I am Yoshida, president of Yamada Shusei Ltd., a professional apparel garment repair group in Nagaoka City, Niigata Prefecture.
This section summarizes the issues regarding the Big Motor fraud case from the perspective of business succession.
1) Loss of credibility due to insurance fraud claim problems, etc., resulting in a loss of customers and a significant decrease in sales.
Under these circumstances, the value of the company subject to business succession will decline. Business succession requires that the successor pay compensation commensurate with the value of the company. In the case of Big Motor, it is required to repay 9 billion yen in loans as compensation, and it will be difficult to find a successor who can take on such a high amount of debt.
2) Difficulty in business succession from within, such as intra-family succession and employee succession.
In intra-family succession, the manager's children or relatives become successors. The manager of Big Motor is currently under arrest, and his family members may also be involved in the fraud case. In such a case, trust and social reputation among family members will be damaged, and the business succession will not proceed smoothly. In addition, in employee succession, the manager's subordinates and executives become successors. It is highly likely that Big Motor's employees are also complicit in the fraud case or have low loyalty and motivation to the company. In such cases, trust among employees and management skills will deteriorate, making it difficult for the business succession to proceed smoothly.
3) Third-party succession, in which the business is taken over from an external party, is also difficult.
In third-party succession, other companies or investors become successors. Big Motor's brand image and customer satisfaction have declined due to the fraud case, and its business and assets are not attractive. In such a case, the third party's willingness to acquire or partner with the company will decline, and the business succession will not proceed smoothly.
4) What was management trying to leave behind?
As described above, the fraud case has brought to the surface a variety of problems that are preventing Big Motor from succeeding to the business. All of them are backed by a corporate culture that has been fostered over a long period of time, and one can imagine that the roots of these problems are quite deep.
Konosuke Matsushita, the founder of Panasonic Corporation, said, "A company should be a public institution of society," regardless of the type of business or the size of the company. I could not sense such a management philosophy oozing from the personality of the manager at the press conference held by former President and CEO Hiroyuki Kaneshige.
Business succession is not simply the buying and selling of a company; it is a strategic business decision for the survival and development of a company, and cannot be made without neglecting social responsibility. Can Big Motor survive and seriously consider and implement business succession?
