Shiseido

External impact like technology innovation could influence on processes of product designing and manufacturing of Olympus, which could further determine the development routine of the company. Meanwhile, to reassuring business continuity, Olympus strengthened its factories as a method against natural disasters. Performance of identifying crisis, which is considered as capable in Olympus, is treated as an index that could judge the performance of the overall resiliency of the corporation.

Highlighting the importance of governance originated from the occurred scandal is the approach of experience internalization that consolidates the resiliency of Olympus. Finally, taking the balance of chance acquiring and risk in the decision-making process, as a suggestion of crisis encountered, would enable Olympus to boost its resilience performance.

Research Participants

Mr. Uemura, the Vice President, took charge of Frontier Science Business Division of Shiseido as of the interviewing time, participated in this research as the main force. As the additional personnel who contributed, Mr. Igarashi, a manager of Frontier Science Business Department of Business Planning Group of Shiseido, engaged in this research.

Conceptual Trees of Various Topics on Crisis of Shiseido

Figure 6.4.2, Figure 6.4.3, Figure 6.4.4, and Figure 6.4.5 reflect the concept tree of business strategy, business resilience, CSR, and additional factors of Olympus based on a description of the research participants.

Figure 6.4.2 Concept Tree of Strategy of Shiseido

Figure 6.4.3 Concept Tree of Resilience of Shiseido

Figure 6.4.4 Concept Tree of CSR of Shiseido

Figure 6.4.5 Concept Tree of Additional Factors of Shiseido

Case Analysis

Conceptual Framework of Business Strategy of Shiseido

Issues from five dimensions consist of Shiseido's mindset on account of business strategy under crisis, as suggested by Figure 6.4.2.

Shiseido has a rich sense of risk awareness it might confront. Research and development of products and quality and security of the products are the most fundamental issues, as well as the most critical ones that Shiseido concerns. Moreover, the company identifies rumors, in cases of crises, due to delayed information revealing to the public would create crisis towards itself.

Compliance management acts as the method to deliver accurate execution all the way top-down raised the company's attention since the gap of misunderstanding during crisis dealing can be assured by consolidating its validity.

Meanwhile, the company acknowledges that crisis events could lead to the occurrence of reputation adversity to itself from two aspects. On the one hand, Shiseido would suffer from trust losing reflected by declining income, sales, and profit. On the other hand, with the appearance of crises, it means that the company failed to fulfill the missions that are intended for the well being of the public.

Encountering on crises, regarded by Shiseido, guarantees the resiliency of the company strategically. As of time point of data collection, Shiseido established a report line that enables the information and feedback conducted from corners all over the business to be centralized on the table of the top management, which aims to function timely judgment while responding to crises.

Further, the correctness of actions and decisions to crisis handling are simultaneously reviewed since it directly determines the outcome of the efforts that Shiseido devotes under the preset scenarios.

Moreover, the fundamental management culture enhances the performance of resiliency. In Shiseido, junior staff could talk to the supervisors who can directly reach the top management in crises promptly as they wish. Then, the supervisors would tell the board members in case of when they believe personnel with more authorities should engage.

Lastly, observing the competitors' performance of crises dealing is a useful path for Shiseido to complement its strategic system of resilience assurance. By the time of the data collection, the company had reinforced the awareness of the significance of information revealing and product safety confirming in crises.

Conceptual Framework of Business Resilience of Shiseido

As proved by Figure 6.4.3, Shiseido holds ten nodes of the topic of its resilience with luxurious, layered specifications.

In respect of resilience, outside attention in crises concerns Shiseido at the utmost because of its operation autonomy would be constrained due to the report conducted by mass media and intervention directed by supervising authorities. In speak of mass media, the company concludes

that it would be an apparent target attacked by loads of media agencies under crisis scenarios.

Moreover, supervising authorities will not only intervene in the attitude of Shiseido on crisis responding but also implementing a strict checking process on small issues that broke down from a significant problem.

The following six nodes are considered equal to the importance on account of the richness of the content. As described by the participants, leadership efficiency could play it partly in building a system with resiliency inside Shiseido. For the performance in this regard, the data suggest that Shiseido practices on the right track due to distribute the quick response to the public by transmitting clear instructions to its employee. Meanwhile, the information required by the company, to some extent, could decide the performance of resiliency in crisis. Shiseido focuses on acquiring information about the cause of crisis events linked with relevant consequence estimation simultaneously.

Similarly, the Shiseido group's group guarantees its efficiency in emergencies with executing swift response under the support of the report line discussed previously. Furthermore, top leaders share information in their hands with each other to prevent potential risk due to a lack of communication.

Then they will promptly predict adversities as the preparation for following movements.

Meanwhile, a particular management system would be nominated subject to the dynamics of crises in Shiseido. Internal division and departments engaged in would process crisis response procedures with specified duties of their specialties, as well as information exchanging among them. Experience concluding is one of the aspects to boost the performance of the resiliency of Shiseido. For example, the company had learned that biased information would incur if the inquiries raised from the external were left untouched, which would further require Shiseido to invest much more energies and resources to cope. Equally, obtaining a system that contributes to detecting risks is vital. In Shiseido, this system is divided into two parts. On the one hand, under crises, the internal staff report either in a written or verbal manner so that the information secured with accuracy could flow as quickly as possible. On the other hand, the system is assured to conduct outcomes with objectivity since half of Shiseido's board members are external.

Three other facets, though with less significance, are also in the range of consideration of resiliency. First, the company acknowledges that the crises, under this research category, would have a huge impact on itself, which implies that Shiseido would proactively avoid such circumstances. Second, Shiseido believes that by carefully examine the fluctuation of budget performance, its financial information could reveal part of the information regarding potential crises. Lastly, Shiseido set a top-down channel that can execute while the management staff in middle-rank express their concerns about crises from their specific views to senior managers, then the senior managers could implement methods correspondingly in a top-down structure.

Conceptual Framework of CSR of Shiseido

As portrayed in Figure 6.4.4, Shiseido concerns its stakeholders under four categories. The company identifies that it shoulders the responsibilities of risk announcing and advise providing to its customers. Employees of Shiseido has the right to know the reality of crises and expressing

their thoughts and solutions.

As to investors, Shiseido persists that its investors are secured the right to knowing crises responding details such as the introduction of crisis responding system, and the measures have been taken under emergencies. To regulators, though without acknowledging specific responsibility, Shiseido insists to actively cooperates with its regulator with integrity as the cornerstone of responsibility fulfilling.

Conceptual Framework of Additional Factors of Shiseido

Figure 6.4.5 illustrates the additional concerns of Shiseido with respect to its overall resiliency.

The efficiency of signal identifying is considered vital to the company. In practice, Shiseido assures this efficiency underlay by fact confession and quick decision-making process. Moreover, Shiseido also values on constructing experience internalization system a lot. On the one hand, the company makes judgments under crises root in the feedback of its frontline staff. On the other hand, the company conducts drills regularly as a simulation of a crisis occurring, which aims to cultivate better performance on crises responding.

Further, on business continuity, Shiseido deploys the BOP system that responds to crisis events with careful review. However, both participants failed to provide the full name of the BOP.

Meanwhile, the company is sensitive to the external impact, as the need for alternating its oversea customers. Finally, the company is less likely to consider replacing top leaders while they were not available in an interim manner because the company believes it is not easy to do so.