Karelova L. The Principles of Buddhist and Confucian Ethics...

The Principles of Buddhist and Confucian Ethics in the Formation of Corporate Social Responsibility in Modern Japan

by Lyubov Karelova

The essay points out that the problems of corporate social responsibility (CSR) concern not only the spheres of economics, administration and management, but also culture, religion and philosophy. Studying the corporate slogans of some Japanese companies as an illustration, the author traces and analyses cognitive paradigms and traditional values, which are connected with the formulation of social responsibility ideas in Japan. The author considers that import of principles and mechanisms of CSR to the Japanese ground is facilitated by the fact that these new technologies are perceived as an extension of their own tradition. Japanese people do not only perceive CSR norms from outside, but also quite loosely formulate within their own sociocultural space.

Key words: corporate social responsibility (CSR), Japan, Buddhism, Confucianism, Practices of Bodhisattva, Ishida Baigan, Shibusawa Eiichi

The concept of corporate social responsibility (CSR) today has become an integral part of global culture. The interpretation of the implementation of this concept in different cultures takes place mostly in social and economic spheres, essentially from the perspective of competitiveness and sustainable development. Since the cultural aspect of implementation of CSR, in particular, the problem of continuity of sociocultural patterns and values in the context of expansion of general rules and regulations, usually lie outside the scope of scientific interests, the author expects this article to fill the gap in existing research.

Ideas of corporate social responsibility have come to the front position in the theory and practice of American and European business since 1970's. In the meantime, they started to strike a chord with Japanese business society as well.

The original meaning of «corporate social responsibility» was responsible behavior towards different groups of stockholders, however, immediately after this notion appeared, its connotation became much wider, also including consideration for the interests of employees, local communities, ecological problems, climate change etc. In such context management methods imply the systems and procedures to encourage openness and transparency of the organization in its socioeconomic activity, and are aimed at sustainable growth of society not only in the present moment but in future as well. This common terminology in different countries is enriched with its own unique content and exists alongside with other concepts developed in national languages.

Comparative research in business ethics indicates that there are cultural patterns, cognitive paradigms and values that exert influence on its terminology and ways of conceptualization. Therefore, the matter of social corporate responsibility does not only deal with economic, management and administration spheres, but also culture, religion and philosophy.

The term "corporative social responsibility" became widespread in Japan only in the 2000s; however, the idea of social responsibility of entrepreneurship in its relation to society has existed in Japanese sociocultural tradition since the appearance of the first trading houses.

Business responsibility became a widely discussed topic since the beginning of 90s after the collapse of bubble economy. In 1991 Japan Business Federation (Keidanren) adopted the "Charter for Good Corporate Behavior"[1]. The series of corporate scandals in the beginning of 2000s, which lead to the bankruptcy of a number of companies and undermined confidence in business, raised the problem more acutely. In fact, the turning point that started CSR management era was the publication of "Market Evolution and CSR Management" on the 26th of March, 2003, also known as the "15th Corporate White Paper" by Japan Association of Corporate Executives (Keizai Doyukai)[2]. The same year in October Japan Federation of Economic Organization established a subcommittee on socially responsible management, and in 2004 the "Charter of Corporate Behavior" in its 4th edition was revised with regard to CSR standards. Since then, the operationalization of CSR principles in Japanese enterprises became an inviolable norm, and the number of related publications in Japanese scientific literature and mass media started growing exponentially. Japanese companies started organizing specialized departments to regulate social corporate responsibility related issues, and began publishing annual reports on their contribution to social welfare, companies started to be rated based on different CSR indicators. Currently Japan is represented by the biggest number of participants in Global Reporting Initiative (GRI) - the most authoritative CSR reporting organization in the world.

The initiative of development and implementation of CSR principles is coming from entrepreneurs, as well as from academic specialists in different fields. Moreover, using internationally well-established CSR terminology, the Japanese started associating the ideas and principles of corporate social responsibility with their own ethical tradition. They mainly point out that ideas of Japanese work ethic existing in Tokugawa (1603-1868) and Meiji (1868-1912) periods clearly resonate with those of CSR`s.

This especially concerns ethical credos, contained in the statutes and regulations of trading houses, where Buddhist and Confucian ideas have received their original refraction. American researchers studying CSR point out that unlike American companies, in Japan they tend to avoid rigid administrative regulation in this sphere, and prefer cultural mechanisms of regulation, related to philosophy and ethics[3]. This peculiarity can be partly explained by existence of a significant number of Japanese big businesses, which have more than 100 year history and preserve the spiritual succession.

It is notable that, according to the authors of "Global Survey of Business Ethics", it is the instrumental approach that dominates in European business ethics, with emphasis recently placed on technologies, whilst philosophical issues are slowly being set aside[4]. At the same time in Japan, at least publicly they attach particular importance to philosophical and ethical aspects.

Over recent years, mission statements of Japanese companies have consistently featured ethical maxims of Buddhist and Confucian origin developed during Tokugawa period. They are sometimes central to CSR declarations of business communities, like for example, in Declaration of Corporate Social Contributions published in 2007 by Committee on CSR and Corporate Ethics Kansai Association of Corporate Executives[5]. The ideas, which are nowadays incorporated into CSR, in addition to ethical significance since the early days have been designed to ensure the sustainability and resilience of the company. It was the long-term continuity and protecting the "good" name of the brand, that presented the value, which family businesses sought to ensure.

In the studies of CSR the continuity of modern ideas with national ethical tradition and its religious and philosophical basis can be traced. It is therefore important to consider the whole set of such provisions and to compare their initial and modern meanings.

One of such traditional foundations deeply rooted in Japanese Buddhism is the concept of "jiri-rita", which literally means "benefit the self by benefiting others". The same extensive slogan can be found in many charters of Japanese companies. For instance, if one enters the official website of Sumitomo Life Insurance, he will see the following mission statement: "benefit ourselves, to provide benefit to others, unity of personal and social". The meaning of this slogan can be interpreted in the following way: Sumitomo Corporation while reaping its own benefit must be beneficial to the state and society. While being a private organization, at the same time it is also a social tool"[6].

The concept expressed by formula "benefit the self, contribute benefit to others" (sanskr. svārtha-parārtha, jap. jiri-rita), is related to the interpretation of the ideal and bodhisattva practice in Mahāyāna Buddhism. In Mahāyāna sūtras the notion "benefit the self, contribute benefit to others" (svaparārtha) emerged in the context of contradistinction of bodhisattvas to arhats and pratyekabuddhas, who seek only their own deliverance, i.e. striving for one`s own benefit (svārtha, ātmārtha, ātma-hita). Whilst bodhisattva postpones the entrance into nirvana in order to help others to deliverance. On his way to attain the state of a Buddha, he keeps his vow to lead all sentient beings to enlighentment. Thereby, bodhisattva's doings have two interconnected sides - his own path to Buddha state, or obtaining his own benefit, and guiding others, in other words being beneficial to them.

Japanese scholars emphasized the match with bringing benefit to others while benefiting oneself concept in bodhisattva practice, admitting that such practice may be implemented in daily life. The founder of Tendai school Saicho (767-822) amongst others, in his treatise "A Clarification of the Precepts" (Kenkairon) on bodhisattva image stated: "Bodhisattva precepts do not order you to seek only your benefit. But it is the action for the benefit of others that make you benefit yourself"[7]. Saicho did not deny the possibility for laymen to embark on bodhisattva's path, though at that time Buddha`s teachings were mainly focused on reaching the salvation within monastery, the embodiment of which was a Bodhisattva monk.

Jiri-rita was further developed during Kamakura period (1192-1333) when the prevailing view was to save not only a monk but also common people, engaged in daily chores.

The most popular statements of these ideas can be found in Zen and Shin Buddhism.

Master Dogen (1200 - 1253), who founded the Soto school of Zen Buddhism in Japan, formulated the following: the "law of bringing benefit is universal". In his essay "The Bodhisattva's Four Embracing Actions" (Boddaisatta Shijobo) of "The Treasure House of the Eye of the True Teaching" (Shōbōgenzō) he discusses "showing benevolence" (bringing benefit) to people to be one of the exemplary acts of Bodhisattva. By benevolence Dogen means to benefit to sentient beings, as well as to benefit oneself. He wrote: "Some people may foolishly think that if they were to put the welfare of others first, their own benefits would be reduced. This is not so. Benevolence is all-encompassing, universally benefiting both self and others. There is no differentiation between self-benefit and others' benefit. We should act for the benefit (show benevolence) of both self and others"[8].

Shinran (1173-1262), the founder of the Shin school that belongs to Amidism branch, in his short book "Hymns of the Pure Land" (Jodo Wasan) stated the idea of jiri-rita in the first verse of the 37th hymn: "[Amida's] self-benefit and benefit of others have been perfectly fulfilled [as the Pure Land] (jiri irta emman shite)". The maxim "perfect fulfillment of self-benefit and benefit of others" in Shin Buddhism has become the expression of intersectional achieving the enlighentment of Buddha by Bodhisattva and rebirth in the Pure Land by other sentient beings. It is important to note that, Shin Buddhism was the first to abolish the distinction between priest and lay follower in accordance with Shinran equalitarian theory" no monks, no laymans" (hiso hizoku).

Shin Buddhism is one of the most important religious and cultural phenomena to form the spiritual foundation of Japanese modernization. Its power reached its height in Tokugawa period. By 1850 there had already been about ten thousand monastic schools of Shin Buddhism, which built the subculture of Tokugawa[9]. Shinran's ideas had been a particularly important influence on a large number of people. Omi prefecture (present-day Shiga prefecture), most active commercial center of that time, was under the strong influence of the Shin Buddhism.

As the path of a bodhisattva in Mahāyāna Buddhism, especially in the Far East started to be regarded reachable for every buddhist including lay followers, the above-mentioned formula became universal. Benefit started to be interpreted as benevolence of the enlightenment, implying the transformation of consciousness, which make it possible to live freely and comfortably in the current life, to succeed in a particular pursuit.

Thus, in Tokugawa period the teachings that did not only admit that one can achieve the enlightenment during his earthly life, but also associated day-to-day work with practicing Buddhism, there started to spread. Notable examples include the views of Buddhist thinker Suzuki Shosan (1579-1655), expressed in his "Daily Life for Four Classes" (Shimin Nochiyo) when he speaks to artisans: "All occupations are Buddhist practice. Through work we are able to attain Buddhahood. There is no calling that is not Buddhist. All is for the good of the world... The all-encompassing Buddha-nature that manifests in us all works for the world's. All reveal the blessing of the Buddha"[10]. In the section on farmers we can find: "Agricultural labor is Buddhist practice. If your heart is not pure, agriculture is a vile engagement. If your faith is strong, it will become the doing of bodhisattva"[11]. Suzuki Shosan directed the following words to the merchants: "Throw yourself headlong into worldly activity caring nothing for riches... your profit will rise and you will become a person of wealth... By reaching the state of Buddhahood in your heart naturally, you will feel wonderful happiness of nirvana. That means that becoming a human with boundless freedom you yourself will lead the way between the Heaven and Earth"[12]. We can find similar ideas among the representatives of Sekimon Shingaku, founded by Ishida Baigan (1685-1744), which were broadly accepted in artisan and merchant class of Japan in Mid-18th Mid-19th centuries.

It is no coincidence that these ideas were accepted by entrepreneurs of Tokugawa and Meiji epochs and provided the basis for charters and constitutions of trading houses and guidelines for future generations by their ancestors. The most famous among them is the statement of Ito Chubei (1842-1903), the founder of ITOCHU Corporation: "Trading is the act of bodhisattva".

Therefore, on the one hand, trading, treated as service to the world, received ethical justification and with the help of jiri-rita generating profit was legitimated. On the other hand, it started to be noted that long-term commercial success, prosperity and sustainability of the company is only possible if it does not pursue the objective of making profits at all costs, guided primarily by the interests of society.

The meanings of benefit in common life and benevolence of spiritual release expressed by the same character ri started to become synonymic. And while in Confucian tradition pursuit of profit and benefit is often considered to be indecent behavior of "а small man"[13], in Buddhism this notion originally conveyed a positive meaning.

One more idea, which constitutes the foundation of CSR principles of Japanese companies, is "satisfaction of three parties" or "good for three parties" (sanpoyoshi), which, as it will be explained further, is also of Buddhist origin and associated with ideas of a path of bodhisattva in Far East Mahayana.

The principle "good for three parties" is the key maxim of ITOCHU Corporation, one of the world's largest general trading and investing companies, founded by Ito Chubei in the late 19th century. On the company's homepage in the CSR section the following is declared: "ITOCHU Corporation believe that companies are also a part of the society, that without coexistence with the society as a dutiful corporate member and without complying to its needs through our activity, the company will not be able to retain its sustainability. We believe that corporate social responsibility (CSR) lies in corporate thoughts and actions on the question of how to play a role in building sustainable societies through business activities. Such approach is driven by the "good for three parties" philosophy developed by Omi merchants, which has become the cornerstone on which our founder Chubei Ito had built his business"[14]. Sanpoyoshi idea that has become his life motto was formulated in 1872 in the Charter of his trading house in the following way: "Trading is the act of Bodhisattva. It is noble when it accords with the spirit of Buddha by profiting those who sell and those who buy and supplying the needs of society". The principles of "good for three parties" are the key issues in CSR programs of many other companies, such as Nishikawa Sangyo (manufacturer and distributor of home furnishing and decorating goods), Wacoal (clothing manufacturer), and Nippon Life Insurance etc.

Japanese researchers link the origin of sanpoyoshi to the first of the six paramitas, practiced by bodhisattva - dana paramita, which is the act of giving or generosity. It implies Dharma giving as well as giving goods, compassion and courage. The act of giving must be absolutely free of any affection to the recipient, or to the item given, and also of seeking gratitude or reward or in return.

In other words, the giving in Buddhism implies absence of nature of self or emptiness of all three sides of giving, i.e. the one who gives, the recipient and the object given. This condition of true giving is called "the triple purity of giving" (sanskr. trimandala-pariśuddha, jap. sanrin shojo). Giving with pure mind becomes a virtue for both the giver and the recipient and has a power to transform the world. Abe Daika, professor of Ryukoku University devoted several articles covering the relationship between these two notions. He showed that Buddhism understanding of purity of thoughts of the one who gives influenced the Tokugawa image of a good-will generous businessman, who always provides for the good and well-being of his customers. By his kind action he brings the virtue to himself and to those who his actions are addressed to. Goods and services he provides, mediate between him and his customer. Pertinence and satisfaction they bring become the evidence of supplier's pure action. The benefit provided by these goods corresponds to the good of the third party, i.e. the whole society[15].

Today most businessmen, who live in a secular society and use the above-mentioned slogans, are often not guided by religious motivation, which those slogans originally carried. However, the ethical message of seeing any action as a mission, aimed at improving the life of local communities and the world in general, remains being moral reference for Japanese people today.

Also we cannot help but ponder the role of Confucian tradition in the conceptualization of CSR in Japan. In particular, the dilemmas of duty and profit, personal and social, which have been under discussion in Confucian philosophy since ancient times, reflected in CSR related documents.

For instance, Shimizu Corporation declares its commitment to the CSR principles, stated by an outstanding entrepreneur of Meiji epoch, the follower of Confucian teaching, Shibusawa Eiichi (1840-1931) in his work "The Analects and the Abacus" (Rongo to Soroban), where he proclaims the unity between morality and economy[16]. "Sankyo Pegasus" company, which operates marketing and distribution of petroleum and oil products, has its creed in business ethics and CSR management, using the quotations by a syncretist thinker Ishida Baigan (1685-1744), who developed ethical principles of merchant class in Tokugawa. He wrote: "... The true merchant thinks not only of his own position, but of the customer's position also[17]" (Periphrasis of golden rule of morality in "The Analects").

The interpretation of correlation between striving for personal benefit and duty, being one of the issues of Confucian teaching, became a significant part of Ishida Baigan's and Shibusawa Eiichi`s ethical views. Ishida Baigan denied that pursuing personal benefit must obligatory be harmful to others. In his opinion, benefit can only be mutual. Personal benefit directly communicates with benefit and prosperity of the whole country and its nation. In case, when benefit is derived only by one side, it means that it only looks like benefit, which will reverse itself later on. This idea was taken up and further developed by Shibusawa Eiichi. The keynote of his ethical attitudes was the approval of moral principles in business activities. He paid attention to the misinterpretations of inconsistency of social duty with personal benefit, which, in his opinion, developed under the biased commentaries of neo-confucianists to "The Analects" and "The Mencius". He wrote: "Duty and profit are inseparable. One realizes it while reading The Four Books. This misreading can be illustrated by the statement of a great confucianist of Song period Zhu Xi, who diminished the pursuit to profit and well-being... Due to misinterpretation of Confucius's and Mencius's teachings, the spirit of merchants who must enhance people's well-being, is overtaken by egoism... As a result, the so-called merchants nowadays pursue only their self-interest, unaware of their debt to individuals and society... To remedy the situation for the good of the whole society ... one must take effort to strengthen the conviction that duty and benefit are inseparable"[18].

Shibusawa understands duty as duty primarily to society and state. He brought the idea of corporate duty in one of his early works - "Summary Rules of Companies" (Tachiai Ryakusoku), written in 1871[19]. In this work Shibusawa considers business activity as an action, aimed for public interest. In his opinion, the duty of a businessman is to spare every effort on behalf of country's welfare and prosperity and social well-being. This idea treated every business related person as a "subject" who serves his country: "Every subject of Japan must work hard for his country without escaping from difficulties"[20]. Shibusawa's understanding of duty was elaborated in corporate slogan of Meiji government: "Enrich the country, strengthen the military". In this light private profit was perceived as a fulfilment of one's commitment to the state: "If all people unanimously despise the rich, how can the ideal of a reach country and strong army be achieved? Personal wealth is nothing but country's wealth. Every single person must not pursue personal profit, but his wealth must become the asset of the state. People are working day and night to become prominent by making the state rich"[21].

The interpretation of professional activity as one's service to the state was shared by a large number of Confucian thinkers of Tokugawa period. However, it is most probably that Shibusawa took the idea under the influence of Mito school which he has known since his youth. The representatives of this school, Aizawa Seishisai (1782-1863) and Fujita Toko (1806-1855), viewed an individual as a subject serving his emperor, who must do his job in accordance with his social status and abilities for the sake of social relief and country's peace and harmony. His duty implied this commitment, through which he expressed his allegiance to the Emperor. According to Shibusawa the object of allegiance was not the Emperor, but the State in general. Upon that he insisted that business must be independent from the State.

One more aspect of duty-profit correlation, which Shibusawa points out, is the statement that "public interest and private profit are inseparable". In this light if private profit is not at the same time beneficial to public, it cannot be viewed as real profit. Such view conforms to the doctrine on equivalence of the private and the social proposed by a Confucian thinker Ogyu Sorai (1666-1728) more than two hundred years earlier.

In this regard we can resort to the following words by Shibusawa Eichi: "It is a great mistake to think that wealth is an individual property of one man. Naturally one man is not able to do anything alone. Only with the help of his state and society he is able to derive profit. State and society make him feel secure; therefore, if it were not for them, alone he would not fully be able to live in this world. So if we think of it, it will become clear, that the more the help he has received from society, the wealthier he becomes. In order to repay for this blessing, you must be aware of your debt to society by helping it as much as you can. It is not less significant than charity or social work. Similar to the statement "establish others [first] in seeking to establish themselves and promote others [first] in seeking to get there themselves"[22], if your love for yourself is strong, you must also love the society in the same way"[23].

So why recently there has been a resurgence of interest in spiritual heritage in the context of CSR in Japan?

Throughout the course of Japanese history curtain fragments and structural forms of traditional thinking, referring to earlier ideological systems have been rethought and reconstructed in accordance with new needs.

Today the Japanese national idea of their country, as well as it is in other countries, expects building a "good society". According to the research by Russian social and political scientist Sergey Chugrov on modern Japanese identity, most people believe that the main priority is not mere economic prosperity, but psychologically comfortable social environment, where frustrating factors and risks are reduced to minimum, conditions when social and cultural traumas may occur are absent, prosperity and social sustainability are ensured by self-regulation, ecological problems are minimized, personal safety is provided and the main values are morality and reasonableness (implying rejection of excessive luxury and greed)[24]. Therefore, there is a good reason for an active adaptation of CSR ideas by business and society. Perhaps the import of principles and mechanisms of CSR to the Japanese ground is facilitated by the inclination of understanding these new technologies as an extension of their own tradition. Thus, new ideas are easily absorbed, through associating and finding similar issues in their own cultural heritage, when the new becomes adopted as "one`s own", like it has happened in the Japanese history many times.

Moreover, in the context of globalization, when nations are again struggling for their identity, the interest in the culture of one`s own country is growing. In this regard, the conceptualization of CSR in this process is probably a special case. The Japanese skillfully use western patterns, harmoniously integrating them and enriching with unique cultural content, so that it gives the impression, that Japanese CSR norms are not introduced from outside, but are spontaneously and loosely formulated within their own sociocultural space.

It goes without saying that Japanese experience of nurturing and promotion of CSR principles attracts significant interest for many countries in the world including modern Russia.

[1] Ref. http://www.keidanren.or.jp/english/speech/spe001/s01001/s01a.html.

[2] Ref. http://www.doyukai.or.jp/en/policyproposals/articles/pdf/030326_1.pdf.

[3] Ref.: Lewin A. Y., Sakano, T., Stephens, C.U., and others. Corporate Citizenship in Japan: Survey Results from Japanese Firms // Journal of Business Ethics. 1995, 14(2). P .95.

[4] Ref.: Global Survey of Business Ethics in Teaching, Training, and Research. Geneva, 2012. Р. 245.

[5] Kamigata Declaration of Corporate Social Contributions. In Pursuit of Ambitious Corporate Management. Committee on CSR and Corporate Ethics Kansai Association of Corporate Executives (Kansai Keizai Doyukai) // www.kansaidoyukai.or.jp/.../070514CSR kigyorinri.

[6] Ref.: http://www.sumitomolife.co.jp/about/csr/group/traditional.html#header.

[7] Saicho, "A Clarification of the Precepts" (Kenkairon)// Nihon-no meicho (Great works of Japan), V. 3, Tokyo, 1984, P. 11.

[8] Dogen, "The Treasure House of the Eye of the True Teaching" (Shōbōgenzō), V. 4, Tokyo, 1972, P. 367.

[9] Amstutz G. World Macrohistory and Shinran's Literacy // Pacific World (Journal of the Institute of Buddhist Studies), Third Series. № 11, Fall 2009. Р. 260.

[10] Suzuki Shosan"Daily Life for Four Classes" (Shimin Nochiyo), (translated from jp..) // Karelova L. B. The roots of Japanese Business Ethics. History in Portraits. М., 2007. P. 56.

[11] Ibid. P. 55.

[12] Ibid. P. 59-60.

[13] "The superior man thinks of duty/, the small man thinks of favors which he may receive" (The Analects, IV, 16).

[14] http://www.itochu.co.jp/en/csr/itochu/philosophy/.

[15] Ref.: Abe Daika. Bukkyo no keieikan ni kansuru oboegaki. Shobai ha bossatsu no waza. (Notes on Buddhism view on entrepreneurship.Trading is the Act of Bodhisattva.) // Keieigaku ronshu (Essay Collection on Business Administration). Vol. 49, № 4 (March 2010). P. 87-88.

[16] Ref. http://www.shimz.co.jp/csr/ethics/index.html. In 1887 Shibusawa was appointed senior advisor in "Shimizu" company, which has engaged in the construction business since 1804.

[17] Ref. http://www.sankyopegasus.co.jp/profile.html#aisatsu.

[18] Shibusawa Eiichi Rongo to soroban (The Analects and the Abacus). Tokyo, 2001. P. 104-105.

[19] Ref.: Shibusawa Eiichi. Tachiai ryakusoku (Summaru Rules of Companies). Tokyo, 1992.

[20] Shibusawa Eiichi. Rongo Kogi (Lecture of Analects). Tokyo, 1975. P. 417.

[21] Ibid, 180.

[22] Ref.: The Analects, VI, 30.

[23] Shibusawa Eiichi Rongo to soroban (The Analects and the Abacus). Tokyo, 2001, P. 94-95.

[24] Ref: Chugurov S. V. Japan: in Search for New Identity, М.., 2010. P. 277-278.