ANALYZING RITSUMEIKAN UNIVERSITY

Module Project 21st Century Business

Author: Richard Miller

Date: July 20th 2005
Publication University of Liverpool MBA-CB-050609-04
TABLE OF CONTENTS

Chapter 1 Introduction________________________________________________ 3

Chapter 2 Strengths and Weaknesses_____________________________________6

Chapter 3 Threats and Opportunities _____________________________________8

Chapter 4 Financial analysis ___________________________________________10

Chapter 5 Strategic Issues _____________________________________________13

References and Works Cited__________-_________________________________15

CHAPTER 1 INTRODUCTION

The Ritsumeikan Academy

Profile of an ever-growing educational institute [1]
~

HISTORY
Ritsumeikan Academy first started in 1868 as a law school by Prince Kinmochi Saionji .
Later it developed into a full-fledged private university with full accreditation by the
Japanese government (this took place in the early part of the 20th century). By the end of
the 1980s it found itself with falling enrollment and fewer students taking the entrance
exams. [0]In order to over come this, the university took several proactive steps to change
the direction that things were going. One thing that they did was to raise the academic
standard and increase the difficulty of entering the university. They did this two ways; by
making the entrance exam more difficult, and by requiring the entering students to have a
stronger academic record. While this may have harmed the short-tem enrollment, it had
the opposite effect long term. [1] By raising its standards it started to increase its prestige
in Japan. In today’s newspaper it is listed as the ‘top private university in Western Japan
for policy science’ [2]. It also renovated and built new buildings on its main campus
(Kinugasa), added several other schools and broadened its scope of students. The students
that the university sought were those who had spent time away from Japan (know as
returnees), older students and graduate students. Along with this, the number of
international students and scholars has increased. Today, the university is known as one
of the best in the Kanasi region-KAN-KAN-DO-RITS is the acronym that many people
reefer to when talking about the 4 best private universities in the region (of 20 million
people and economy similar in size to Canada’s). In addition, they are growing, with a
new law department building and an expanded junior high school.

Ritsumeikan has a history of liberalism (it proudly remembers the fact that it “accepted
seventeen professors who were forced by the government to leave Kyoto Imperial
University for their pacifist activities in the 1930’s. In addition, Prince Saionji was an
‘internationalist’.

The Origins of the name "Ritsumeikan"

 The word ritsumei comes from a passage in the Jinxin chapter of the Discourses of
Mencius. This passages states that:
"Some die young, as some live long lives. This is decided by fate. Therefore, one's
duty consists of cultivating one's mind during this mortal span and thereby establishing
one's destiny."

Ritsumeikan thus means the "place to establish one's destiny." [3]

THE STRUCTURE
The university system is made up of 3 junior high schools/ high schools (in Hokkaido and
Kyoto) , the main university with two campuses in Kyoto making up 30,000 students and
an international school that is in . It is known as APU (located in Oita Prefecture), and it
describes itself as; “With approximately half of its students coming from over 50
different countries, APU is a “multicultural community.” APU takes the following as its
ethos: “freedom, peace, and humanism,” “international mutual understanding,” and the
“creation of the future of the Asia Pacific.” [4]

The university is made up of several departments, an international university, a junior

high school and a high school. The departments of the main university are;
Law, Social Sciences, International Relations, Policy Science, and Letters as well as
Economics, Business Administration, and Science and Engineering

THE CULTURE
In order to describe the culture at the university, (and what those of us have
to endure) a very brief introduction to some of what I think might be
relevant cultural aspects of Japan should be attempted. Japanese tend to do
things through consensus, with meetings a regular part of group activities;
“unity in which all people aim for the same goal is strictly enforced” [5].
This can go from small corporations to large one’s, as well as universities.
While there is consensus, there is a head of the university, and each
department has its’ own head “the social structure of Japan developed a
vertical organization that stresses one’s place within the group and in which
one’s rank or status is clearly distinguishable, often based on seniority within
the group” [5]. Therefore, getting things changed and direction ratified is
often seemingly an exercise in democratic and bureaucratic processes,
however the decision has been made before it was ever discussed. In
addition to the Japanese aspect, the fact that it is a university puts it into a
slightly different category. The culture of many universities can often be
described as what David Damrosch called “a universe of sorts. . .a universe
obeying its own laws and deriving from its own history, intimately linked to
current social realities at some points but bafflingly distant from them at
others” [6]. It is these two cultural perspectives that the university operates
within.

STAFF
As for the faculty at the university, one thing that the university has done with respect to
the instructors is to divide the type of contracts that propel are issued. There has been a
big cutback on the number of tenure track positions, with non-tenure five-year term
contracts the norm. All instructors are placed into one of 6 positions sennin (tenured),
jokin koshi (full time lecturer, five year term), shokutaku (special full time, five year
term), hijokin (part-time, yearly) and visiting scholars. The lower number of tenured
positions has allowed the university to be rather flexible with the teaching staff, and to
introduce change into the system. In addition, they are able to save money because the
part-time and non-tenure positions are so much lower paid. It does lead to lower loyalty
with the teachers. I have seen several teachers leave half way through the year to get
another job. Although with the number of qualified teachers looking to work there, filling
a vacancy does not seem to be a problem (there were more than one hundred applicants
for a recent shokutaku position).

OTHER INFORMATION
The budget for the university, for 2004 was about 90 million US dollars.
There were 956 faculty and 777 staff. The student body was made up
of 31 275 undergraduate, 2 407 graduate students and 540 foreign
students at the university. At APU there were 4 898 students, and at
the high schools/ junior high schools there were 4 946 students. Finally,
there were 264 383 alumni from the university[7].
Chapter 2 Strengths and Weaknesses

The first part of the acronym SWOT is top describe the organization’s strengths and
weaknesses. These are generally thought to be what the organization has internally to
help it deal with opportunities and threats in the external environment.

STRENGTHS

The name of the university is perhaps one of its biggest strengths (it has become a brand
name). This is perhaps, at least in some part, to the rank of the university; as recently as
June 22, 2005 it was ranked 11th overall in public administration. [8] The university is
known as one of the best in the Kanasi region-KAN-KAN-DO-RITS (Kangaku, Kansai
Daigaku, Doshisha and Ritsumeikan) is the acronym that many people reefer to when
talking about the 4 best private universities in a region of 20 million people and economy
similar in size to Canada’s).[9,10] The university was ranked number one in both foreign
lectures and foreign instructors by the Asahi newspaper for 2005 [11] [12] In addition, the
university has quite a long 136 year history.

Another is the diversity of the Ritsumeikan University system; from elementary school to
graduate schools, spread from southern Japan (Asia Pacific University in Southern
Honshu to the high school in Hokkaido) has attracted a lot of positive attention. The
university is a private university system, and that allows the university some leeway with
policy and direction (all within the boundaries of the Ministry of Education, of course).

A further strength that the university has is the infrastructure of the university in both
assets as well as human resources. It has expanded and been upgrading several things in
recent years, from renovated buildings and building new buildings to having the entire
university wireless. In addition, there are a large number (1286) of instructors, lecturers
and professors working at the university-all with at least a master’s degree. The
university also increased the number of foreign language instructors and built up a
number of ties with foreign universities (including American University in Washington
DC and UBC in Vancouver). These steps helped to build a bigger profile for the
university within Japan. [IBID]

Finally, the size of the university system allows students to choose from a variety of
schools. These include various faculties as well as various levels of education. The levels
run from junior high schools, high schools, Ritsumeikan Asia Pacific University (APU),
Ritsumeikan University and the recently acquired elementary school. The 2004
enrollment stood at 43,141.

WEAKNESSES
There are several areas that can be considered both strengths and weaknesses; as well a
being a strength, being a private university is also a weakness. There is the cost of
attending a private university; it is considerably more expensive than a public university
and the perception that it is not as prestigious as a public university. In addition, the
university has not produced a single prime minister, or many political leaders (this
compared to a private Tokyo University and Waseda, which have produced numerous
Japanese prime ministers and political leaders). Therefore there is a lot of competition for
the best and brightest students that private universities must face. Of the 702 universities
in Japan, 526 of them were private, versus 176 that were private. Out of the 2,803,980
university students the vast majority (2,061,113) were in private institutions. [13]

Another strength that could also be construed as a weakness is the system of having
junior and senior high schools. This allows students from the high schools within the
school system to freely enter the university. The problem is that the students from the
Ritsumeikan High Schools are often not at the same academic level as the students who
entered from the general population. The dichotomy between the two may lead to a
lowering of the academic standards. The level of foreign language students over the past
two years has dropped in several departments. [14] This could lead to very serious
internal policy problems and competition between departments for the better students.
Even now, it is well known that the Law Department is much more difficult to enter than
the Arts Department (though this has been true of universities that I’ve studied at, it
seems to be particularly striking here). [IBID]

An internal weakness that has come up recently has been labor related with some of the
lecturers. This is due to the limited time contracts that are offered to the teachers among
other working conditions. Recently there have been a number of union activities that have
been documented in the Japanese press. Aside from disgruntled employees this has a
tendency to look bad in the Japanese press. [15]
Chapter 3 Threats and Opportunities

The second part of the SWOT represents the opportunities and threats that exist in the
external environment.

OPPORTUNITIES

While the population of Japan is falling, the university has positioned itself to attract
more students. There are more students from the school system that can be brought into
the university from the (new) elementary school, expanded junior high school and
existing high schools. As the university has improved the brand name, the number of
students from the general student population has increased. In addition, the area of older
students returning to study (known in Japanese as Shakaijin) is also increasing. With the
aging of the population, this leaves plenty of room for expansion with this type of
student. Traditionally in Japan, the population of university students were homogenous in
ages, between the ages of 18 and 24. Recently more and more working people have
begun to return to university to study. Finally, with there are more and more Japanese
high schools sending students overseas to study for a year, individual families sending
their children overseas for a time and employers sending entire families abroad. This has
greatly increased the number of returnees that are now in the general population. As
Ritsumeikan has special classes and programs for this type of student, they are sure to
expand in numbers. [16]

A unique opportunity that is open to Ritsumeikan comes from its long history with law
pedagogy. The school has a long history of having a strong law department, and with the
new changes in the system of certifying lawyers in Japan, this can become a major asset
in the near future. Up until recently, the bar exam allowed only 3% of candidates to pass
the exam and become lawyers. This figure was revised last year, allowing for
‘substantially more’ candidates to become lawyers. In response to this opportunity, the
law department acquired a property about two miles from the main campus in Kyoto and
they are now proceeding to develop the property with a new school.

THREATS

The biggest threat is the education market and the falling population in Japan, combined
with 14 years of slow to negative economic growth, which has had an overall detrimental
effect on the educational institutions all over the country. Everything from kindergartens
to graduate schools has felt the population decline. While this is more an external threat,
it leads to a problem of falling enrollment. The drop in enrollment in some educational
schools is quite dramatic, particularly the expensive private sector schools (of which
Ritsumeikan is a part). There has been a steady decline in the total number of college and
university students since 1995 in Japan. [17] The university has continually increased its
student body while the rest of the country has gone in the opposite direction.
Threats from other universities are again an external threat that become internal when
competition changes the standards. There are a number of institutions that are competing
for the dwindling stunned population. For example, Doshisha is already allowing more
returnees to enter the student population there. [18] In addition, there are more and more
returnee programs in other universities like Konnan University. [19] As the success of
Ritsumeikan becomes well known, they can expect more competition from other
institutions trying to implement some of the successful strategies that they have worked
at Rits.
Chapter 4 Financial analysis

Financial Statements for Ritsumeikan University, 2002/2003

BALANCE SHEET (unit: thousands of yen)

ASSETS 2003 2002

Non-current assets 214,433,977 209,438.835

Property and equipment 174,115,396 167,084,284
Other non-current assets 40,318,581 42,354,551
Current Assets 35,913,006 37,906,153

Total 250,346,983 247,344,988

LIABILITIES

Long-term liabilities 18,859,405 18,124,731

Current Liabilities 14,588,485 23,449,286

Total liabilities 33,447,890 41,574,017

Trust Equity 218,472,076 206,504,427

TOTAL 250,346,983 247,344,988

 INCOME STATEMENT (unit: thousands of yen) [1]

INCOME 2003 2002

Student fees 43,670,122 41,420,898

Processing Fee’s 3,531,266 3,363,054
Donations 1,773,790 1,205,759
Subsidies 6,166,368 6,117,481
Investments 309,869 319,787
Gains from Sale of assets 379,312 0
Income from business 1,853,867 1,638,891
Miscellaneous 929,735 893,078

TOTAL 58,654,289 54,958,948

EXPENSES 2003 2002

Personnel 23,663,106 22,425,287
Research 19,090,204 17,716,522
Maintenance 4,153,666 3,658,024
Interest 263,207 402,405
Depreciation & Asset stripping 355,984 1,626,344

TOTAL 47,526,167 45 828 582

Net income 11,128,122 9,130,366

Financial ratios
RATIOS
2003 2002
Current Assets 35,913,006 37,906,153
Current Ratio ------------------ -------------- =2.46 -------------= 1.62
Current Liabilities 14,588,485 23,449,286

Leverage Total Liabilities 33,447,890 41,574,017

------------------- -------------=0.15 --------------=0.20
Trust Equity 218,472,076 206,504,427

Return on Equity Net Income 11,128,122 9,130,366

--------------- --------------=4.4% ---------------=3.7%
Trust Equity 250,346,983 247,344,988

RATIOS
The current ratios are quite solid. The biggest change from 2002 to 2003 was due to the
debt retirement. This had a fairly large effect on the current ratio.

Leverage: Because the leverage ratios are well below one, there is little debt to equity.
There was a major reduction of debt between the two years, bringing the ratio down
further.

The return on equity seems low, but a couple of things must be kept in mind. Restrictions
on funds used by the trust limit the amount of debt the university can have. In addition,
the return in Japanese banks or government bonds is less than one percent in this market.

Other information;
While there was about a 1% increase in the number of students (42,677 in 2002 versus
43,141 in 2003). During the same period, there has been an increase in the number of
faculty by 15% (956 in 2002 versus 1,116 in 2003). While this has led to higher personnel
cost (a five percent increase), it has also led to a lower student/teacher ratio (35.79 in
2002 versus 30.58 in 2003). While it seems high when compared to American
universities [20], it is a bit below many of the other universities in Japan. [21] In addition,
other assets relevant to a university that Ritsumeikan has are 2,304,083 books, 4,989
computers and information equipment and 504,831 square meters of building space (an
increase of 29,710 square meters from the year before) on 2,051,481 square meters of
land (a decrease after 11,371 square meters was sold).

Being a private university, the largest source of revenue, by far is the tuition (and
processing fees) from the students (it represented approximately 80 percent of the
revenues for 2003 and 81 percent in 2002). Note that there has been some resistance to
the tuition increases from the students. Protests have disturbed classes on at least one
occasion this academic school year. There are more increases scheduled for the 2006/7
school year.
Chapter 5 Strategic Issues

Ritsumeikan, being a university, perhaps a look at what kind of organization it is would

help clarify the parameters that it finds itself in.
The university system can be described as the following;
“the university has played an important role in the development of thought and culture. It
is at least as old as the societies formed during the Middle Ages upon the model of
craftsmen's guilds that furnished mutual protection for teachers and/or students. It has
continued, not entirely uninterrupted, to its present highly developed and Americanized
mien as big business and clearinghouse of ideas. Nevertheless, the university is
unparalleled as an agent of innovative thought, creative dialogue, and sociological
change. . .” [22]
Ritsumeikan has declared that it is a university with a liberal history, and therefore a
liberal institution. From this background and within the Japanese cultural norms, it has at
least attempted to develop in a very western framework (having been founded shortly
after the opening up of Japan during the Meiji era) and it has seemed to have worked
within those parameters.

While a successful institution, it still faces threats. The biggest external threats area a
combination of declining population along with an economic slump that continues in
Japan. However, the financial future of the university looks bright. The low debt ratios
and increasing revenue have left the university with plenty of room for problems. The
financial situation of the university is quite strong as they have plenty of reserves to last
over the next several years in the event of any economic problems that might hit the
university.

In addition, there are several areas that the university has room for expansion. The new
Law Department is being set up to take advantage of law school grads. The letters and
international relations departments are expanding shakaijin (mature students) and
returnee’s classes. In addition, the recent purchase of the primary school has had the
school system set up to educate some students form the earliest age to graduate school. In
addition, there is the expansion of language teaching (increased number of language
teachers). The increased competition in Japanese competition seems to have led the
university on the path that it has taken. The aggressive expansion program that has been
implemented led to an interesting and dynamic institution.

A fairly new and successful area that the university has spent time and resources has been
the increased connections with foreign universities, the expansion of its international
curriculum and the increases in foreign students. This is another example of the success
that the administration has had with attempting new things; the APU MBA programs is
rated one of the best in Asia [11]. With English language universities there are the
international exchanges with the University of Oklahoma, UBC, University of Boston
and American University. As far as other languages, there are several exchanges set up
with Chinese universities in Shanghai and Beijing and Spanish exchanges with the
University of Mexico. These changes were planned well in advance and have contributed
not only to increased enrollment, but to a higher visibility in Japanese society for the
university, which is very important in this environment.

In order to continue on with its expansion and exploit its opportunities and overcome its
threats, it needs to continue to keep the academic standards of the university and resist the
temptation of allowing students with less academic ability to enter the university simply
because they can pay. As the population of Japan continues to decline along with post
secondary education enrolment, this temptation may become more difficult to resist. By
continuing to aggressively expand into new markets and adapt to the changes that are
taking place, they seem to be on course to do that.

Finally, the university should also objectively examine the situation with the lecturers. By
inviting labor strife they are defeating several purposes. These include the alienation of
both students and teachers as well as risking the reputation of the university; all for a
relatively small sum of money (in order to bring the salaries on par with other
universities). [23]

In conclusion, there are a number of changes taking place in the post secondary education
systems in Japan today. There have been numerous failures of some institutions, and
Ritsumeikan is an example of one institution that seems to be thriving on change. With
continued forward looking, there should be further dynamic growth with this university.
REFERENCES AND WORKS CITED

[0] http://www.edunavi.net/d_shakai/univ/info_ritumei.html
[1] http://www.ritsumei.ac.jp/
[2] http://www.apu.ac.jp/home/index.php?sel_lang=english
[3] Daily Yomiyuri Japanese version June 22nd, 2005
[4] http://www.ritsumei.ac.jp/eng/profile/history/index.shtml
[5] Osamu Ikuno, Roger Davies The Japanese Mind:
Understanding Contemporary Culture
Tuttle, Tokyo: 2002
[6] We Scholars: Changing the Culture of the
University
by David Damrosch Harvard University Press, Cambridge
1995 pp 18 and 19
[7]
http://www.ritsumei.ac.jp/eng/profile/datafile/2003/index.sht
ml
[8] The Daily Yomiyori June 22, 2005.
[9] http://www.webometrics.info/Google_Position_by_Domain.asp?country=jp
[10] http://www.nucba.ac.jp/en/nucb/asahi-shinbunsha.html
[11] http://www.mext.go.jp/english/statist/04120801/005.pdf
[12] http://www.ritsumei.ac.jp/eng/profile/index.shtml
[13] http://www.mext.go.jp/english/statist/04120801/008.pdf
[14] Escandon, Arturo ‘Education/learning Resistance in the Foreign-Language
Classroom: A Case Study: Ritsumeikan University Presented September 15th, 2004.
[15] www.asahi.com
[16] http://www.ritsumei.ac.jp/eng/profile/index.shtml
[17] http://www.mext.go.jp/english/statist/04120801/008.pdf
[18] www.doshisha.ac.jp
[19] http://www.konan-u.ac.jp/
[20]
http://pirate.shu.edu/~jonesedm/Class%20Size%20Statement/comparison_of_student_tea
cher_ratios.htm
[21] http://www.up.edu.ph/forum/2000/06/mayjune/survey.htm
[22] http://www.leaderu.com/marshill/mhr09/univ1.html
[23] http://www.mutantfrog.com/2005/07/09/foreign-teacher-unionists-face-ax/