There is only one page left on the calendar for 2012.
About one year ago, in my New Year’s message to our employees, I stated that this year’s business environment would be characterized by increasing obscurity and uncertainty, partly due to the debt crisis in EU, the slowing down of economic growth in newly industrializing nations, and the so-called “six-fold challenges” in Japan. Based on this forecast, I presented some points that I called on our employees to focus on. One of the points was “to improve your ability to deal with change.”
Looking back at this year, there is no denying that the world economy has been decelerating. While industrialized countries are confronted with the problems of financial reconstruction and economic improvement, newly industrializing nations are facing the problems of inflation control and growth maintenance. Each country’s monetary and financial authorities are forced to deal with these very difficult and ambivalent challenges. What is worse, Japanese companies are suffering from an increasingly severe business environment, owing to the yen’s continuing appreciation, the decrease in sales in the Chinese market in the latter half of this fiscal year, and concerns over rising energy costs. These external factors are not controlled by one company alone. However, we need to realize that, even though there are differences in the relative implications of these factors, no companies can avoid being affected.
As for society as a whole, we find that various global problems have emerged, such as those concerning environmental preservation, energy supply, and water resources. The evolution of information communication technologies and mobile technologies, as well as globalization, affect not only businesses but also many other aspects. In this situation, major changes are expected and we cannot forecast the future easily.
A passive way to deal with such changes is to establish a corporate structure robust enough to weather hardships, while an active way to do so is to regard such changes as business opportunities and reflect them in developing businesses. Actually, the other day, I urged our employees once again to improve their abilities to deal with environmental changes.
The Sumitomo Spirit, which is the Sumitomo Electric Group’s immutable philosophy, states the “Sumitomo shall manage its activities with foresight and flexibility in order to cope effectively with the changing times. Under no circumstances, however, shall it pursue easy gains or act imprudently.*” We must follow this principle in good faith.