Abstract

Canon

The case discusses in detail the social responsibility initiatives undertaken by the
Japanese digital imaging equipment giant - Canon Inc. The case describes how Canon's corporate
philosophy - Kyosei - guided the company's operations and its behavior towards its employees,
partners, customers, competitors, environment and the communities in which it operated.

It elaborates the way in which Canon practiced the principles of Kyosei. By practicing
the philosophy, Canon was globally recognized as one of the most socially responsible corporate
citizens.

Issues

The case is structured to achieve the following teaching objectives:

 Get insights into the principles of Kyosei and the manner in which a company can
succeed by implementing those principles
 Understand the significance of a corporate philosophy to accelerate the social
responsibility initiatives of an organization
 Learn about the benefits that a company can reap by implementing Kyosei
 Study the corporate social responsibility initiatives of Canon over the years, including
environmental conservation and community development efforts
Introduction

In January 2002, the Japanese digital equipment manufacturer - Canon Inc. (Canon),
established its Global Environment Promotion Headquarters (GEPH), as part of the company's
continuing efforts towards working for environmental conservation. Following the establishment
of GEPH in Japan, Environment Promotion Committees (EPCs) were constituted in Asia, the
Americas, Europe and Oceania to supervise Canon's environmental conservation activities in
these regions.

The setting up of the GEPH and EPCs was just one of the many environment protection
and community development initiatives taken up by Canon over the years. All these initiatives
were an integral part of Canon's corporate philosophy - the Kyosei. Though Canon had been
informally practicing it ever since it began operations in 1937, its management formally
conceptualized Kyosei in 1988 and committed itself to follow the principles.

Kyosei served as a guide to Canon about how it should behave with its employees,
customers, suppliers, competitors and the community in which it operated. To ensure that the
principles of Kyosei are uniformly adopted and followed throughout the organization including
its global subsidiaries, Canon formalized its code of conduct (Refer Exhibit I).By successfully
employing the principles of Kyosei in its regular business activities, Canon demonstrated that a
corporation can be successful not only by focusing entirely on its financial commitments but also
by addressing issues concerning the operating environment and the society at large. Canon also
addressed issues concerning the environment by keeping a check on air and water pollution in its
manufacturing activities. The company had developed an Environmental Charter way back in
1990 (Refer Exhibit II).
Canon's Journey towards Corporate Kyosei

Kyosei was an age-old Japanese philosophy, whose roots traced back to the sixteenth
century. Canon's management attempted to re-invent the philosophy in the light of modern
Business Ethics. The management developed Kyosei as a general concept, whose applicability
was not restricted to Canon alone, though it was made clear that at Canon, it would be pursued
with absolute sincerity and dedication.

According to Canon, businesses go through five stages of evolution in the course of

implementing Kyosei. These stages included the establishment stage, the employee partnership
stage, the stakeholders' partnership stage, the globalization stage and the government partnership
stage.

Canon - Embracing the Principles of Kyosei

In the late 1980s, Canon's management stepped up the implementation of Kyosei in the
company. The principles of Kyosei formed the basis of framing several policies and management
concepts (Refer Exhibit III). The impact of Kyosei was felt at every stage of Canon's operation,
right from the R&D and product development to the company's social responsibility initiatives....

Recent Social Responsibility Initiatives

The reflections of Kyosei could be prominently noticed in the way Canon addressed
issues relating to the society, environment and its own product development. The company made
significant efforts to contribute towards the development of the society in which it operated. For
instance, in 1997, in a bid to promote education in South East Asia, Canon started a book fair
where books and CDs of Canon's employees were sold at negligible prices.