Konosuke Matsushita

Panasonic founder Konosuke Matsushita was born on November 27, 1894 in Wasamura, a faming village that is now part of Wakayama City. His father was a small landowner and prominent member of the community, and Konosuke, the youngest of eight children, enjoyed a comfortable early childhood. But the family's fortunes turned when his father lost his property as a result of poor speculation on the commodities market, and the family was forced to leave their farm and move to a small house in the city.

To help support the family, Konosuke was apprenticed to a hibachi (charcoal brazier) store in Osaka a few months before he was to graduate from elementary school.
Still only nine years old, Konosuke said goodbye to his mother at the train station, and left on the long, lonely ride to the big city.

Konosuke's workday began at the crack of dawn with a careful cleaning of the store. When the shop was spotless, he polished the hibachi brazier while looking after his employer's children until it was, once again, time to fall exhausted into bed.

However, when his first payday finally arrived, the single five-sen coin he received seemed a veritable fortune, and made all the hard work worthwhile.

In less than a year, the hibachi shop went out of business, and Konosuke found a new apprenticeship at a store selling bicycles, which, at the time, were luxury items imported from the U.K. The bicycle shop also handled small metalworking jobs, and he quickly learned to use a lathe and other tools.

Treated as a member of his employer's family, Konosuke spent five happy years there.
Although Konosuke considered leaving his apprenticeship for a job that would allow him to take night classes and complete his education, his father convinced him to stay at the bicycle shop, saying, "The skills you are learning will ensure your future. Succeed as an entrepreneur, and you can hire people who have an education."

Around this time, streetcars were beginning to appear on the main boulevards of Osaka, and Konosuke's instincts told him that electricity would be the wave of the future. Anxious to become a part of this new field, he applied for a job at the Osaka Electric Light Company, leaving his apprenticeship at the bicycle shop at age 15.

His next big job was the wiring of a major theater. This complicated project took over six months to complete, with Konosuke working his team around the clock to keep on schedule. Although the project was an unqualified success, long hours in the unheated theater in winter sapped his strength, and Konosuke contracted pneumonia.

In prewar Japan, arranged marriages were the norm, and, in the spring of 1915, at age 20, Konosuke's sister introduced him to her friend, Mumeno. Within a few months the two were married, and Konosuke was shouldering the responsibility of a new household.

Konosuke's career continued to advance at the Osaka Electric Light Company as he was quickly promoted to higher paying positions, until, at the age of 22, he became an inspector - the highest post a technician could hope for.

Earlier, Konosuke had tried in vain to interest his supervisor in an improved electrical socket he had designed and built in his spare time. Now, dissatisfied by his job's lack of challenge, Konosuke's thoughts returned to the socket once again.

Remembering his father's advice about the advantages of being an entrepreneur, he left the security of his well-paid job on June 15, 1917 to set up his own small manufacturing company.

Konosuke's savings totaled less than 100 yen, scarcely enough for basic tools and supplies - power tools were, of course, out of the question. However, undaunted by his meager resources, he set up a shop in his tiny dirt-floored tenement with two co-workers from Osaka Electric Light Company and Mumeno's youngest brother, Toshio.

Sales of the socket were poor, and by the end of 1917, Konosuke's former co-workers pulled out, leaving only Konosuke, Mumeno and Toshio.

Mumeno's pawnshop register tells the story of months of hand-to-mouth survival.
On the brink of bankruptcy, the company was saved by an unexpected order for a thousand insulator plates for electric f

Now that business was picking up and Konosuke had money to invest, he rented a two-story home and launched Matsushita Electric Housewares Manufacturing Works that was to become Panasonic.

With this larger workshop on the ground floor, Konosuke was able to expand his production to include an innovative attachment plug and a two-way socket, both of which he designed himself.

These new products proved immensely popular, earning the company a reputation for high quality at low prices. And by 1922, Konosuke had to build a new factory and office to house his growing business.

In 1923, Konosuke recognized the huge market potential for an efficient battery-powered bicycle lamp. Although battery-powered bicycle lamps were already in existence, they were generally unreliable and tended to go dead in about three hours.

Determined to overcome these shortcomings, Konosuke spent six months designing a bullet-shaped bicycle lamp that would operate up to 40 hours without a battery change, but wholesalers were skeptical of his claims and refused to market it.

Konosuke decided to bypass the wholesalers and send samples directly to bicycle shop owners, challenging them to test the performance of his lamp for themselves.

This bold move resulted in a flood of orders, and wholesalers who had once refused to even talk to Konosuke were now eager to distribute his product.

Konosuke had begun developing a second generation battery-powered bicycle lamp - changing to a square-shaped design. While trying to think of a brand name for this new lamp, he came across the English word "international" in the newspaper.

Looking up the definition in the dictionary, Konosuke saw that within "international" was the word "national", meaning "of or relating to the people of a nation".

This struck him as perfect for a product that he believed every household in the country would one day be using. And, in 1927, the National brand was born.

At the time, many electrical products were considered luxury items, and were too expensive for most consumers. Konosuke set his sights on making electrical appliances affordable to the average consumer, and established a separate division to design electro thermal products, and to develop an electric iron with mass-market appeal.

Three months later, the National "Super-Iron" was developed. Although the electric iron market was estimated at 100,000 units per year, Konosuke ordered the manufacture of 10,000 National Super-Irons per month. He knew that mass production would lower the unit cost, and that many consumers would buy an iron as soon as the price was within reach, expanding the market. The National Super-Iron was launched at 3.2 yen, well below the five yen price tags of competitors' irons, and soon it proved to be another best-seller for the company.

In 1929, Konosuke created the Basic Management Objective and Company Creed to guide Panasonic’s growth. Commenting on the future of the company, he said, “ Our business is something entrusted to us by society. Therefore, we are duty-bound to manage and develop the company in an upstanding manner, contributing to the development of society and the improvement of people’s lives.”

The radio rapidly grew in popularity during the depression. However, radios at that time were expensive and unreliable. But Konosuke had his three-tube model radio ready in three months, and immediately it won first prize in a contest sponsored by the Tokyo Public Broadcasting Station.

To further promote the growth of this exciting new media, Konosuke purchased the rights to two key radio patents, releasing them to the public domain.

Konosuke did not show particular interest in any specific religion or sect, but he kept an open mind toward all ideas and suggestions.

In March, 1932, Konosuke was invited by a friend to spend a day at a popular Shinto shrine. During his visit, he began to consider the similarities between religion and business management, saying, "Human beings need both material and spiritual prosperity. Religion guides people out of suffering toward happiness and peace of mind. And business, too, can contribute by providing physical necessities required for happiness. This should be its primary mission."

As a result of his experience, Konosuke assembled his employees on May 5, 1932 to make an announcement that was to guide the company for decades to come. He said, "The mission of a manufacturer is to overcome poverty by producing an abundant supply of goods. Even though water can be considered a product, no one objects if a passerby drinks from a roadside tap. That is because the supply of water is plentiful and its price is low. Our mission as a manufacturer is to create material abundance by providing goods as plentifully and inexpensively as tap water. This is how we can banish poverty, bring happiness to people's lives, and make this world a better place."

Konosuke devised and instituted a system of autonomous management, dividing his company into three divisions - the first producing radios, the second handling lighting and dry batteries, and the third producing wiring devices, synthetic resins and electro thermal products. Each corporate division had its own administration, and was in charge of its own manufacturing facilities, allowing Konosuke to delegate more responsibility, and offering managers an opportunity to learn all aspects of their business - from product development through sales.

The company was now manufacturing more than 200 products, and with business continuing to grow rapidly, Konosuke felt it was time once again to expand.

So in July of 1933, the company moved into a new factory and Head Office in Kadoma, northeast of Osaka.

"Business is people" was one of Konosuke's favorite sayings. He had long believed in developing the capabilities of his employees, and in 1934, opened an Employee Training Institute at the Kadoma factory to offer primary school graduates a three-year course that combined the study of engineering and business.

In 1932, Konosuke set up a trade department to research and develop the company's international sales potential. With exports increasing, Konosuke incorporated the trade department as the Matsushita Electric Trading Company in August of 1935. At the time, this was an unusual move for an electrical products manufacturer, but he felt that as much attention should be devoted to overseas business as to domestic business, and that the company should carry out operations consistent with Matsushita's basic business philosophy.

Then, on December 15 of the same year, Konosuke incorporated the company and renamed it “Matsushita Electric Industrial Company limited.” Addressing his employees, he said “ Our company has expanded both in sales and its number of its employees. It has become a large manufacturing organization with a significant place in society. So, now , as we continue to grow, we have a responsibility to report our economic status to society at large.”

As war broke out between Japan and China in 1937, the militarization of Japan's economy intensified. Fearing that these changes would compromise the company's principles, Konosuke issued a series of directives clarifying his management philosophy. Then, in January of 1940, Konosuke gave his first management address, calling for a company-wide effort to maintain product quality, which had been affected by wartime material shortages.

With the start of the War in the Pacific in 1941, the company was pressured to accept to military contracts, which led to the establishment of the Matsushita Shipbuilding Company in 1943, followed by the Matsushita Airplane Company.

Finally, the war that cost Japan one quarter of its national assets came to an end. Panasonic had lost 32 factories and offices, mainly in Tokyo and Osaka. Miraculously, the Head Office and main factory were spared, but the company would virtually have to be rebuilt itself from scratch.

On August 16, 1945, one day after Japan's unconditional surrender, Konosuke called his senior managers together and announced plans to resume the production of consumer goods. Four days later, in an appeal delivered to all the employees, he said, "Production is the very foundation to our recovery. Let us reawaken the traditional Matsushita spirit, and address the task of rebuilding the nation and enriching people's lives."

Under the direction of General MacArthur, the occupation forces quickly instituted democratic reforms in Japan, including the establishment of labor unions.

Appearing at the first meeting of the company’s labor union, held in Nakanoshima Central Public Hall, Osaka, Konosuke quickly won the support of his employees by making it clear that he placed a high priority on their interests, and that the best policies for labor and management were bound to converge.

But the company’s recovery suddenly faced a major obstacle. The occupation forces issued several directives that halted the company’s operations and threatened its very existence. These laws were intended to break up the “zaibatsu” or family-controlled industrial and financial groups that had existed in Japan for generations. Outraged that such laws were directed at his company –an independent enterprise just 30 years old— Konosuke visited the Allied General Headquaters Office more than 50 times, and Executive Director Arataro Takahashi went to negotiate with the Occupation leadership nearly a hundred times.

Because the company had manufactured military hardware during the War, Konosuke was ordered to step down as president. But in an unprecedented move, the labor union, retail stores and company’s affiliates demonstrated support for him by a petition to rescind the resignation order, saying that Konosuke was indispensable to the company’s reconstruction. In a rare reversal of policy, in May, 1947, the Supreme Commander of the Allied Powers permitted Konosuke and the company’s directors to remain in the company.

Japan's postwar society was ravaged by inflation, food shortages and dishonest business practices. In November 1946, Konosuke founded an organization to address fundamental questions concerning the human condition. Based on the concept of "Peace and Happiness through Prosperity", he named this organization the PHP Institute, and began publishing the PHP Magazine the following year.

Panasonic was released from the last of its postwar restrictions in 1950.

In his annual management policy address in 1951, Konosuke announced that the time had come for the company to take its place in the international economic community.

He cautioned his employees to respect their cultural heritage as they geared up for operations on a global scale.

Visiting the United States to see for himself how American industry operated.
Konosuke noticed a huge gap between prosperous America and impoverished Japan, observing that, "An essential requirement for prosperity is a social structure that allows people to fully exert their individual talents and abilities."

In order to compete with the West, he realized that his company would need a better knowledge of electronics, and a more specialized approach to product development.

Convinced that the adoption of advanced Western technology was essential for Japanese postwar reconstruction, Konosuke began looking for an overseas business partner. In 1952, after very intense negotiations, Panasonic formed a technical cooperation agreement with Philips of the Netherlands, setting up Matsushita Electronics Corporation as a joint venture.

Although, originally, Philips negotiators demanded a high portion of the new company's sales in return for technical guidance, Konosuke countered that Panasonic was providing equally valuable managerial expertise, and responded with a demand for a management guidance fee. Finally, the two sides were able to come to a fair compromise.

In 1956, as the government was announcing the successful completion of the nation's economic reconstruction, Konosuke startled his work force and the industry by announcing an ambitious five-year expansion plan for Panasonic Corporation, calling for quadrupled annual sales, a 60% boost in the number of employees, and an increase in capital assets from three billion to 10 billion yen. "Success is guaranteed," he said, "because these numbers represent the desires of the masses, with whom we are making an invisible contract." Konosuke achieved these seemingly impossible goals in just over four years.

Japan's continuous economic growth brought a boom in sales of household electrical appliances, and heavy electrical equipment manufacturers entered the field, leading to stiff price competition. New appliances were appearing and making homes more pleasant and efficient. All consumers wanted a television, washing machine and refrigerator, or the "three holy grails" as they were popularly known. Konosuke had foreseen the dawn of the electrification age and worked to strengthen his sales network and stabilize his market share by establishing a close-knit network of retailers.

In June, Konosuke was decorated Commander in the Order of Orange-Nassau by the Queen of the Netherlands, and the ceremony was held at the Dutch Embassy in Tokyo.

This award was granted "for rendering a distinguished contribution and providing service for economic cooperation and for promoting friendship", which is the highest award in the Netherlands given to foreign nationals. This was given to Konosuke because of the technical cooperation agreement and the collaboration with Philips which contributed to promoting friendship between the two nations. Konosuke was the first to be given this decoration by the Queen of the Netherlands after World War II. He further contributed to promoting friendship between the two nations by establishing and becoming the chairman of the Japan-Netherlands Society of the Kansai in 1959.

Konosuke was decorated again later for his contribution in promoting friendship with other nations, including the Medalie De Honra Ao Merito Cultural Award from Brazil in April, 1968, the Commandeur de L'Ordre de la Couronne Award from the King of Belgium in October, 1972, and the Panglima Mangku Negara and the title Tan Sri from the King of Malaysia in February, 1979.

In 1959, ready to expand his business activities abroad, Konosuke founded MECA in New York as the first post-war overseas sales company. He urged his managers to adapt to their new host nation, and to apply themselves to providing products that Americans would appreciate. During this period, he also built factories abroad, including National Thai, the first overseas manufacturing company in 1961 and Matsushita Electric (Taiwan) in 1962.

At the annual management policy meeting for 1961, Konosuke delivered a rousing speech, proclaiming that the company had achieved the aims of its five-year plan and was entering a new phase of growth. After completing his address, he surprised the assembled by announcing his resignation, saying, "I have just celebrated my 65th birthday. I have been thinking that I should step down at an appropriate moment, and that time has now arrived. I will continue to support the company from behind the scenes as chairman."

In 1963, Konosuke appeared on NHK, Japan’s public TV channel, to speak with Prime Minister Hayato Ikeda. Konosuke advocated spiritual education and other means of developing human resources, which he stated were vital to the nation’s future. His comments proved tremendously popular with the public.

As word of Matsushita Electric's success began to spread abroad, Konosuke Matsushita was beginning to be recognized as one of the world's great entrepreneurs. Numerous foreign VIPs came to tour the company, including U.S. Attorney General Robert Kennedy, Indian Prime Minister Indira Gandhi, and Yugoslavian President Tito. Konosuke personally showed each of them around the company facilities, often engaging them in a stimulating exchange of ideas.

The foreign media soon turned their attention to Panasonic and its founder.

In February 1962, Konosuke himself was featured on the cover of TIME, America's most popular weekly news magazine. And in 1963, Konosuke and Mumeno Matsushita attended what was billed as "the party of the century," the 40th anniversary celebration of TIME magazine in New York, joining other cover celebrities there.

Moreover, in September of 1964, Konosuke was featured in LIFE magazine, and was described as a "top industrialist", "the biggest money-maker", "philosopher", "magazine publisher" and "best-selling author". The media embraced Konosuke Matsushita and brought Matsushita Electric into worldwide prominence.

In the autumn of 1963, Konosuke participated in the 13th International Management Conference sponsored by the Council for International Organization and Science in New York. In his presentation on his management philosophy, his emphasis on management concepts, fair competition, and co-existence and mutual prosperity received a warm response from attendees.

As Panasonic's profits plummeted for the first time since 1950,Konosuke invited the presidents of all Panasonic sales companies and distributors throughout Japan to a three-day conference in the Atami hot spring resort, south of Tokyo.

The sales companies and distributors blamed the corporation for their economic troubles. However, Panasonic executives denied responsibility, claiming that poor management of the sales companies was the problem. To avoid a total breakdown in communication, on the final day, Konosuke addressed the tense gathering, saying,
"I understand your position, and we will argue no more. Our company is clearly to blame, and, with your assistance, I will try my best to rectify this situation." The impassioned plea brought a hush to the audience, and then, acknowledging Konosuke's sincerity, those assembled vowed that they were now ready to work together.

At the close of the conference, Konosuke personally presented placards to all the assembled presidents, on which he wrote the words, "Co-existence and Mutual Prosperity". After the conference, Konosuke stepped out of retirement to temporarily take over as Director of the Corporate Sales Division, totally revamping the corporation's sales and distribution system. He reorganized existing sales companies, allowed direct transactions between sales companies and product divisions, and created a credit plan for consumers. With these measures in place, sales gradually began to improve.

In 1961, Konosuke had warned that Japan's rapid economic growth was excessive, and he saw that it was essential to create a strong internal structure capable of surviving the economic crises that might lie ahead. Just as Konosuke had feared, the Japanese economy entered a recession in 1964, following a boom sparked by the Tokyo Olympics which were held that same year.

 Konosuke advocated the idea of "dam management" just as the Japanese economy was reaching a crucial turning point, in February, 1965, at a seminar in Okayama organized by the Kansai area business community.

Konosuke's dam management offered a way to keep an enterprise on an even keel in times of unexpected changes in business conditions, and included useful techniques for achieving the goal of maintaining steady growth at all times.

A business can maintain steady growth, and protect itself against changes in the external environment, by erecting a dam and reservoir in every part of its management, such as an "equipment dam" and a "capital dam" that provide insurance for stable growth.

In July 1973, as the company was marking its 55th anniversary, Konosuke retired from active service, assuming the post of Executive Adviser. He said, "I am almost 80 years old. In the past 55 years, I have accomplished everything that I set out to achieve, and I’d like to pat myself on the back for job well done" He then thanked his employees for their support, and encouraged them to meet the challenges of the future.

Konosuke began to devote more time to developing his philosophy and to writing. He published a popular book of insights into the nature and changing character of humanity, entitled "Thoughts on Man".

Then, in 1974, he published "Japan at the Brink," in which he advocated better education and expansionist economic policies to lead Japan out of the recession that followed the 1973 oil crisis. The book became a bestseller with over 600,000 copies sold.

Konosuke believed that, in the 21st century, Japan and other Asian countries would be generating much of the world's wealth, and he enthusiastically promoted new political and economic ideas, such as a tax-free state and other systems that would prepare Japan for the role it would play.

He visited the People's Republic of China with the invitation of the Japan-China Friendship Association, where he talked with government officials about his interest in that nation's development, telling them that the 21st century will be a time of prosperity for Asia, and that it was imperative that Japan assist in China's modernization. As a result of his visit, Panasonic sponsored an electronics technology exchange conference in Beijing.

In 1978, Konosuke stated that, "If we set our sights on material and spiritual abundance for our citizens, we must also train teachers for the task." So he spent 7 billion yen from his private funds to establish the Matsushita Institute of Government and Management, which opened in April 1980. The purpose of the institute was to search for basic ideas that would contribute to the progress and development of Japan in the 21st century, and develop leaders capable of making the ideas a reality.

In 1985, Konosuke was called on to present the first Japan Prize, an award that he, himself, was instrumental in establishing. The Japan Prize honors progress in science and technology, and contributions to peace and prosperity.

On April 27, 1989, at age 94, Konosuke Matsushita, founder of Panasonic, departed the world he had changed so much.