(Two-part Series:1) Discussion with the President

A Series of Steel Artwork:
“Place and Space” by Makoto Ito
Can the sculptures find their address? In various places;
From empty space.
No. 363
March
2008
“FLEX”
When standing on our head, we feel as though we are lifting up
the earth. How, then, would it feel to do acrobatics on a wall?
(Steel and urethane coating; 300×350×160; Arakawa Industrial High School; Photographed by ⓒ Yamamoto)
Published monthly by
Public Relations Center
General Administration Div.
Nippon Steel Corporation
Makoto Ito: Born in 1955, this artist graduated from the Sculpture Program of Musashi-no Art University in 1981. He then
entered the graduate program in Art and Design at the same
university, which he completed in 1983. He participated in
the Triangle Artist Workshop in New York with a grant from
the Asian Cultural Council in 1993 and was then dispatched
to England by the Agency for Cultural Affairs for its program
to train artists overseas. In 1999, he assumed the position
of professor, Sculpture Program, College of Art and Design,
Musashino Art University.
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In this issue
Feature Story
Discussion with the President (Two-part Series: 1)
What Lessons Do the Stories of History Offer to the Present Age?
The discussion with Ms. Nanami Shiono, a novelist, revolved around the question: “What lessons does
history offer those living in today’s modern age?”.
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In the first quarter through the third quarter (April 1, 2007 to December 31, 2007) of the fiscal year ending March 31, 2008, consolidated net sales came to ¥3,506.1 billion, consolidated operating profit to
¥408.1 billion, and consolidated net income to ¥263.0 billion.
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No. 363 March 2008
Feature Story
Discussion with the President (Two-part Series: 1)
History: A Wealth of Anthropology
What Lessons Do the Stories of History Offer to the Present Age?
Nanami Shiono
Author and novelist
Nippon Steel Monthly (a house magazine of Nippon Steel Corporation) hails
the advent of 2008 by inviting Nanami Shiono to a face-to-face discussion with
President Akio Mimura of Nippon Steel. Ms. Shiono, an author and novelist, has
lived for many years in Italy and is renowned for her works on Italian history,
particularly her unique perspective on ancient Rome and Renaissance Italy.
The discussion revolved around the question: “What lessons does history offer
those living in today’s modern age?”.
Nippon Steel News (nos. 363 and 364) presents a two-part series that recounts this face-to-face discussion:
Part 1: Journeying through ancient Roman history in search of an answer;
the “hypothetical in history” provides a guideline for our response to
change; and “clementia (tolerance),” a practice originating in Japanese
management philosophy
Part 2: Equanimity and the ability to cope with the issues of the day-Two indispensable requirements for leadership; the importance of forming organizations that transform hardship into joy and the need to express the
“imaginary” that has the potential to become“ reality
The current issue (No. 363) highlights Part 1.
Nanami Shiono: After pursuing studies in Italy and returning to Japan, Ms.
Shiono made her publishing debut with Runessansu no Onna-tachi (Women
of the Renaissance), issued serially in the literary magazine Chuo Koron. In
1970, she won the Mainichi Literary Award with her second work Chesare
Borujia Aruiwa Yuuganaru Reikoku (Cesare Borgia, the Elegant Tyrant). She
then acquired permanent residency in Italy and continued her extensive writ-
ings on the history and current affairs of Italy. In 1982, based on her work
Umi no Miyako no Monogatari (Stories of a Maritime City) that depicts the
rise and fall of the Venetian Republic, she won two prominent literary prizes
in Japan-the Kikuchi Kan Prize and the Suntory Literary Prize. Then, in 1922,
she began her monumental 15-volume work on ancient Rome, Roma-jin no
Monogatari (The Stories of the Romans), which was incrementally published
Akio Mimura
Representative Director and President
Nippon Steel Corporation
at one volume per year until completed in 2006. For this great work and other
achievements, she was awarded many prizes-Shincho Literary Prize (1993),
Shiba Ryotaro Prize (1999), Grande Ufficiale Order of Merit of the Italian government (2002), and the Medal with Purple Ribbon of the Japanese government (2005). In 1907 she was designated as a Person of Cultural Merit by
the Japanese government.
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Journeying through Ancient Roman History in Search of an Answer
Mimura: I would like to congratulate you on being
designated in 2007 as a Person of Cultural Merit.
Several months ago when the staff of Nippon Steel Monthly showed me a list of potential
partners for this discussion, I immediately chose
you. Following your acceptance of our invitation,
I immersed myself in your writings to learn more
about you, just like cramming for exams when I
was a student. Having read your book Machiavelli
Goroku (Niccolò Machiavelli: Selected Quotes)
and some of your other works, I came to suspect
that your genesis as an author lay in Niccolò Machiavelli*1. What do you think?
Shiono: Well, you may be right. While I was conducting research on the history of Firenze, Italy,
for my graduation thesis, I came across documents about Machiavelli. I was shocked by statements like: “Men resent the loss of future prospects far longer than they do the death of their
*1 Niccolò Machiavelli (1469 -1527) : Secretary of Firenze
(Florence), Italy, and Renaissance philosopher. Representative
work: The Prince.
father.” Statements like these opened my eyes. In
addition, many intellectuals believe that because
“liberty” is important to them, it is also important
to others. However, Machiavelli says, “For many
people, food and security are the greatest neces-
Niccolò Machiavelli
©Archive Iconografico S.A./CORBIS
sity, and liberty much less so...” I think that these
remarks were truly revolutionary at that time.
Mimura: Among the many books on ancient Roman history written by scholars and men of letters,
your work in fifteen volumes Roma-jin no Monoga-
15-volume Roma-jin no Monogatari (The Stories of the Romans),
a renowned work by Ms. Nanami Shiono (Photo: Shinchosha)
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No. 363 March 2008
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tari (The Stories of the Romans) took over fifteen
years to complete and is the world’s first attempt
to describe the whole of Roman history in one
work. What motivated you to pursue this single
theme for fifteen long years?
Shiono: When I began this task, my seniors, including Ryotaro Shiba and Kentaro Hayashi* 2,
said to me, “In Japan, when the genre of history is
classified, there are only two categories: scientific
studies and novels. Your work is going to stand
midway between these two. It will be a difficult undertaking indeed.” Their words gave me courage. I
hear that bookstores in Japan are still at a loss as
to where to display my books. I am afraid that the
categorization of my books has always puzzled
the members of award selection committees. My
earnest wish is not to study histories written by
others, but to write history independently. I believe
that in order to answer the question of why Rome
alone was able to realize a Universal Empire that
transcends differences of race, culture, and religion, I had to write the history of Rome myself,
from a consistent and singular perspective.
History itself is dramatic, but only when we
closely observe human beings within it. In my career, I have followed with growing interest Gaius
Julius Caesar*3, an ideal man. When I have to depict the women of that era, I often find them similar to me, which spoils my desire to continue.
The “Hypothetical in History” Provides a Guideline for Our Response to Change
Shiono: Today we have a surprisingly small number of attractive politicians and economists. In light
of this, I was truly eager to meet you, President
Mimura. Former Premier Junichiro Koizumi once
said that, while in office, he often awoke at midnight with worries on his mind. I sense that you
are one of only a few “executives who share such
a battlefield.” The recent shakeout of the global
steel industry has led to the birth of Arcelor Mittal,
the world’s largest steel company. And while this
was happening, Nippon Steel was also undergoing a transformation, wasn’t it?
Mimura: During the past sixteen years, Mittal
repeated its global M&A strategy more than 20
times. In 2006, with the aim of acquiring advanced
technology, Mittal realized a quick hostile takeover
*2 Kentaro Hayashi (1913-2004): Historian (specializing in
modern German history), and critic. After serving as President
of the University of Tokyo, he became a member of the House of
Representatives.
*3 Gaius Julius Caesar (BC100 -44): Perpetual dictator in
ancient Rome. In opposition to the Roman Senate, he laid the
foundations of the Roman Empire. He is said to have been the
only genius that ancient Rome ever produced.
of Arcelor. Such global reorganization was unprecedented in the steel industry. And, faced with
circumstances dictated by the logic of capitalism,
no entity was in a position to support Arcelor. The
array of events occurring over the past couple of
years has not only had a severe impact on the
global steel industry, but it has also provided me
with a valuable lesson. I believe that our company
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has undergone a significant change while taking
measures to cope with the new situation.
Shiono: Nippon Steel’s temperate and generous corporate culture appeals to me. That is why
I have kept the stocks of Nippon Steel that my
mother left to me some decades ago. What if a
company with such a long tradition were involved
in an unforeseen “battlefield” situation, for instance? Two different cases are conceivable: the
company could be panic stricken and ultimately
thrown into despair, or it could regard the situation
as a good opportunity for change and become
steadily more invigorated. The latter case looks
true of Nippon Steel.
Mimura: I, too, constructed hypotheses similar to
your historical hypotheticals, Ms. Shiono. What
if Nippon Steel had been Mittal’s first acquisition
target, or what if Arcelor had asked for our assistance as a white knight*4? I contemplated what
would have been the proper course of action in
these two cases. These two “what ifs” demand extremely difficult decisions on my part.
Shiono: Historians say that “what if” scenarios
in history are taboo. But, I think that the use of
the hypothetical in history not only stimulates
our imagination but also furnishes a guideline for
thinking about events in present-day society. The
scope of experience acquired by a single person
during his lifetime is limited. Accordingly, I think
*4 White Knight: In contrast to a hostile buyer who makes a
takeover bid without the consent of the target company, a white
knight is a friendly buyer who presents a takeover bid after
reaching mutual agreement with the management of the company
that by observing a longer historical axis, we can
enhance our own intellectual capacity.
Mimura: On the hypothesis that Nippon Steel
would be the next target of acquisition, we entered
into negotiations with Mittal. And, to be honest
with you, when faced with a final decision, I had
some sleepless nights as we worked to rebuild the
Steel products offering improved performances have a great affect on the competitiveness of Japanese industry.
High-strength steel sheets improve Electrical steel sheets imthe safety and energy-efficiency of prove the efficiency of hybrid
car motors.
automobiles.
High-strength steel plates allow for lager ships
and greater cargo weight. (Photo: Mitsubishi
Heavy Industries, Ltd.)
to be acquired. The term “white knight” comes from the image of
a knight who, riding a white horse, tries to help those in need.
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relationship between our two companies.
Shiono: The rise and fall of Japan’s steel industry
has a large impact, not only economically but also
psychologically, upon Japan’s entire social and industrial fabric. This is because Nippon Steel is so
deeply rooted in many aspects of Japan. During
the Italian Renaissance, when the bank operated
by the rising Medici family*5 in Firenze fell into
bankruptcy, the deepest unrest prevailed among
the citizens in Firenze. I believe that Nippon Steel’s
influence is comparable to that of the bank in
those days.
Mimura: Our principle is that Nippon Steel owes
its expansion to the growth of our customers and
the Japanese economy. Nippon Steel assumes
an important position in the nation’s “industrial alliance,” a wellspring of strength for Japan’s manufacturing industry. And, I believe that the fate of
Nippon Steel will influence all the manufacturing
sectors in the country. For instance, Nippon Steel’s
pursuit of higher performance in steel materials,
including higher strength and improved quality,
has promoted higher quality, lighter weight, and
greater energy savings in Japan’s motor vehicles.
Today, developments at Nippon Steel have positively influenced the international competitive power of Japan’s manufacturing industries, including
*5 Medici family: This family reigned over Firenze as its de
facto ruler and later became the emperor of the Grand Duchy of
Tuscany. By supporting Leonardo Da Vinch and other artists, the
family played a great role in the flourishing of Renaissance culture.
automobiles, machinery, and other dominant sectors, which in turn has been a key factor in directing technological innovation throughout the worldwide manufacturing industry. Clearly, the industrial
shakeout is not a problem for Nippon Steel alone.
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“Clementia (Tolerance),” a Practice Originating in Japanese Management Philosophy
Shiono: It seems to me that with the advance of
industrial and economic globalization, as exemplified by the reorganization of the global steel
industry, Japan’s enterprises must now stand firm
in confronting unprecedented management philosophies. Indeed, my occupation is similar to that
of the manufacturing industry in that its goal is to
create a “product.” But my product, or work, is the
result of many years of collaboration with publishers and editors who share basic philosophies and
principles with me. In that sense, I have misgivings about using only the logic of capitalism to
govern everything.
In economic circles today, the scope of business is expanded not by the efforts of management to create new business, but in a growing
number of cases, by management buyouts. For
my part, however, I believe that economic movement does not depend solely upon money or arithmetic.
Mimura: For the last couple of years, we have
vividly seen the power of investment funds sweep-
ing over the world based not on the strength of
“industrial capitalism” but of “financial capitalism.”
Through the resolute implementation of buyouts
and drastic rationalization, methods that are inconceivable for the conventional steel industry,
these funds have brought profitability to the financial structure of many enterprises in a short
period. No doubt, this management approach
constitutes a new business model, but the notion
of treating an enterprise
as a commodity is by
no means amenable to
Nippon Steel.
Shiono: At this stage, I
think that only China will
be certain to resist strategies that treat enterprises as commodities.
Silver coin produced in the
As a national policy, Republican period. “ConiChina imposes restric- yorn,” the family name of
Caesar means “elephant”
tions on the advance- in Carthage.
ment of foreign capital (Photo: Shinchosha)
Photo of Ms. Shiono with a statue of Julius Caesar
(Photo: Bungeishunju Ltd.)
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No. 363 March 2008
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into the country, including the prohibition of more
than 49% equity participation of foreign capital in
any Chinese enterprise. In this environment, what
countermeasure does the Japanese steel industry,
especially Nippon Steel, have in mind?
Mimura: I personally view this particular stage as
the second phase of reorganization efforts aimed
at restoring soundness to the steel industry. We
intend to maintain conventional defensive measures, including “giving primary consideration to
shareholders” and “increasing corporate value.”
While doing so, we also plan to implement “soft
alliances,” a business model unique to Nippon
Steel whereby Nippon Steel and its partners will
share values and pursue the merits of mutual cooperation as they hold in high regard each other’s
corporate philosophies and managerial independence. Currently, in addition to expanding partnerships with other steelmakers in Japan and Asia,
Nippon Steel is reinforcing its alliances with foreign steelmakers and other companies, as exemplified by increasing our equity participation in Usi-
nas Siderùrgicas de Minas Gerais S.A. of Brazil.
Lately, the EU is implementing defensive measures against a Russian energy-related enterprise
that is trying to take over a European company. I
believe that such steps are necessary in terms of
protecting national interests, although they may
not be desirable from the viewpoint of liberal economic systems. At any rate, Nippon Steel has considered and implemented anti-takeover measures
based on Japanese management philosophy.
Shiono: When considering anti-takeover measures, it is important to read the competition by
putting yourself completely in their place. Data
analysis and the running of simulations should
be implemented in-house and not farmed out to
a management consultant or think tank. Because
outside entities provide information as an integral
part of their own business practices, there are
cases when the content of their reports strays far
from the truth.
An essential condition for beating the competition is to circumvent their strategy. Hannibal
*6 Hannibal Barca (BC247-AD183) : A great Carthaginian
commander, who looked up to Alexander the Great as his master
of tactics. He harassed the Roman legions until he was defeated
in the Second Punic War.
Barca*6 was one of Carthage’s greatest military
commanders. His army was the foremost enemy
of ancient Rome and the only military force in history to win consecutive victories against Rome’s
military might. Hannibal gained victory by taking
decisive action that the Roman legion considered
unfeasible, such as marching his troops over the
Alps and battling deep within enemy territory.
When I write a history, I make it a rule not to
bring to me what I want to describe; rather, I go to
the object myself. Machiavelli says, “Imagination
is an important ability commonly deemed necessary in any field.” I consider it necessary to identify
myself with characters in their given positions, or
with others close to them in history, and imagine
how such characters would think.
President Mimura, what is your present approach to the current battle, “win at any cost” or
“anything but lose?”
Mimura: Our company exists for the benefit of our
stakeholders, including long-term shareholders,
our customers, local communities, and employ-
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ees. I wish to win at all costs and defend our company and our stakeholders against any takeover.
Although we do not have an all-embracing strategy against takeovers, I am firmly resolved to effectively combining a variety of measures to defend
the corporate value of the Nippon Steel Group.
With the key goals of “‘growth-oriented capital investment and financing,” “upgrading manufacturing capabilities,” and “the pursuit of cutting edge
technology,” Nippon Steel aims to be the world’s
No. 1 steelmaker in terms of comprehensive capabilities focused on the production of high-grade
steel materials with higher added value.
Shiono: I am greatly relieved to hear that. As long
as you go on the offensive, your company will not
be beaten, even in the worst-case scenario. By
thinking that everything is fine as long as you do
not lose, you actually do lose.
When seen from a broader perspective, Japan
is similar to ancient Rome and ancient Greece in
that it is a polytheistic nation with “myriads of gods
and deities.” Faced here in the 21st century with
a conflict between two major monotheistic powers believing in Christianity and Islam, I believe
that Japan can play a major role as a polytheistic
nation capable of showing tolerance to others,
irrespective of who they might be. In a time of
polytheism, the Romans dubbed this approach
“clementia (tolerance).” The ancient Roman policy
of assimilating the defeated and actively granting
them citizenship shows not only the tolerance of
the Romans but also demonstrates their philosophy towards governing a multiracial nation. The
day when such flexibility will be required is sure to
come again and on that occasion, Japan’s unique
strengths will come into play.
Brief Chronological Table of Ancient Rome
BC753:
509:
270:
264:
218:
216:
202:
146:
100:
58:
48:
46:
44:
According to legend, ancient Rome is founded
Rome becomes a republic.
Rome unifies the Italian peninsula.
Conflict with Carthage starts.
Hannibal Barca marches his troops over the Alps and into Italy.
At the Battle of Canne, the Roman legion suffers a crushing defeat.
At the Battle of Zama, Publius Connelius Scipio defeats Hannibal Barca.
Rome destroys Carthage.
Gaius Julius Caesar is born.
Caesar assumes the post of proconsul of Roman Gaul. The Gallic Wars start (-BC50).
At the Battle of Pharsalus, Caesar defeats Gnaeus Pompeius Magnus.
Caesar returns to Rome and launches reforms of Roman society and government.
Caesar is appointed “perpetual dictator.”
Caesar is assassinated by a group of senators that includes Marcus Julius Brutus.
31: At the Battle of Actium, the forces of Gaius Julius Caesar Octavianus
defeat the forces of Mark Antony.
30: Octavianus returns to Rome, initiating the age of imperial rule.
27: The Senate bestows the honorific title “Augustus” on Octavianus.
AD116: Roman Empire attains its greatest reach.
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Feature Story
It is important to always question the aptness of
one’s own ideas and to inquire as to their fairness
when battling for the truth. In doing so, we will arrive at a state of “tolerance” wherein we can lend
an attentive ear to opposing opinions.
Note: The sayings of Niccolò Machiavelli that appear in the
article are paraphrases offered by Ms. Nanami Shiono during
her discussion and are not direct translations from Niccolò
Machiavelli's works.
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