ECONOMIC RESEARCH CENTERDISCUSSION PAPER

No.184Social Rationality of Islamic Management:
Reevaluation of Relationship-Oriented Management
byHideko Sakurai

March 2012

ECONOMIC RESEARCH CENTERGRADUATE SCHOOL OF ECONOMICSNAGOYA UNIVERSITY

Social Rationality of Islamic Management:
Reevaluation of Relationship-Oriented Management
Hideko Sakurai*

Abstract
This paper examines the characteristics of Islamic management from a cultural point ofview, focusing on its style of relationship-oriented management, which is considered incontrast to business-oriented management. Relationship-oriented Islamic management isbased on Shari’a, i.e., Islamic Law, which demonstrates the means for each person torationally build relationships with others, who are different from each other in various ways.
Thus, the paper presents the importance of partnership for Muslims and then examines
partnerships between capitalists and business operators, men and women, Muslims and nonMuslims, the commercial and non-profit sectors, and so on. It further explains the social
function of gift economy in Islam and its institutions such as Zakat Fund.

The paper

concludes that relationship-oriented management, though it tends to have been considered asinefficient, should be reevaluated as a socially rational management for reconstructing every
society in the world, which has lost the original dynamism of the market with societyorganizing power.

Key words: Islamic Management, Shari’a, relationship-oriented management, Transcultural
Management, Partnership, gift-economy

1. Introduction: The Background of the StudyIn the wake of global management development, attention has been drawn to
the dynamism created by its fusion with transcultural management. The fusion thereof
does not simply mean eclecticism, but rather something for which an essential
turnaround of “management as culture” is indispensable (Kawada: 2001).
The primary meaning of the term culture is “to cultivate soil and nurture
products.” Put in that context, it could be said that management is culture in itself,
whereas it is about administering/managing “soil” in the name of the economy,* Professor, Faculty of Policy Study, Chuo University
Visiting Fellow (October 1, 2010– March 31, 2011 ), Economic Research Center, Graduate Schoolof Economics, Nagoya University

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enriching the society, and nurturing people. In the discipline of management, however,as expressed in the term “corporate culture,” the relationship between management
and culture has commonly been discussed within the context of either the corporate
environment as a management agency, or a national culture to which each worker
belongs. The underlying premise here is that it is modern civilization that has givenrise to culture. Moreover, during the time of the international state system realignment
after the collapse of East-West relations, and during the process of globalization, theworld had been showing an ever-unifying move towards modern civilization andculture.
To the contrary, however, in such a tidal wave, another movement has risen; it
has aimed to forge nation-state, economy and/or management systems, based upon acivilization and culture that is different from the modern one. It was the 1980s onward,
during the process of East-West relations demise that such a sea change became
outstanding. While the discourse on the Islamic Movement inspired by Iranian
Revolution in 1979 tends to focus upon political interests, in reality, the formulationof the Islamic economic system has steadily progressed. Especially, Islamic banking
has come to the front in the new globalized world since 2000, and its boom has
continued since. The main backbone of its support has been Islamic management,
which is influenced by Islamic culture, and at the same time, preferred by a verybroad base of Muslims.
The characteristics of Islamic management, simply put, is relationshiporiented; it is equipped with a structure, which, by strongly correlating with faith,
excludes neither human elements nor others in the society. In fact, such management
style has been embedded in the society, and sustained people’s economic activities fortheir daily lives.

2. Management as Culture
The rapid globalization since the 1990s has created a new culture which has
never been seen before: That is, digital culture, which levels national/ethnic culturalcharacteristics, and with the help of information technology development, has quickly
spread throughout the world. It is, in short, unambiguous, exchangeable, and rapid innature. It has reduced personal elements of life such as rituals, customs, and circularconnections among people, from inside out.

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Ritzer (1993) clearly depicted a fast food system which, through its efficiency,
calculability, and predictability, as well as control, which even gets its customers
involved in the promotion of efficiency. Furthermore, he maintained that the processof such a system evolved out of the food industry, and eventually became a social
system itself. The revolution of the system was established where control was
executed by machines and environment, not by craftsmanship-like training to control
personal differences and errors. The Toyota system, which was created with the aimof quality management and efficiency, is no exception. It could be said that, in theprocess of digitization, management culture has shifted from maturing to forcing, andfrom training-oriented to control-oriented.
Digitized management has created a business environment that cannot be
influenced by personal, distinct factors, by controlling people and equalizing culturaldifferences. It has given companies, investors and consumers convenience, the degreeof which has never existed before. It also has made relations among all parties
exchangeable. However, all-out digital partitioning, which can reach as far as internalpart of humans and its exchangeability, has also brought negative impacts even toorganizational management and the deepest layer of society (Baudrillard: 1999,
Sennett: 2006).
To begin with, the terms “digital” and “analog” business management
essentially have not necessarily been an either-or choice, but rather expressions toindicate management directions. Furthermore, the cultural root of each term is deeply
related to Western and Eastern selves, respectively (Nisbett: 2003). That is, themutually independent self, a concept nurtured by the Greek/European civilizations on
the one hand, and the mutually relational self, cultivated by Asian civilization on theother. In reality, however, independence and relations are not necessarily
dichotomized concepts, but rather, mutually complementary. One’s independent self
can be viable based on the premise of his/her coordinated relationships with others. In
other words, the only difference is the degree of one’s preference and focus. The fact
remains that the existence of others is like a mirror image of oneself.
Still, in the midst of current globalization, the concept of independence has
intensified its solipsist tendency, and even leaned towards rejection of collaboration
with others. The thorough digital divide has caused the breakup of links between
independence and relations, which has resulted in a variety of social contradictions,3not only in the society where the “analog” way is preferred, but also in more digitizedplaces.
Yet, there still is a civilization which has been resisting the overrun of such a
digital divide: Islamic civilization. It is true that people in Islamic nations, also, havebeen challenged by serious problems such as breakups and disparity caused bymodern civilization. On the other hand, the basic layer of their society is structured in
the manner that people’s social relationship cannot be easily fragmented. At the sametime, such structure is reflected on their “management as culture.”

3. Islamic Civilization
After the advent of Islam in the 7th century, its civilization developed along the
Silk Road both by land and by sea. Rationality, democracy, and equality in Islamicteaching became a strong appeal to people, taking specific forms in commercial
transactions. The commonly accepted theory is that Islam expanded its force by the
military conquest, and that it forced people to choose between the “Qur’an or Sword,”which has been reversed in recent years. Now it has been pointed out that theformation of a major Islamic market, in response to the expansion of its trading zone,
was the underlying base of the expansion of Islamic civilization (Turner: 1997). What
made it happen was a rational standard, accepted beyond the cultural differencesamong various tribal groups and geographical areas. This is derived from Shari’a, i.e.,
Islamic Law, which will be later discussed.
Islamic civilization conveyed rationality, commonly held by modern Europe.
In fact, it was Islamic civilization that first drew its intellectual heritage from Greece,
learned their rational and logical reasoning, and carried it on to nations of medieval
Europe, before modern Europe did (Hunke: 1960). Islam is closely related to Judaism
and Christianity, which are referred to as “sister religions” with them. Under theAbbasid Dynasty of Baghdad, as well as Al-Andalus of Cordoba, the Islamic worldcontinued studying Greek civilization and its philosophy, and utilized its knowledge
to further develop natural sciences, such as medical science, mathematics, astronomy
and chemistry, before passing the torch to Europe. However, due to the hegemony ofEuropean modern civilization, such a historical fact of their interposition was
abstracted, and now considered as “Lost History” (Morgan: 2007).
It establishes that, in the Islamic world, conflict between religion and science
never existed. Rather, to Islam, scientific and logical thinking has been, and still is, an4

important means for understanding the world created by God; in other words, todemonstrate the existence of God. Similarly, a question of social science, i.e., howpeople interact with each other and participate in the formation of society, has also
been answered with clear reasoning, just as ones of natural science. Each person, andthe way one is related to the others, would never be separated from one’s religion,
since each existence was given by God.

4. Multilayered Structure of Relationality in Islamic Society
One of the characteristics of Muslims personal relations is its multilayered
structure; a mutual relationship consists of one’s independent self and relationality.
Each individual exists independently and separately, but is connected with each otherthrough the contract of Shari’a, the Islamic Law. On the other hand, the foundation
formed by the chains of these contracts is an integral part of one’s existence, which isshared with the other. Thus, in so far as one inquires into the origin of one’s selfexistence, he/she could not cancel the contract. Such mutual relationality can be also
seen in a variety of situations within the domain of management.

4-1 The Origin of Relationality
According to Tawhid, i.e., the Islamic worldview, everything in this Universe
is created by Allah, the one and only God. In other words, every individual’s origin ofexistence reaches to Allah. This in turn means that God guarantees the equal status ofeach existence and the ways in which humans should exist and relate to one anotherare defined by God.
Furthermore, since Allah is the Almighty Creator, He gives uniquely different
attributes to every existence, and does not create anything exactly the same as another(Kuroda: 2004). Among the teaching of Islam from around the early 7th century, allnatural life form’s DNA-level differences were presented as God’s creation.
According to Islam, each individual is created distinctly different. Among thedifferences include his/her gender to begin with; financial and mental power, physicalstrength, as well as other qualities, such as leadership skills, cultural attributes, andartistic sensibility. It is believed that only the Almighty Creator can provide
guidelines for every human being to co-exist and unite in one common existence withothers. The very guidelines are what are on Shari’a.

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Shari’a is often associated with an imposing and oppressive image. However,as the original meaning of the word Shari’a is “a path leading to where water is” , it isa signpost one would follow when one needs to cool a parched throat. It also prohibitsa particular person or group from exclusively quenching their physical and/or mental
thirst. This enables all persons to share resources and wealth in the right equilibrium,
and to satisfy their basic human needs. Thus, the purpose of Shari’a is by no means
to force abstinence, or for punishment.
The first source of Shari’a is Qur’an, in which demonstrates the revelation ofGod, and the second one is Sunna, i.e., words and deeds of the Prophet Muhammad
who practiced God’s words. As Shari’a covers every life field of each individual andthe society as a whole, having knowledge of it is also vital in conducting business.
Shari’a divides people’s every conduct into five categories they can refer to, so they
can willingly build an impartial society. The categories include conducts that are: 1)
obligatory; 2) recommended; 3) neither reprehensible nor desirable; 4) not consideredas crimes, though should be avoided; and 5) forbidden. Obligatory and recommended
conducts are strongly tied with social responsibilities, which then influence on
people’s corporate management and investment.
In the Muslim faith, “absolute obedience to God” does not really mean one’s
free will is suppressed. Rather, it means “obey nobody but God,” and to build social
relationships without “ever being ruled by others, nor ruling others” in the real world,by means of the Islamic Law. That is, in Islam, equality before the law is guaranteed
for all and establishing democratic relations is part of people’s faith.
As has been discussed, the existence of each human being in Islam isindividually given by God, thus his “independence as an individual” is guaranteed. As
a result, the relationship between self and others is understood as mutuallyindependent. At the same time, each individual’s existence is commonly shared
among one another, in which sense he/she is considered inter-connected with others(Kuroda: 2004).

4-2 Relationship-Oriented Islamic ManagementInthedisciplineoftranscultural

management,

relationship-oriented

management is the term used to describe the management style in which relationships
strongly influenced by personal elements define a variety of management relations,such as buying and selling, investment, and employment. This style of management
6

regards business relations as part of a society in which multiple human relationships
are intertwined with one another. As a result, the personal elements of relationships
become essential among the parties in business, among which, the most important are
relationships of mutual trust, directly fostered by the parties in the businessconnection. In other words, business relations can reflect personal relationships of
mutual trust between two people.
In contrast to this, in business-oriented management, one’s business
relationship is cut off from a variety of personal relationships and subjected to control,
while elements unrelated to business are excluded wherever possible for increased
efficiency. Therefore, business transactions are digitally divided by place and time,and business rationality is valued foremost. Personal elements of relationships, suchas chemistry between the parties, relationships of trust that are built mutually, or
cooperative relationships that are deeply interdependent, are regarded as factors thatcause disturbance in business (Sakurai: 2003).
These management styles can differ, depending upon whether such personal
elements would have an affect on business activities. For instance, in businessoriented management, as the occasion where the parties in transactional relationshipinteract with one another is limited to a single purpose, that is, to conduct business,bringing up non-business subjects would be considered as verbose and inefficient.
Much less behaviors such as “briefly stopping by just because one is in town,”
without any particular business negotiation planned, would be only a waste of time,
let alone meaningless. On the contrary, in the relationship-oriented management style,such seemingly wasteful interactions would strengthen the bond between the two, andwould become a premise to promote business deals through strong mutual trust.
Going straight to the business subject, before establishing a certain distance between
one and his/her business partner could even be considered impolite.
Disadvantages in the relationship-oriented management style need to be
pointed out, too. In some cultures, the process of business transactions, ororganizational relations, could become authoritarian, exclusive, or too cozy. As aresult, fairness in business could get hindered.

For Muslims, however, Shari’acompliance is important criteria of judgment in business, where relationship-oriented
business is controlled by Shari’a, fairness should not be lost because of convenient
reasons.

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5. Importance of Partnership for Muslims
As discussed earlier, the Islamic ontology teaches that each individual isequally valued and is in an equal relationship with one another, because eachexistence has been given by God. Furthermore, it is another major premise guided by
the ontology that each has been given different qualities. It means that Shari’a
specifically demonstrates the means for each person to rationally build relationships
with others, who are different from him/herself in various ways. Here, the key factor
is partnership relations. Shari’a shows how to build relationships with dissimilar
partners, including capitalists and businessmen, men and women, Muslims and nonMuslims, the commercial and non-profit sectors, and so on.

5-1 Partnership between Capitalists and Business Operators
It is well-known that Islam has bans on the charging of interest. To comply
with this, capital owners make a partnership agreement with business operators,
instead of lending money. Among the primary forms of such partnership agreements,
they can be roughly classified as follows: 1) Mudharaba; and 2) Musharaka. The
difference between the two is that in the former, capitalists do not engage inmanagement activities, while they do in the latter. (Sakurai: 2008).
Profit-Loss Sharing, or PLS, is the standard for such partnership agreements,
in which profits are distributed by the ratio specified by the bipartite agreement
reached before the business is commenced. So are the cases for loss; capitalists andbusiness operators mutually share the deficit; in other words, both parties bear the riskof loss. For example, if a business fails under the Mudharaba agreement, in which its
capitalist does not participate in the business operation, the capitalist must take full
responsibility for the lost money, while the business operator is considered to havemade up the loss by taking no reward for his/her labor. Of course, this comes into
effect only when the business operator made no breach of contract, which can be very
challenging to judge. What is most important here is, however, that the capital-labor
partnership agreements show no superiority of capital over labor (Sakurai: 2008).
Under the Islamic management setting, capitalists and business operators havea relationship of equal partnership. This relationship is not that of lenders andborrowers of funds, nor that of those who buy and sell labor through the labor market.
Additionally, by sharing the loss risk among the two parties, this management system
discourages a winner-take-all mentality, that is, unilateral profit distribution. In the8Islamic world, as just described, it is considered as a fair situation that the equal
partnership relationship is realized through PLS.

5-2 Partnership with non-Muslims
Muslims tend to be misunderstood as being hostile towards non-Muslims, andtrying to banish them. The Islamic teaching, however, never commands them tochallenge those of different cultures and religions to a fight. Some may not accept thateveryone is created differently by the only God, but instead, trample a person’s
dignity, judge the order of merit among people using man-made standards, anddominate individuals or groups who are considered inferior. But Islam denounces
such behaviors as those of unbelievers, as they deny the Creation by the Almighty
God.
The early Islamic “nation” called Umma has been given the status of an
exemplary social model of Muslims. The Prophet Muhammad enacted the Madina
Charter, which conformed to the spirit of Shari’a for this community. In the Charter,
co-existence with the Jews in Madina was clearly stipulated: Religious liberty was
guaranteed for Jews who were not hostile toward Muslims; and social, legal andeconomic equality for them as members of Umma was declared (Kuroda: 2004). In
addition, non-Muslims’ residence tax, called jizya, was collected from Jews, as well
as Christians, while they were exempted from the obligation of military service forIslamic national defense. Lastly, it was historically Islamic regions where Jewish
people persecuted in the Christian world fled to for safety.

5-3 Partnership between Men and Women
In Muslim states, there are many women who are highly educated andcompete equally with men. For starters, the Governor of the Central Bank of Malaysia(as of December 2011), and Benazir Bhutto, former Prime Minister in Pakistan, wereboth female leaders; among business people, a number of women executives joined
the list of “The World’s 50 Most Influential Arabs” that appeared in the Middle East
May 2009 issue.
However, the preconceived opinion that women in Islamic countries havebeen discriminated against and isolated and Islamic teaching is the cause of suchdiscrimination against women has remained deep-seated. Perhaps one of the items
that gives such a negative image to the religion is the veil called Hijab. The word9

Hijab means “to hide,” specifically physical characteristics that are sexually attractive.
Camouflaging one’s sexual appeal is not an obligation imposed only upon women,
however. The purpose of traditional clothing for men of Muslim society as well,commonly long-sleeved and long-trained to make his physique rather look undefined,
is for modesty. Men also wear turbans and hats for the same reason.
Most importantly, the true purpose of wearing Hijab is a symbolic effect that,in the public space, people will recognize each other not as either men or women, but
as individuals. They help diminish differences between genders, haves and have-nots
and age gaps, and enable people to overcome such preconceptions, and to build
human partnerships (Sakurai: 2005). As Hijab has remained as an outfit for women, it
has played a part as prevention of sexual harassment, guaranteed freedom for women
to freely travel without being exposed in public as sex objects, and preserved theirdignity.
Then, Islamic society has kept its social structure different from the modern
one. Women, who do not take paid jobs, play a central role in generating the strengthof gift economy. It solidly supports the foundation of families and neighborhoods,
which in modern society are reduced only to be implicit existence, as opposed to themarket. Thus, women are highly respected (Sakurai: 2005).
Viewed in this light, Hijab can be regarded not only as something to keep
womanhood from sight, but also as a symbol, or a cultural code, of a woman living
her life according to Shari’a. This, in turn, makes it a subject of criticism from nations
that favor separation between religion and state. In reality, however, most of womenin Islamic society themselves hardly have any sense of being oppressed, but rather,
they think they are freed, in the Islamic sense, and have become positive participantsof the society beyond gender differences, by wearing Hijab. Many even reject being
called “female” so-and-so, such as “female entrepreneurs” (Middle East: 2008).

5-4 Partnership among Commercial and Non-Profit Sectors
In the Islamic world, pursuing profits becomes legal only by redistributing
them to the non-profit sector. The act of profit making itself will never be denied, aslong as profits were earned while a person was correctly practicing Shari’a, and as away to bring one’s potential to the fullest. On the contrary, if one puts the profits indead storage instead of reinvesting them, and does not share them with the needy, butrather holds onto them in the name of one’s avarices, then the profits become illegal.
10In societies where the principles of separation of religion and state, as well as positive
laws (vs. natural law) are implemented, such concepts may be treated as moral issues,
whereas in Islamic society, these acts are clearly considered illegal. In the meantime,those who have committed illegal acts are expected to be punished by God, in theafterworld. Believing in the life hereafter is one of the pillars of Islam, and it brings
about an effect of looking relatively at one’s present life, as time to prepare for thenext.
As for transferring profits to the non-profit sector, there are different types ofcharitable deeds, which will be discussed in the next subsections.
(1) Charity
As was introduced earlier, in Islam, every human behavior is categorized into
five groups under Shari’a. Among the five categories, the acts of charity are
considered as either: 1) obligatory; or 2) recommended. A type of charity called Zakat
is ranked as the former: Those who obtained a certain amount of income or more are
obligated to donate 2.5 % annually. Meanwhile, another type of charity called
Sadaqat is representing the latter category. Sadaqat is a kind of charitable practicebased on one’s free will, regardless of the amount of income.
The social mechanism in which each individual will overcome one’s selfish
desire to keep all of the profits to oneself, without looking down upon those who will
receive the donation or forming any dominant relationship, comes into existence by
God’s intervention into the collection and distribution of charity. Muslims areencouraged by God to make anticipatory investments of current-life profits in order togain them in the hereafter.
Charity functions to resolve the skewed distribution of wealth which may befound not only in a particular country, but also throughout the entire Islamic world. It
may also work to adjust social problems, including extreme poverty, injustice, or
corruption, which was developed due to malfunctioning Shari’a. Although Muslims
are prohibited from receiving interests generated from unearned income, in thisenvironment of globalization, it is almost impossible for them to completely eliminate
profits gained from interest. This problem can be solved by donating a portion of suchprofits, which will be considered “purified”— as the original meaning of the term
Zakat contains “purification”.
Recently, there have been new developments of commercializing charity, inorder to make the religious custom sustainable, instead of being only temporary and11limited to the personal level. This progress includes: The creation of Zakat funds,
development of Zakat corporate accounting standards, as well as Islamic social
entrepreneurship developing in each country.

(2) The Global Zakat FundThe International Zakat Organization (IZO) was established by theOrganization of Islamic Countries (OIC) for the purpose of funding charitable causes
across the world, helping the needy and alleviating poverty. The Fund’s major
investment outlets are regional development projects aimed at each area’s sustainable
development. Specifically, the purposes of the Fund’s establishment range asfollows(New Horizon): 1) generation of income by private Shari’a-compliant SME
financing; 2) assisting the establishment of the social infrastructure of deprived
communities, including the building of hospitals, schools and housing; 3) developing
agriculture to ensure stable supplies of food; 4) disaster relief and emergency funding.
As a measure of collecting more Zakat, the Internet is expanding the base ofindividual donors. There are a growing number of cases of donations collected for the
Global Zakat Fund through e-zakat, as there are more and more web sites from avariety of Islamic organizations, from the Gulf throughout Southeast Asian nations.
The globally-developing Islamic financial market is getting the eye for its business
investment opportunities, while the scale and turnover of the Zakat Fund has been
expanding in order to invest the very profits for social purposes. It should be wellrecognized that this is an important sector to bond the profit and non-profit sectors in
the Islamic finance.

(3) Zakat Corporate Accounting
Originally, Zakat was given to specific groups of people in need of aid, suchas the poor, orphans and travelers. Zakat currently collected by the national
governments of Islamic countries functions as special taxes for specific purposes, andis often spent in the field of social welfare. There is Zakat exemption applied to somecases in the collection of corporation taxes.
The Saudi Arabian Government charges their companies Zakat, for which
there are corporate accounting entries. The Accounting and Auditing Organization forIslamic Financial Institutions (AAOIFI) worked on an international standard for Zakat
corporate accounting, whereas the Malaysian Government, which claims the AAOIFI
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standard does not match its domestic situation, has been trying to come up with an
Islamic accounting standard of its own(Abu Bakar).

(4) Islamic Social Entrepreneurship
To the Islamic world, there is nothing new about the concept of social
entrepreneurs. It is no exaggeration to say that doing business that is conducive forboth the private and public benefit is central to the Islamic corporate management,
which is desired to become a root for the equitable distribution of wealth. While Zakat
funds promote aggressive investment in the fields of medical, educational and welfare
services, there is another type of contribution called Waqf. Waqf is an endowment in
the form of land, mosques, hospitals, schools and bazaars, among others and helps toconnect commercial businesses to nonprofit ones.
Traditionally, a bazaar, or marketplace, was built together with mosques,hospitals, and/or schools utilizing the same Waqf. In other words, the space of a
traditional bazaar itself enabled both commercial and nonprofit businesses to form
partnerships. Recently, more interesting cases of this concept can be seen in newly
developed residential and other areas, such as; a mosque on the second floor of asupermarket; or a medical clinic on the basement floor of a mosque. Generally,
medical and welfare institutions and/or business facilities, are often put together by amosque, which shows how deeply Islamic businesses are intertwined with their faith.
On the other hand, users of such facilities and services not only are motivated by theirconvenience, but also by the fact that their usage of these facilities generates charitythat will help maintain mosques and support the poor.

6. Importance of Reevaluating Relationship-Oriented Management
This article has discussed several types of partnerships that support
relationship-oriented Islamic management. The current problem that Islamic society
has been facing, however, is that these business models have not fully turned into
reality. For example, one of the causes of this problem is that Islamic societies tend tolack the social stability indispensable for stable corporate management. Furthermore,while oil producing countries get richer, extreme poverty spreads rampantly among
the rest of the Islamic nations. It must be noted that this social situation goes against
Shari’a, which directs that wealth should be fairly distributed within the entire Islamic
world.
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Meanwhile, there have been some attempts of management with the use ofIslamic finance and Zakat funds. During this approach, it is partnerships amongpeople, and the re-interpretation and renaissance of relationship-oriented managementthat are going through restructuring. Islamic faith and its basic tenets cannot bedirectly applied to non-Muslim regions. Harmonization of the mutually independent
self and mutually relational self, however, is necessary in either relationship-oriented
or business-oriented societies; an image of one’s own culture can be reflected in the
mirror of another.
Japan is no exception. Culturally speaking, Japan is categorized as arelationship-oriented society. Even so, the society has been more and more digitized,
as the current management approach has shortened the time for developing humanresources just for the ease of optimization, and has limited personal elements, as muchas possible. Human labor has become replaceable. Employees are targeted for
adjustment just the way inventory can be adjusted. There is no longer any
consideration for securing a certain amount of income for each employee which isenough to support one’s family.
Moreover, because of digitized management, consumers’ attention andinterests focus only upon the market, while thoroughly eliminating personal
relationships. So called “cocooned consumers” presently only gaze at TV or computer
screens, and won’t have any interaction with people outside of the market, or throughthe market itself. It is possible for people to purchase products, view sporting events,
travel, or appreciate music, without even stepping out of their house or interactingwith others.
It is not an overstatement to say that this tendency has grown as corporate
management has confined itself to the commercial market, kept fragmenting it, andended up forming a market that shuts off individuals. In other words, the original
dynamism of the market with society-organizing power has been lost. Needless to say,this reality has negatively influenced businesses. In the situation where the tie
between society and market has been severed, it is getting harder for many to actually
believe in the possibility of an economic recovery or business turnaround, no matter
how loud they have cried for it.
Since the Great East Japan Earthquake on March 11, 2011, the word “kizuna,”
or bond, has become the most heavily spoken keyword among Japanese people. Oneof the reasons behind the frequent use of this word is the fact that the exclusively-for14

profits market has ceased functioning properly, thus greater power of the gift
economy is desired. The gift economy should not be achieved only ideologically,
however; the building of a concrete partnership between profit-oriented and non-profit
markets has to be realized. It is a pressing issue in Japan, too, to seek the recovery of
the mutually relational self, as well as the restructuring of relationship-oriented
management.

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