Evaluation of Companies’ Post-earthquake Efforts
Takafumi Ikuta, Senior Research Fellow
August 26, 2011 (Friday)
Three months have passed since the Great Tohoku Earthquake. The situation yet remains unchanged: approximately 90,000 people are forced to live as refugees and the entire country continues to wish fervently for the speedy recovery and rebuilding of the stricken region. Nevertheless, from what we saw of the confused political situation last year, it is unfortunately doubtful whether we can expect a rapid response from the government.
In recent years, private-sector corporations have taken on increasingly more important roles as solvers of social issues in international society. This doesn’t mean companies are expected simply to contribute to society in keeping with Corporate Social Responsibility (CSR). What is expected of a company is commensurate with its significant problem-solving assets, i.e. finances, technology, personnel, rapid decision-making ability, etc. Furthermore, as Michael Porter proposes in the concept of Creating Shared Value (CSV), business strategies which simultaneously realize economic and social values and thereby strengthen a company’s long-term competitive power are gaining much attention.(1)
Through the various efforts following the Great Tohoku Earthquake, Japan’s strong “on-site abilities”, including the activities of its private sector, have been re-acknowledged. Below, I introduce some of the results of a survey conducted by FRI at the end of May and look at what is being expected of private companies when Japan is faced with the urgent issue of rebuilding after the earthquake.
Expecting Private Companies to Contribute Using of Their Unique Characteristics
In order to investigate the expectations and evaluation of private companies’ activities after the earthquake, FRI conducted a national (except Iwate, Miyagi, and Fukushima prefectures) internet survey of 1030 respondents above the age of 20 from May 30-31, 2011.(2)
The support efforts of private companies (except power companies) towards rebuilding after the earthquake received an evaluation of “Appreciated” from 47.7% of respondents.(3) This is not an absolutely high rating, but it is high compared to the high ratio of “Not appreciated” responses received by the government, power companies, and media. Private companies also received the greatest number of “Neither” responses with 44.3%. It is possible that there was not enough information regarding private companies’ efforts available for people to decide one way or the other.
In contrast, 53.1% of respondents expect private companies to make greater efforts to aid rebuilding in the future than they have to date.(4) Overall, the lower the evaluation of a sectors’ efforts to date is, the greater the expectations for its future efforts. Despite this, more than 10% responded that they had “Little or no expectations” of the government, power companies, and media. When responses of “Same level of expectation” are included, 96.8% of respondents are expecting the same or better efforts from private companies.
Figure 1: Evaluation of rebuilding efforts to date
Figure 2: Expectations for future rebuilding efforts
In what particular areas are private companies expected to contribute? When we asked respondents this question with respect to 12 different areas, every area received a positive response rate of more than 60%, making it clear that much is expected of private companies. Within the various areas, more than 80% of respondents said they had expectations in “Supporting product circulation and opening sales channels in the stricken region”, “Hiring employees in the stricken region”, “Providing support supplies and in-house products”, “Developing technology and services in disaster prevention and energy fields”, and “Supporting recovery of existing industry in the stricken region.” It seems there are great expectations for private companies to contribute using their unique abilities in appropriate areas. This is shown straightforwardly through the greater expectations for supplies and products than for support money and donations. Furthermore, the fact that expectations for contributions toward the recovery of existing industry are greater than those for creating new industry shows that there is a strong desire to first restore things to their original state.
Figure 3: Areas in which people expect private companies to help rebuilding efforts
Applause for Companies’ Active Aid Efforts
Approximately 70% of respondents said they wanted to act favorably towards private companies which had passionately supported the post-earthquake rebuilding efforts. For example, 60.2% said they “Want to buy products/services” from such companies. Some respondents also said that they “Want to tell others of the company’s efforts” (20.1%) or “Want to invest” in the company (10.7%). These results show that properly publicizing one’s own efforts and activities relating to a social issue can lead to brand value improvement and increased profit opportunities.
In fact, 67.9% of respondents responded favorably towards companies publicizing their own active efforts towards rebuilding after March 11.(5) There is a general atmosphere among some Japanese companies that their contributions to society are a “matter of course” and that widely publicizing them is somewhat distasteful. However, this survey’s results show that when dealing with a social issue, such as post-earthquake rebuilding, Japanese society is by and large in favor of companies publicizing their efforts.
When we asked respondents to freely write the names of companies which have been passionate about supporting rebuilding, 37.5% wrote “Softbank.”(6) “Fast Retailing” (Uniqlo) followed with 17.3%. All other specifically written company names came in at less than 5%; these two companies’ favorable receptions clearly stand out.
In addition to Softbank’s well received corporate activities, Mr. Son (CEO) has gathered attention through individual activities such as making donations from personal funds, setting up the Natural Energy Fund, and the East Japan Solar Belt Initiative. Fast Retailing’s donations of funds and its own clothing have also been well received. What these two companies have in common are the proactive and rapid efforts of their top management, and the speed, ideas, and finances which they use to solve social problems, all of which are looked upon favorably.
The other 10 companies which received responses of more than 2% (Yamato Transport, Aeon, Lawson, Suntory, Nissin Foods, Panasonic, Rakuten, Toyota, Sony, Yamazaki Baking) are all large companies which provide products intimately connected with everyday life, e.g. food, retail, transport, appliances. As a result, these companies have always been familiar to consumers, and by sending support supplies to the stricken region they were able to make themselves visible quite easily. Companies which suffered damage to factories, offices, or their supply chain had increased opportunities to have their rebuilding efforts reported on in the news, which was no doubt related to increased recognition by consumers.
Table 1: Companies evaluated as making passionate efforts towards post-earthquake rebuilding
| Rank | Company | Response Rate |
| 1 | Softbank | 37.5% |
| 2 | Fast Retailing | 17.3% |
| 3 | Yamato Transport | 4.6% |
| 4 | Aeon | 4.1% |
| 5 | Lawson | 4.0% |
| 6 | Suntory | 2.6% |
| 6 | Nessin Foods | 2.6% |
| 8 | Panasonic | 2.5% |
| 8 | Rakuten | 2.5% |
| 10 | Toyota | 2.4% |
| 11 | Sony | 2.0% |
| 11 | Yamazaki Baking Co. | 2.0% |
Using National Disaster as a Springboard to Strengthen Social Problem Solving
Post-earthquake rebuilding efforts have only just begun, but when we take into account the nuclear power plant incident, these efforts will likely continue into the long term. I do not believe that private companies should become the main players in supporting the rebuilding efforts, but as I have mentioned above, there are great expectations of private companies to contribute using their own specialties, e.g. job security, opening sales channels, developing technology and services, and industry recovery. Furthermore, people are accepting of companies publicizing their own active rebuilding efforts, which may allow for prompting consumers toward favorable actions such as product selection.
The Great Tohoku Earthquake is a rare national disaster. It would be nice if Japanese companies were able to use this situation as a springboard to apply their own know-how to contribute to rebuilding efforts and take this opportunity to improve social problem solving as well as their own competitive power. In the future, citizens will become stricter in their evaluation of companies’ efforts and what they expect of companies and their contributions will change with time. There are limits to what can be accomplished in long-term rebuilding efforts if companies keep social contributions and business separate. Companies which are able to create an internal management system to improve by evaluating their own business performance from both social and business perspectives and release appropriate information to the public will become big presences once post-earthquake rebuilding settles down.
Notes
1) Porter published a paper entitled “Common Shared Value” in the Jan-Feb 2011 edition of the Harvard Business Review (Japanese version in DIAMOND Harvard Business Review, June edition).
2) We used survey respondents from Macromill. To avoid gender bias, we used the same number of men and women (515 each).
3) Total responses of “Greatly appreciated”, “Somewhat appreciated.”
4) Total responses of “Expect much greater efforts than those to present,” and “Expect greater efforts than those to present.”
5) Total responses of “Should definitely publicize”, “Should publicize somewhat.”
6) Free entry allows entry of up to three company names.
