1st Edition

Amoeba Management The Dynamic Management System for Rapid Market Response

By Kazuo Inamori Copyright 2013
    164 Pages 11 B/W Illustrations
    by Productivity Press

    Especially effective in dynamic and highly competitive environments, the Amoeba Management System has received attention from the Harvard Business Review and has already been successfully adopted at more than 400 companies around the world. At the heart of this innovative management system is a business philosophy based on doing the right thing as a human being and the leadership potential of all employees. This philosophy, coupled with a simple and precise micro-divisional management and accounting system that enables the distribution of leadership and management responsibility into small self-supporting units called amoebas, can help organizations achieve a high degree of flexibility and market-sensitivity.

    Written by the system's creator, Amoeba Management: The Dynamic Management System for Rapid Market Response provides a comprehensive introduction to this unique and time-tested method of management control and accounting. Explaining the management philosophy and principles, it unveils fresh and pragmatic insights on how to foster a culture of leadership and responsibility in your organization. Dr. Kazuo Inamori, director and chairman emeritus of Japan Airlines, founder and chairman emeritus of Kyocera Corporation, and honorary adviser of KDDI Corporation, delves into decades of experience creating and implementing this system to supply you with invaluable operational guidance on how to monitor and manage every aspect of your company.

    Facilitating the understanding required to divide your organization into small units with self-supporting accounting, this book supplies the tools to achieve a system of management by all whereby all amoeba members focus their strengths on accomplishing common goals. It provides a means for making the concept of "value-added" truly operational for every employee and describes the features and use of the Hourly Efficiency Report, the primary mechanism used to control profits. Even companies with stagnating profitability will be able to transform themselves into high-profit enterprises using the methods described in this book.


    Each Employee Will Take an Active Role in Their Own Respective Unit
    The Origins of Amoeba Management
         A Company Started with Seven Colleagues
         Establishing a Management Rationale
         Grow an Organization by Dividing It into Small Groups
         The Three Objectives of Amoeba Management
    Establishing a Market-Oriented Divisional Accounting System
         Current Figures Are Needed—Not Past Statistics
         The Basis for Making Decisions: "Do What Is Right as a Human Being"
         "Maximize Revenues and Minimize Expenses"
         Creating Divisional Accounting Systems Based on Truths and Principles
         Direct Transmission of Market Movements Followed by Immediate Responses
    Developing Leaders with Managerial Awareness
         Colleagues as Business Partners
    Achieving "Management by All"
         Dissolving Labor–Management Confrontations with the Extended-Family Principle for Management
         Sharing Our Management Rationale and Company Information Enhances the Managerial Awareness of Employees
    "Management by All" Gives All Employees a Sense of Achievement

    Business Philosophy Is Crucial for Management
    Divide into Smaller Managerial Units
         Three Requirements for Dividing an Organization into Amoebas
         Continual Review of the Organization
    Determining Inter-Amoeba Prices
         A Fair Judgment
    Leaders Must: Management Philosophy
         Conflicts of Interest Destroy Morale and Profits throughout the Company
         Leaders Must Be Impartial Umpires
         "Do Not Lie," "Do Not Cheat," and "Be Honest"
         Embodying the Philosophy in Management
         Place Highly Capable Leaders
         Performance-Based Pay System and Human Psychology
         Turn All Operations into Businesses That Cannot Be Imitated

    How to Organize Amoebas
    Subdivide the Organization and Clarify Each Function
         Functional Needs Are a Prerequisite for Forming Departments
         Each Member of the Organization Should Have a Sense of Mission
         The Subdivision of the Organization Must Satisfy These Three Conditions
         Form Amoebas Where Overall Operations Are Apparent to Leaders
         Assign Inexperienced People as Leaders and Train Them
         Organizational Subdivisions Expand Business
    A Flexible Organization Adapts to Markets
         Establish an Organization That Is Well Prepared for Action
         The Leader Is the Manager of the Amoeba
         Management Rational Is Crucial for Autonomous Organization
    Business Systems Administration Supports Amoeba Management
         Role 1: Creating the Necessary Infrastructure for the Proper Functioning of Amoeba Management
         Role 2: Accurate, Timely Feedback of Management Information
         Role 3: Sound Management of Company Assets

    The Hourly Efficiency System: Focus on the Work Floor
    Enhance All Employees’ Profitability Awareness: The Rationale behind Unit-Specific Accounting
         Use "Maximize Revenues and Minimize Expenses" to Simply Grasp Operations
         A Management Accounting Method Suitable for Work Floors
         The Difference between the Standard Cost Accounting Method and the Amoeba Management System
         The Amoeba Form Becomes Visible
         Amoeba Power Based on the Bonds of Human Minds
    Creativity Comes from the Hourly Efficiency Report
         Profit Management by Amoebas
         Both Sales and Manufacturing Divisions Are Profit Centers
         Always Express Targets and Results in Monetary Terms
         Timely Awareness of Unit Profitability
         Increasing Awareness of Time Management
         Unifying Operations Management with the Hourly Efficiency Report
    Fundamental Management Rules Based on Kyocera Accounting Principles
         The Principle of One-to-One Correspondence
         The Principle of Double-Checking Work
         The Principle of Perfectionism
         The Principle of Muscular Management
         The Principle of Profitability Improvement
         The Principle of Cash-Basis Management
         The Principle of Transparent Management
    Key Points of Performance Control
         Hourly Efficiency Reports Should Accurately Reflect Activity Results According to the Functions of Amoeba Units
         Hourly Efficiency Reports Should Be Fair, Impartial, and Simple
         The Flow of Business Should Be Presented as Results and Balances
    The Concept of Revenue Linking with Market Price: Three Methods to Recognize the Revenue of Amoebas
         The Custom-Order Method
              Adopting the Sales Commission Method
              The Flow of Figures Shows Market Movements
    The Stock Sales Business Method
         No Transaction at Cost
         Sales Is Responsible for Inventory Management
         Minimize Sales Expenses
    Internal Sales and Purchases
         Sales Department Commissions
         Review Profitability of Each Item
         Market Dynamism Is Formed In-House
    The Concept of Expenses: Correctly Perceive Reality and Control Expenses in Detail
         Recognize Expenses at the Time of Purchase
         The Beneficiary Principle of Expenses
         Handling Labor Costs
         Subdivision of Expenses
    The Concept of Time Focus on Total Working Hours: Bring a Sense of Urgency and Speedy Action into the Workplace

    Fire Up Your Employees
    Generate Profit with Your Own Will: Practicing Profit Management
         The Fiscal-Year Master Plan
              Aligning Our Mental Vectors by Setting Goals
         Monthly Profit Management
              Monthly Planning Based on the Annual Plan
              Overall Verification of Running Totals
              Sharing Goals within Amoebas
              All Members Need an Understanding of Day-to-Day Progress
              Execute Plans with a Powerful Desire to See Their Completion
    Management Philosophy That Supports Amoeba Management
         Pricing Is Management
         Synchronizing Pricing and Cost Reduction
         A Leader’s Sense of Mission Is Essential in Adapting to Market Changes
         Project Our Abilities into the Future
         Running Long-Lasting Operations
         Achieving Strong Cooperation between Sales and Production
         Always Be Creative in Your Work
         Set Specific Goals
         Strengthening Each Amoeba
         Sustaining an Awareness of the Entire Company
         Leaders Should Take Initiative Rather Than Entrust Everything to the Work Floor
    Cultivating Leaders
         The Ultimate System to Elevate Managerial Awareness
         Meetings Are Opportunities for Educational Guidance
         Set High Targets and Live Each Day with Full Effort
         Shared Awareness of the Significance of Decision-Making Criteria


    Q&A Case Studies from Seiwajyuku Seminars


    Dr. Kazuo Inamori is the director and chairman emeritus of Japan Airlines, the founder of the Kyocera Corporation, and the founder of the KDDI Corporation.

    His website is: http://global.kyocera.com/inamori