach to management. He said, “Is it real
happiness only to get status and honor . . .? I never think so” (PHP S
oken, 1992, vol. 29, p. 287).
He also said, “If the activities of our company are not helping society prosper, there is no value
to the existence of our business” (PHP S
oken, 1992, vol. 22, p. 241). In 1964, LIFE magazine
introduced him as a “top industrialist,” “the biggest money-maker,” “philosopher,” “magazine
publisher” and “best-selling author” (Panasonic Corporation, 2019). He also became known
around the world for being a philosopher on human welfare.
In his twilight years, his humanistic leadership accelerated outside his company, beyond his
position as chairman of the Matsushita Electric. To develop future leaders who could serve
Japan and the world, he invested a lot of his own money into establishing foundations, as well
as the Matsushita Institute of Government and Management (MIGM), in 1979. In the same year,
he accepted an invitation to visit China from the then Deputy Prime Minister, Deng Xiaoping,
who had toured the Matsushita Electric in the previous year. Since then, Matsushita spared no
effort to assist China’s modernization efforts. Thus, his activities expanded overseas.
In recognition of his distinguished services over many years, he received awards not only
in Japan but also worldwide: Holland, Brazil, Belgium, Malaysia and Spain. From the
University of Maryland and Pacific University in the United States, he received honorary
doctorates (PHP Institute, Inc., 2019c). In 1989, Konosuke Matsushita, who was called the
“God of Management” in Japan, passed away after devoting his life to the happiness of human
beings and the prosperity of society.
Although more than 30 years have passed since his death, he remains highly popular, and
business people regularly read his books for the leadership insights they provide. His books
have been translated into many foreign languages such as English, Chinese, Korean, Spanish
and Portuguese, and his museum in Osaka attracts foreign visitors as well. In Japan, many
admirers of Matsushita have written about his life and management approach.

Methods
Konosuke Matsushita was selected for this study because he exemplifies a type of leadership
that respects people as holistic human beings, develops people while improving oneself and
CCSM cares for all stakeholders while striving to pursue the common good. Moreover, Matsushita is
27,4 considered the “Father of Humanistic Management in Japan.” Guided by his beliefs in “the
progress and development of society and the well-being of people” and “co-existence and co–
prosperity,” which are rooted in Japanese cultural values, Matsushita succeeded in creating
the Panasonic Corporation and making it a global brand that still stands competitive.

630 Data collection

We collected data from a body of work named “Collected Sayings of Konosuke Matsushita,”
composed of 45 volumes covering his assertions in early or evening meetings with his
employees, annual planning meetings of the company, company events and conferences for
entrepreneurs. These books also include the interviews he had at conferences and
presentations/talks at various occasions. Primary texts published as books are transcribed
from his taped discourses and interviews. Since his passing, the survival of and access to
these documents are critical (Yates, 2014). Thus, to eliminate bias caused by other people’s
interpretation, we excluded books and articles about him from the analysis of his leadership
and management style; they are used only as supplementary data.
Specifically, the archival and second data we collected are from the following three sources:
(1) biographical data from the appendix of “Collected Sayings of Konosuke Matsushita,
Volume 45” and the PHP home page; (2) stories of Konosuke Matsushita from books by PHP
researchers; and (3) a history of Konosuke Matsushita on Panasonic’s home page.
We also conducted a semi-structured interview with seven managers and employees in
Panasonic, including two from the human resource department. The interviews with the two
HR managers lasted an hour and the purpose was to find out how they learned and
interpreted Matsushita’s philosophy. The interviews with the five members of the sales team
from Panasonic’s B2C and B2B businesses employees lasted 15–30-minutes and questions
were on how the learning of Matsushita philosophy influenced them. All the interviews were
tape recorded after obtaining the consent of the interviewees and transcribed afterward for
analyses.

Data analysis
We first explored the data for evidence of Konosuke Matsushita’s beliefs, leadership and
management from the book “Collected Sayings of Konosuke Matsushita.” To do that, we
focused mainly on his talks within the company and those with entrepreneurs. An
investigation of his speeches on official occasions made it clear that his utterances and
behaviors were strongly linked to his basic beliefs, which subsequently became the
company’s philosophy.
We then developed an overall chronology of the evolution of the company philosophy.
This chronology lays out the relationship between the events in Matsushita’s life and the
creation or modification of his philosophies. After having a clear overall picture, we explored
in greater detail the data as contained in various volumes of the “Collected Sayings of
Konosuke Matsushita.” We used Atlas.ti to analyze them and categoried the behaviors into
seven types (Saldana, 2016). The process helped us better understand Matsushita’s
leadership attributes and behaviors as a top leader.
Finally, we analyzed the transcriptions of the interviews we conducted to understand
current practices and how employees interpret his philosophy at Panasonic.

Mechanism of Matsushita’s humanistic leadership

Konosuke Matsushita is an ideal humanistic leader who demonstrated humanistic leadership
behaviors as follows: (1) building a company philosophy aimed at the prosperity of society
and the well-being of people, (2) being aware of one’s own weaknesses, (3) listening to others, Humanistic
(4) improving oneself, (5) developing people, (6) respecting people and (7) making a profit for leadership for
society. In this section, the authors explain each of these behaviors with examples to support
his humanistic traits. Moreover, they show how these behaviors are associated with each
success
other and function together as a mechanism to realize the missions of the company (Figure 1).

Building a company philosophy aimed at the prosperity of society and the well-being of people 631
A key role of a good leader is to direct a company. However, a humanistic leader must define
the mission of the company, considering all the stakeholders in society. Matsushita
established the Basic Management Objectives, which stated that the mission of the company
was to conduct business activities to contribute to the development of society and the well-
being of the people, without considering company profits first. He also set up the Company
Creed, which expressed the combined efforts of each employee to achieve the progress and
development of society. This was the beginning of his company philosophy, which succeeded
in unifying his 300–400 employees at the time. This philosophy has supported the company
for more than 100 years (PHP S
oken, 1991).
After launching the Basic Management Objectives, he felt that something was missing in
furthering the development of his business, although it had grown steadily. At that time, an
acquaintance strongly recommended that he should visit a religious group. Even though he
had no religious intention of becoming a believer, he was compelled to accept the invitation
and visited the headquarters of the religious group. There, he was stunned by the sight of
believers working cheerfully with the noble spirit of service, even at the height of the
depression. Inspired by this sight, he realized that the religion had a mission to save people by
providing spiritual support, which gave him clarity about the true mission of industrialists: to
improve people’s lives by providing material support (PHP S
oken, 1992). He explained,
The mission of a manufacturer is to overcome poverty by producing an abundant supply of goods.
Even though water can be considered a product, no one objects if a passerby drinks from a roadside
tap. That is because the supply of water is plentiful, and its price is low. Our mission as a

Building a company philosophy aimed at the prosperity of society and the well-being of people

The company is public institution

Employees are borrowed from the public
Its mission is to ensure the prosperity of society

Being aware of one’s

own weaknesses

Respecting people
fairness, trust,
Listening to others Improving oneself Developing people
taking care of
people

Figure 1.
Making a profit for society Conceptual model
CCSM manufacturer is to create material abundance by providing goods as plentifully and inexpensively as
tap water. This is how we can banish poverty, bring happiness to people’s lives, and make this world
27,4 a better place (Panasonic Corporation, 2019).
Thus, the company philosophy of caring for society was clearly established. This declaration
brought a sense of unity among his employees.
In 1933, he defined the “Five Principles” of conduct to enhance the company philosophy,
632 which employees were expected to follow. The company philosophy comprised the Basic
Management Objectives, the Company Creed and the Five Principles of conduct (Table 1).
Since then, the company philosophy has been recited at morning or evening meetings.
Matsushita invested effort and time to convey this philosophy to all his employees.

Being aware of one’s own weaknesses

The starting point of humanistic leadership is to be aware of one’s own weaknesses. When
Matsushita started his business career in the store, where the hibachi brazier was produced
and sold, he was just nine years old. He was forced to leave elementary school in the middle of
his studies due to his father’s failed business (PHP Institute, Inc., 2019a). Aware of his
disadvantages, he recognized that he had neither an education nor good health. He confessed
he had to delegate jobs and trust people (PHP S
oken, 1991). From the outset of his new
business that he started with his wife and brother-in-law, they experienced a continuous
process of trial and error due to their lack of expertise and knowledge. The behavior that
helped Matsushita the most during this critical period was asking others to share their
knowledge with him. Throughout his leadership journey, he listened to other people and
collected their wisdom. Eventually, he stepped down from the position of president because
he recognized his limitations. He stated the following:
The number of employees in Matsushita Electric is now 30,000. Apart from that, we have more than
100 affiliate companies; I must handle these too. However, the president is one person. I know too well
that the job of the president is very hard. It is not good for the company that I, whose physical energy,
youth, cheer, and knowledge have been falling into decay, stick to the position of the president
forever. It’s not good for the employees, nor for our many clients; therefore, I resign as president (PHP
S
oken, 1992, vol. 32, p. 236).

Listening to others
The authors confirmed from Matsushita’s sayings (or aphorisms) that he had spent a sizable
amount of time listening to others. He sought opinions of the Gemba, and when he could not
understand new technologies, he turned to younger technical engineers. He fully understood
that he could not run the company by himself and believed that decisions made to prevent
errors should not be based solely on his wisdom (PHP S
oken, 1991). He called this behavior
“collecting wisdom,” which became one of his famous phrases. To collect wisdom, he
mentioned the importance of Wa, which made it possible to collect wisdom and enhance this
behavior (PHP S
oken, 1992). During a table talk in 1970, he said: “I try to listen to the voices of
shopkeepers at the end of the distribution channel as much as possible, then I learn from
talking with them, and I can build a sense of intimacy” (PHP S
oken, 1991, vol. 14, p. 85). He
was quite open to obtaining knowledge from people, such as employees and customers. When
he collected wisdom from others, he tried to remain humble, which enabled him to absorb new
knowledge and continue to improve himself (PHP S
oken, 1991).
He also created an environment where his employees could openly voice their opinions
and proposals. During early morning or evening meetings in 1939, he said to his employees:
What I’m thinking most deeply about is whether you work cheerfully every day. . . Please think about
how you can work cheerfully, each of you, by yourself, and immediately make a proposal if you find
 Company
Humanistic
Event Date Philosphy leadership for
success
Self-reflection on company 1929 Basic Management Considering the harmony between
direction Objectives profit and social justice, we will devote
ourselves to the developmentof
national industry, thereby enhancing
the progress and development of 633
society and the well-being of people
through our business activities
Company Creed Progress and development can be
realized only through the combined
efforts and accord of each employee of
our company. Losing the ego, we
pledge to perform our shop duties in a
spirit of yielding toeach other
Visit to religious group May Declaration of The mission of a manufacturer is to
5,1932 mission overcome poverty by ensuring an
abundant supply of goods. Even
though water can be considered a
product, no one objects if a passerby
drinks from a roadside tap. That is
because the supply of water is plentiful
and its price is low. Our mission as a
manufacturer is to create material
abundance by providing goods as
plentifully and inexpensively as tap
water. This is how we can banish
poverty, bring happiness to people’s
lives and make this world a better place
Owner’s address Matsushita Electric Company was
founded in 1918. . .Matsushita sets this
day as the Foundation Day of the
company
HQ relocation to Kadoma 1933 Five Business Contribution to Society, Fairness and
Principles Honesty, Cooperation and Team Spirit,
Untiring Effort for Improvement and
Courtesy
1937 Seven Business Contribution to Society, Fairness and
Principles revised Honesty, Cooperation and Team Spirit,
Untiring Effort for Improvement,
Courtesy and Humility, Adaptability
and Gratitude
After World War II, Matsushita 1946 Basic Management Recognizing our responsibilities as
witnessed the devastation of land Objectives revised industrialists, we will devote ourselves
and lack of daily. The Matsushita to the progress and development of
family was included in Zaibatsu society and the well-being of people
family grouping and Matsushita through our business activities,
was no longer allowed to work for thereby enhancing the quality of life
the company by the US occupation throughout the world
army’s General Headquarters Company Creed Progress and development can be
(GHQ) after World War II revised realized only through the combined
efforts and cooperation of each
employee of our company. United in Table 1.
spirit, we pledge to perform our The evolution of
corporate duties with dedication, Matsushita’s company
diligence and integrity philosophy
CCSM how to do it. . . If you are dissatisfied with the explanations about the rejection of your proposal from
your boss or if you have a good idea, please directly tell me or your supervisor without any hesitation.
27,4 I deeply hope that you make it a habit to work cheerfully for the company and for yourself (PHP
S
oken, 1992, vol. 29, pp. 214–215).
Another example of Matsushita’s humanistic leadership is when he appointed four
department chiefs to take over his responsibilities during an organizational reform. He
started to organize a weekly meeting with them and noticed there were fewer mistakes in his
634 own decision-making as a result of collecting wisdom from his chiefs. Thus, product shortage
was resolved, quality improved and the results improved (PHP S
oken, 1992). His practice of
listening to others enabled his employees to be proactive and the company to perform better.

Improving oneself
Humanistic leaders are also described as constantly working toward self-improvement
(Fu et al., 2020). Matsushita was this kind of leader. At the age of 18, he enrolled in a night
school because he had not gotten an academic education ever since he was nine years old.
However, he dropped out due to the lack of skills in writing and dictation in Kanji (Chinese
characters) (Watanabe, 2019). He acquired the knowledge and skills necessary to run his
business from experience. He later recalled how he had learned about social situations and
people’s mindsets while visiting customers as an employee of the Osaka Electric Light
Company (PHP S
oken, 1991).
When he became a business manager, he tried to learn from customers and educate
himself more because nobody within the company could (PHP S
oken, 1991). One day, he
pondered about success. He concluded that, for a business person, to achieve initial company
objectives or prosperity would be just one aspect of success. Since he had still not been
prepared for managing any situation, he had not yet become a successful person. He then set
his heart on improving himself spiritually (PHP S
oken, 1992).
His activities in PHP, which he founded to explore a way to prosperity, peace and
happiness, led to his spiritual training. He stated that he got the idea of setting up the PHP
from the countless hardships he had endured. He had trained himself to bear with adverse
circumstances, and this process led him to feel that he was becoming a respectable person.
(PHP S
oken, 1991). In PHP, he actively engaged in dialogues with others, which enabled him
to learn from, as well as develop, people.
He often said, “educate oneself,” to his employees because he believed people could become
better by not just reflecting on themselves but by remembering to improve themselves. He
never abandoned his efforts to improve himself.

Developing people
Matsushita used to tell his employees, “when you’re asked what Matsushita Electric
manufactures, you say the company produces people.” This is one of his famous quotes,
which represents his humanistic leadership. Since he considered that employees were
borrowed from the public (PHP S
oken, 1991), he believed that it was the second social
responsibility of the company to develop honorable human beings, employees and members
of society (PHP S
oken, 1991).
The basics of education are to enrich human nature, to build a peaceful and happy life, and to bring
prosperity to society by developing and preserving harmony with wisdom, affections, and will (PHP
S
oken, 1992, vol. 38, p. 90).
Education is to unleash a person’s potential, not to give (PHP S
oken, 1992, vol. 38, p. 95).
His approach to developing people falls into two categories: providing opportunities and
motivating people. The first instance of him educating his employees can be traced back to
when his company was started. He and his wife made young bachelor employees live on the Humanistic
second floor of their house during their apprenticeship because he believed that such an leadership for
experience could produce excellent merchants (in bygone times, merchants used to live in a
shop to understand the difficulties they would experience in their future career). The couple
success
took care of all the daily needs of the employees, even teaching them how to greet people (PHP
S
oken, 1992).
Matsushita founded a school to develop employees and produce graduates who had
acquired knowledge about the ways of conducting real business as an industrialist (PHP 635
S
oken, 1992). He also gave a special lecture in this school (Sato, 2015), after which he founded
other schools to develop young people. In one of the schools, he proclaimed in a speech that
while it is important to acquire good knowledge and technical skills, students should also
have the charitable instinct and passion to help and serve others (PHP S
oken, 1992). His ideas
on developing human nature were also implemented in his schools for non-employees.
In his schools, especially the MIGM, self-improvement was a key educational concept. He
said: “Management is to acquire by oneself. To acquire it, it is necessary to listen to someone’s
lectures or to experience by oneself. However, this is not something to be taught” (PHP S
oken,
1991). Based on this belief, he introduced the profit center approach (dividing the organization
into three according to products) and offered an opportunity for management experience by
delegating his responsibilities as the head of the whole company to the chiefs of each division.
Since the results of each division became transparent, the chiefs had to be responsible for their
own results to generate profit. He regarded this system as a challenge for management
executives, which resulted in the development of future entrepreneurs and presidents (PHP
S
oken, 1991).
Matsushita was a highly skilled leader who motivated people. He praised his employees at
every turn: “You can do it” or “I thought you could do it.” (Eguchi, 2017). He praised and
reprimanded his employees whenever it was due (PHP S
oken, 1991). As he explained, it came
from a place of affection, rather than anger, and aimed to make them more conscious in
improving them (PHP S
oken, 1992). He also never forgot to follow-up to change their negative
feeling into a positive one after he reprimanded them. For example, he gave a new task – a
new opportunity – to let them know of his continued expectations from them (Eguchi, 2017).
He respected their personality. Therefore, employees who were reprimanded did not hold a
grudge against him; instead, they pride themselves for being reprimanded by Konosuke
Matsushita because it signified that they were recognized as prospects (PHP S
oken, 1991).
Employees he reprimanded performed better in the company and became top business
executives (PHP S
oken, 1991; Eguchi, 2017).
Moreover, he provided objectives to motivate employees. However, these objectives were
not checklists usually defined to subordinates. Instead, he always motivated them by
demonstrating the direction of the company and his thoughts, which pushed them to dream.
He said that this practice is necessary for the company and the president, as was constant
communication with all the employees (PHP S
oken, 1991). By sharing his thoughts, he
encouraged them to find a way to achieve their dreams.

Respecting people
Konosuke Matsushita said he did not want to manage his company by only focusing on
wages, viewing people as production costs and not respecting their personality (PHP S
oken,
1992). Instead, his vision was to increase employees’ salaries. After visiting the United States
and Europe, he said his mission was to catch up to their level of compensation (PHP S
oken,
1991) and ensure a stable life for his employees after retirement (PHP S
oken, 1992). He always
thought about his employees and whether they were working cheerfully every day (PHP
S
oken, 1992). Therefore, he believed his mission as a top leader was to provide them a
CCSM comfortable working environment. The authors identified three characteristics from his
27,4 sayings that describe his commitment to taking care of people.
First, just two years after his company was established, he created an institution called
“Hoichi Kai” in 1920 to promote amity among employees, of which he was also a participant.
This group organized company athletic meets, excursions, cultural events and issued a
company magazine. After Second World War, this group was forced to dissolve. However, his
idea of ensuring better living for his employees resulted in various benefits, such as the
636 construction of a hospital, recreational facilities and company housing (PHP S
oken, 1992). He
also introduced a five-day workweek system in 1965 before any other large Japanese
company. He hoped his employees would rest on one day and be involved in cultural activities
on the other (PHP S
oken, 1991).
Second, to respect employees’ personality, he believed there were no high or low
occupations in human society (PHP S
oken, 1992), and each person had different qualities that
made them unique. To treat people equally, he demolished the distinction between factory
workers and other employees, giving all employees the same benefit, such as a monthly
salary. Regarding status, Matsushita thought it was not good to have a large income gap
between the rich and the poor in a company, as in other Japanese management systems. In
contrast to the traditional Japanese salary system, he changed the seniority-based salary
system to the real wage system (PHP S
oken, 1991). Regarding personnel relocations and
promotions, Matsushita again differed from Japanese tradition. The authors found a Japanese
idiom, “the right man in the right place,” several times in his words. He said a qualified person
might become president, but it should not be based on seniority (PHP S
oken, 1991). Moreover,
it was unfair to consider employees’ promotions and salaries based on seniority.
Humanistic leaders respect employees as holistic human beings, and this generates trust
between the leaders and employees. Since Konosuke Matsushita was unable to do everything
by himself due to his physical weaknesses, he trusted others and sought help and assistance
(PHP S
oken, 1991). The authors identified behaviors that show his trust toward his
employees. He disclosed his company results to his employees even during the start-up of a
small factory. This openness effectively made employees work harder as they knew an
increase in sales would make them happier. He also allowed employees to manage factories
because he believed they would follow his instructions when something went wrong at the
factory (PHP S
oken, 1992). When he was asked to provide discounts to customers, he would
not do so because he believed his employees had worked hard to produce the products; thus,
he would feel bad to unilaterally decide on a discount (PHP S
oken, 1992). Hence, humanistic
leaders have the capacity for compassion. His trust toward his employees and their
confidence in him brought unity. The authors found evidence of how the relationship between
himself and his employees was strong and based on mutual trust. Just after Second World
War, Japan was under US military occupation (generally referred to as the General
Headquarters or GHQ), which resulted in its reformation. An initiative of the GHQ was labor
reform; it encouraged the creation of labor unions. Following this trend, the Matsushita
Electric labor union was organized in 1946. At the first meeting, although uninvited,
Matsushita decided to attend and deliver a congratulatory speech to his employees with
whom he had worked. In his speech, he stated, to thunderous applause: “I also intend to start a
new management from now on. The stance between the labor union and the company is
different, but our purpose to contribute to society is the same, so let’s cooperate with each
other.” It was exceptional that an employer joined the labor union meeting and was
passionately welcomed (PHP S
oken, 1991). Another story that shows how his followers
appraised him was when he was ordered to step down as president in 1946 by the GHQ, which
issued directives, including the reform of the Zaibatsu [2]. Matsushita’s company was labeled
as one of the Zaibatsu. Thus, family members were prohibited from being directors of the
company. However, the labor union decided he must not be expelled. His employees lobbied
GHQ and the government. Together, they signed an appeal that Matsushita was needed to Humanistic
manage the company. Matsushita’s name was subsequently excluded from the list of leadership for
Zaibatsu, and he returned to the company to manage it.
success
Making a profit for society
As defined in the Basic Management Objectives, Matsushita set out to find a balance between
profit and social justice at the beginning. However, after affirming that the mission of the 637
company is to contribute to society, he removed this phrase to replace it with “responsibilities
as industrialists” in the Basic Management Objectives. He said: “It is not allowed to do
business if you are not making a profit while using the people and money of society. So if
profits are not produced definitely, a company is not allowed to do business. People and
money must be returned to society (PHP S
oken, 1991, vol. 6, p. 183).”
This way of thinking influenced his way of conducting business. He was rigidly
committed to setting appropriate prices, which provided appropriate (not too much) profit. He
considered that the low-margin high-volume logic made only one person rich and exhausted
others because of price competition. He believed that appropriate profits could lead to a
prosperous society (PHP S
oken, 1992).

Mechanism of humanistic leadership for success

The mechanism of humanistic leadership (Figure 1) starts from setting forth a company
philosophy that defines a mission and calls to contribute to society. Individually, employees,
dealers, customers and shareholders comprise society. The philosophy is implemented after
sharing with employees; thus, they are unified to work toward a common objective. Since a
humanistic leader is aware of his limitations, he listens to others to collect wisdom and
improve himself. Through his personal experiences, Matsushita understood the importance
of developing people. He also respected his employees as he borrowed them from society.
Thus, he treated them fairly and provided a better living environment to encourage them to
work harder. All his practices resulted in ensuring that the company performed well.
To ensure company performance, Matsushita said the president needed to outline a
company mission to employees, who would then place a higher value on living and working
hard (PHP S
oken, 1991). Moreover, to enhance workplace efficiency, it was necessary to
provide both a comfortable working environment and improve each employee’s individual
ability (PHP S
oken, 1992). Thus, Matsushita integrated his humanistic leadership goals by
taking care of his employees, improving the company’s performance and developing the
society. This act demonstrated that he was good at establishing a mechanism that enabled his
company to function properly. Moreover, his speech style had the power to persuade people.

Matsushita’s leadership and Japanese spiritual soul

Matsushita, known as a philosopher, published a book entitled: “About Japan and the
Japanese (2015).” In this book, he covered three traditional Japanese spirits: keeping
independence, collecting wisdom and respecting Wa (harmony).

Maintaining independence while embracing other cultures

Matsushita said the most important characteristic of the Japanese people is that they have
embraced a variety of ideas and cultures from overseas, across various periods in history.
Even so, they have not lost their individuality. They have instead absorbed, digested and
“Japan-ized” these well (PHP S
oken, 1992). He mentioned that while Shinto [3], the Japanese
indigenous religion, has been rooted in daily life, Japanese people have assimilated
Confucianism from China and Buddhism from India (by way of China). These three religions
CCSM have together formulated Japanese values; however, neither of them has replaced Shinto.
27,4 This behavior of integrating good cultures and practices from abroad, while maintaining
Japanese traditions, is what he called “maintaining independence.” He was open to the
introduction of good things from abroad. For instance, he appreciated the good aspects of
the Japanese seniority system. Moreover, he emphasized the introduction of “the right man in
the right place” culture from the United States (PHP S
oken, 1992).
The integration of Shinto, Buddhism and Confucianism was activated in particular during
638 the Edo period and is connected with values at present (Mori, 2018). Books read during the
Edo period are still loved by people like Matsushita. The book “Tohimondou,” written by
Baigan Ishida (1685–1744), a philosopher of the Edo period, guided the way Matsushita did
business. Matsushita followed Ishida’s footsteps when he established the PHP Institution.
Ishida amalgamated Confucianism, Buddhism and Shinto in his philosophy. The essence of
his ideas was to observe oneself and develop human nature (Jojima, 2016). Matsushita spent a
lifetime exploring human beings in PHP and offered education to improve human nature.
Ishida also pondered the rightfulness of merchants making a profit (there was a hierarchy of
samurai, farmers, artisans and merchants in Edo society, where people considered merchants
as those who just transferred goods from one place to another). He said that merchants had to
conduct honest business and serve people and society (Jojima, 2016). Likewise, Matsushita
defined the mission of his company to contribute to society and emphasized the making of an
appropriate profit for all the stakeholders.

Collecting wisdom broadly

The traditional Japanese value of “collecting wisdom” originated in Shinto. The books
“Kojiki” [4] and “Nihon Shoki,” [5] described scenes where Kamigami (deities) came together
and talked to collect wisdom for decision-making. Prince Sh
otoku, however, defined this
practice in the first constitution of Japan that he established in 604 A.C. Article 17 of the
constitution says: “Decisions should not be made by one person. Important matters must be
discussed and decided with all, to avoid errors and mistakes.” Matsushita admitted he could
avoid making wrong decisions by collecting wisdom (PHP S
oken, 1992). He also said that he
collected wisdom and made decisions by himself (PHP S
oken, 1991). Since he was fully aware
of his responsibility in his decision-making, he listened deeply and respectfully to what others
had to say.

Respecting Wa
The third Japanese traditional value, Wa, is the greatest of virtues. It signifies harmony or
cooperation, as can be seen, for example, in the life of Nagaya (row houses) in the Edo period.
People borrowed daily goods, such as food and dishes from each other, or took care of the
children of others. Nagaya was a community based on the spirit of cooperation (MLIT, 2019).
Wa has another meaning, which is written in the first article in the constitution with the
phrase, “respecting Wa.” It means “do not quarrel. Discuss in harmony . . . with anyone
regardless of hierarchy. Then things will go well.” One of Matsushita’s famous stories
regarded a conference in the Atami hot spring resort in 1964 at the start of the economic
downturn in Japan. He called the presidents of 170 sales companies and distributors of
Matsushita Electric to discuss their worsening business conditions. He then realized that only
about 20 companies were performing well. Initially, it was planned for two days. However,
their complaints that only Matsushita Electric was making a profit did not stop. Since they
had not reached a conclusion, he decided to extend the conference. On the stage, he admitted
responsibility and apologized to them. Moreover, he asked for their support to reform a
distribution channel. All participants agreed with him, acknowledging his cordiality
(Panasonic Corporation, 2019; Watanabe, 2019). This story reflects his humanistic leadership
and Wa. People belong to one society and cooperate together for prosperity. He called this “co- Humanistic
existence and co–prosperity.” leadership for
This value does not separate people into groups, which only produce squabbles.
Matsushita said in a conference with entrepreneurs that there were no factions in his
success
company; all employees had freedom of speech (PHP S
oken, 1991). He believed that clarifying
the company direction could prevent the creation of factions (PHP S
oken, 1991).
Since “respecting Wa” is in the first constitution of Japan, it is widely accepted that this
also addresses peace. Matsushita wrote in his book that the Japanese are peace-loving people. 639
When he established his research institution in 1946, just one year after Second World War,
he named it PHP, “Peace and Happiness through Prosperity.” His second journey began with
the Japanese traditional spirit of “respecting Wa.”

Heritage and employees’ perceptions

This section shows how Matsushita’s beliefs have been reinterpreted and how they impact
employees’ attitudes toward work. The authors found that while there are some limitations in
applying his beliefs in businesses at present, his humanistic philosophy of taking care of all
stakeholders remains firm within his company.

Implementation of Matsushita’s philosophy

In May 1933, Konosuke Matsushita began to make his employees recite the “Five Principles”
and express their views at daily early morning meetings. He believed it was important to
express his beliefs to his employees, beneficial for his employees to know their colleagues’
personalities and helpful for them to publicly speak at the meetings. Later, employees also
recited the Basic Management Objectives, the Company Creed and group songs at these
meetings. This practice endures at present. Until Matsushita stepped down, he continued to
speak about his philosophy to his employees passionately. After his death, those who worked
with him retained his philosophy and sayings. As the first generation of his employees
retired, the dissemination of his ideas has been conducted by videos or audio recordings.
Currently, newcomers are trained for two weeks prior to working at the company, and a large
amount of that time is allocated to learning the company’s philosophy and the history of
Konosuke Matsushita. Moreover, there are occasions to review lessons during their first year,
upon the commencement of their third year or during their promotion. Furthermore, they
celebrate the annual foundation day during which top managers read out Konosuke
Matsushita’s May 5, 1932, announcement, where he shares his philosophy for the company.
Thus, his practices and his beliefs have been carried on for generations at his company.

Matsushita’s influence on present employees

Though the company offers fulfilling training to its employees, there is a concern that the
company philosophy is becoming “history.” Another concern is the extent to which
Matsushita’s philosophy is accurately transmitted to present employees since there is no
opportunity to listen to his beliefs and receive an explanation for them (Interview No. 1).
Interviews conducted with present employees in this study show the interpretations of
Konosuke Matsushita’s sayings:
Since I’m in charge of the sales channel of Mom-and-Pop stores (dealers established by Konosuke
Matsushita), I completely agree with his saying, “co-existence and co–prosperity.” Business cannot
be done only by the ego of the manufacturer, but we need to cooperate with them to provide valuable
products to end-users. His sayings still work in the sales channel of dealers (Interview No. 3).
As Konosuke Matsushita established the sales network of dealers from scratch, he paid
particular attention to the company’s sales channel and distributors by advising them on
CCSM elements such as their methods of selling and checking their profitability. Salespeople in this
27,4 channel can still learn about Konosuke Matsushita from Mom-and-Pop storeowners who are
now in their 70s and 80s and directly worked with him. In addition to reinforcing their business
model, these experiences enhance the sales channel’s empathy with Matsushita’s beliefs.
However, employees in the new business world who did not exist during the Matsushita epoch
believe that they do not fully connect with his words. Daily early morning meetings were
stopped because employees thought there were better uses of their precious morning time.
640
There’re a lot of his words that are related to manufacturing. Since my job is to provide solutions to
B2B customers, the goal, “contribute to the customer,” is the same, but the approach is different. His
thought, “our mission as a manufacturer is to create material abundance by providing goods as
plentifully and inexpensively as tap water,” is one way of thinking about things but not appropriate
for my business (Interview No. 4).
I do not want to be fully infected by his philosophy (Interview No. 6).
Despite these comments, Matsushita’s fundamental humanistic leadership qualities are still
fully presented during training when employees join the company.
In my daily job, when I wonder whether this is beneficial for a customer or whether I must do this
task, his words are useful to make a judgment. Personally, I try to listen to others in my business like
Konosuke Matsushita in “collecting others’ wisdom” because I’m not that intelligent; neither do I
have technical skills. (Interview No. 4).
(After the training on Konosuke Matsushita) It’s nice that I can work on thinking of why I must sell
this product or what . . . a consumer’s life will be like if I sell this to a customer (Interview No. 5).
To be honest, I did not know about Konosuke Matsushita before I joined Panasonic. . . after having I
learned about him, what impressed me most was his saying, “before you make a product, you have to
produce a person.” I was educated on how I should be as a member of society, and I could get . . . basic
training on how to interact with someone in a business situation (Interview No. 6).
These accounts prove that employees still retain Konosuke Matsushita’s humanistic
leadership principles – taking care of stakeholders, listening to others and developing people.

Discussion
Amid mounting global interest in human nature, scholars and practitioners have turned their
attention to leadership theories that consider the centrality of people as essential for
successful business management (Mele, 2013). This study contributes to an initial input for
developing a theory about humanistic leadership in the local cultural context. The authors’
findings highlight the mechanism of humanistic leadership, the connection between
Matsushita’s humanistic leadership and Japanese cultural values and the challenge of
transmitting the company philosophy.

Mechanism of humanistic leadership

The authors first discover a mechanism of humanistic leadership that leads a company to
success. By coding Matsushita’s sayings, the authors identified his behaviors, which were
linked to his underlying beliefs and his company’s performance. Most existing studies on
leadership models present a linear connection of attributes from motivating followers to
company outputs as the final goal. Servant leadership also pays attention to others outside its
organization but to the specific community that the servant-leader builds for demonstrating
his own unlimited liability (Spears, 2002). However, since humanistic leadership strives to
pursue the common good, its goals go beyond company output and no boundary. Thus, a
model of humanistic leadership must be circular to return a profit to society for its
contribution to business activities as illustrated in Figure 1.
 Previous studies on leadership clarified leaders’ behaviors toward followers by showing Humanistic
the attributes of leaders that motivate followers and improve their performance. However, leadership for
direct actions toward followers are not the only factors contributing to a company’s improved
performance. This study reveals the importance of building a company philosophy based on
success
humanistic values, which results in a shared common spirit, thereby unifying a leader and his
employees.
Practically, this mechanism is encouraging for Japanese leaders, in particular, who have
been struggling with low profitability or stuck between Japanese traditional values and 641
Western leadership models. As a top leader and manager, Matsushita continued to say that
the company, as an official institution, must make a profit. He determined a threshold of 10%
profit; his company produced a 10% profit on average during his tenure as president and
chairman. He struck a balance between his humanistic leadership and the seemingly
incompatible goal of profit-making (Kotter, 1997). For Japanese manufacturing companies,
the operating margin was just 4.8% on average in 2018 (METI, 2019).
The authors’ findings can be applied to the current leaders by checking for behaviors such
as those identified in the case of Matsushita. One day when he was asked about the secret of
his business success, he replied: “I continue doing what I think are common practices, nothing
special” (PHP S
oken, 1991, vol. 10, p. 293). He spoke to his employees about his beliefs daily.
He directed his energy toward embedding his philosophy in his employees, thus shortening
the mental distance between him and his employees. Meanwhile, he was always thinking of
improving the living and working conditions of his employees. In these modern times in
Japan, can leaders with university degrees be aware of the qualities they lack and amenably
collect wisdom from others? Can they devote themselves to the development of their
employees? Nowadays, companies generally develop their employees through formatted
training by trainers either from within or outside of the company. Humanistic leaders must
instill a dream in their employees that they can find true value to their lives, leading them to
develop mentally and technically. To do this, however, leaders must have their own dream
and share it with followers in an aspirational way. Moreover, for current leaders, whether
they can associate their behaviors with company philosophy and circulate them as a
mechanism to improve company performance, as Matsushita did, is critical.

Connection with local cultural values

This study showed the effectiveness of Matsushita’s leadership, which was connected with
Japanese traditional values, as per the argument of The Global Leadership and Organizational
Behavior Effectiveness research project. It showed that leadership effectiveness is determined
by the extent to which leaders’ values are aligned with the normative values of society (House
et al., 2014). Matsushita emphasized the spirit of Wa in listening to others and collecting
wisdom, which has been a traditional Japanese value for more than 1300 years, deeply rooted
in Japanese culture. However, in uncertain world conditions, leadership that collects wisdom,
regardless of nationality, sex and religion, and solves problems by respecting Wa is expected
by the people. This leadership may also be useful for building a new leadership theory.
In practice, the authors’ findings on Matsushita’s decision-making revealed a difference
between leaders embedded in the consensus decision-making process in Japanese companies
and those who are not. Although he listened to others in collecting wisdom, he made the final
decision by himself and accepted the responsibility of that decision as a top leader. This
situation provides insight to practitioners, in particular, as it takes time to achieve consensus
in the top management, where nobody takes responsibility for a critical decision, which
results in the company losing business opportunities in the global environment. The
approach of collecting wisdom from others but ensuring that a top leader makes the final
decision is best suited for Japanese leaders with traditional values.
CCSM Founder’s philosophy lives on 100-year-old company
27,4 The interviews with present employees showed that while they empathize with the essence of
his philosophy, they feel that it is inadaptable, and implementing his words is challenging. Since
his communication style was to visit the Gemba and talk to employees himself, he could explain
why he said what he said. Frequency and depth of communication were important to conveying
his underlying beliefs precisely. Without this ongoing communication, there is a risk that
employees will interpret his words differently. For instance, there is a concern that employees
642 might pursue quick profits (Interview No. 2) by taking his words (“no value of our existence if
we cannot make profit. Our profit is a return by contributing to the society”) literally.
Moreover, the business model and environment have changed. Instead of producing
commodities and goods with low prices, offering value-added products and solution services
is vital to surviving in the competitive global business environment. Therefore, current
employees feel that Matsushita’s words, “our mission, as a manufacturer, is to create material
abundance by providing goods as plentifully and inexpensively as tap water,” are no longer
fully applicable. In fact, Matsushita modified some words during his tenure, according to the
changes in circumstances surrounding the company. However, the essence of its contribution
to society was never touched and remains unchanged within Panasonic. Leaders play a key
role in changing organizational culture, and the central issue for them is to understand the
underlying level of their organizational culture (Schein, 2010). A challenge for successors will
be to understand and retain the essence of achieving human well-being. In Japan, there are
over 33,000 companies with more than 100 years of history as of 2019 (Teikoku bank, 2019),
and most of them consider the society and their employees as most significant. These
examples will provide insights to both practitioners and researchers.

Conclusion
This study has demonstrated how humanistic leadership functions in a profitable company by
examining the behaviors of Konosuke Matsushita, who was named the “God of management” in
Japan. Moreover, the authors presented the Japanese values underpinning these behaviors. Even
at present, an increasing number of new leadership theories are being proposed (Avolio et al.,
2009) in response to current world conditions and societal needs, especially in the United States.
Authentic and ethical leadership exemplifies this trend. Comparatively, humanistic leadership
focuses on human well-being as its ultimate purpose (Fu et al., 2020), which can freely be applied
without internal and external issues (i.e. ethical or financial). For instance, Matsushita survived
the Great Depression without firing any employees and overcame Second World War.
Nevertheless, this research has limitations, as it only considers one case. Future studies should
explore the characteristics of humanistic leadership further. The approach to building a new
leadership theory via empirical studies from different cultures will help enhance culturally
implicit leadership (House et al., 2014) and curb the bias by theory founders.
Business is not built only on interests . . . Business is a large part of social life . . . It is a bond with
people. Co-existence and co–prosperity will only work if both buyers and sellers . . . believe it (PHP
S
oken, 1992, vol. 35, pp. 120).
Indeed, for a humanistic leader, the people always come first.

Notes
1. Gemba is a Japanese expression used to describe an on-site or on-the-spot factory and sales shop.
Among Japanese companies, top leaders visit the Gemba to talk to employees directly and observe
the factory’s operations.
2. Zaibatsu is a Japanese conglomerate, owned by a large family business, which existed until the end of
Second World War.
3. Shinto is the indigenous faith of the Japanese people without dogma, doctrine or founder. It is a way Humanistic
of life and thinking that has been an integral part of Japanese culture for 2000 years. The myriad
kami – a word that corresponds to “deity” in English – resides in the natural world, and Kamigami leadership for
(e.g. kami of the mountains and kami of the sea) are all around us. However, many people visit Shinto success
shrines to wish for good luck (Jinja Honcho, 2020).
4. Kojiki is known as the oldest Japanese history book, written in 712 AD by Yasumaro Oono (National
Archives of Japan, 2019).
5. Nihon Shoki is the first Japanese imperial-commissioned history book written in 720 AD (National
643
Archives of Japan, 2019).

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Corresponding author
Kaori Ono can be contacted at: [email protected]

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