[FOUNTAIN]Family isn’t necessary for profits

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[FOUNTAIN]Family isn’t necessary for profits

Toyota and Honda are two Japanese carmakers known internationally. But the two companies have completely different styles. Toyota is known not only for its quality products but also for its efficient management system, known as “Kaizen,” now a common term in business management. Jack Welch, former CEO of General Electric, once called Toyota the business school for GE.
Honda is a company that champions its engineers. Since it was founded in 1948, Honda has focused on technology development and even won an international motorcycle race in 1961.
In an international automobile market dominated by giant manufacturers, Honda established itself despite its relatively small size with superb technology. Under the banner of researching transportation technology, Honda developed a small jet model last year following the introduction of a humanoid robot, Asimo.
The two companies have different management structures. The family members of the Toyota founder are still among the executives of the company. Founder Kiichiro Toyoda resigned over the company’s insolvent operations and handed over the management to professionals in 1950. But the founder’s cousin and son ran the business from 1967 to 1999. The current chairman and president are career business executives, but the grandchildren of the founder participate in the management.
In contrast, Honda founder Soichiro Honda forbid his family from getting involved in the company management. Not only his own family but also the children of the executives are banned from joining the company. He wanted to make sure that no factors other than ability were considered in hiring employees.
In contrast, the latest concern of the four major conglomerates in Korea is maintaining company control.
Ministry of Finance and Economy official Shin Jae-yoon, who was dispatched to the Federation of Korean Industries a month ago, said the business giants were worried about the inheritance of management rights and hostile takeover attempts by foreign capital. Critics say owners are obsessed with keeping control.
Perhaps they are. The examples of Toyota and Honda show that the distinction between family members and outsiders is meaningless. What is more important is the ability to get the job done.

by Lee Se-jung

The writer is an editorial writer of the JoongAng Ilbo.
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