If you hear the word “Yakuza” (the Japanese mafia), the first images that come to mind are probably along the lines of: criminal, organized crime, violent. This is all very true – the yakuza are indeed all of the above. The yakuza boasts a membership of nearly 80,000, larger than any other crime syndicate in the entire world. As a criminal entity, they have been a well-established part of the community for decades and decades, and have been known to penetrate almost every sector of the Japanese economy (!). One of the main reasons behind the endurance of this organized crime establishment is that if you look at the yakuza as a business institution, it’s extremely clever and highly adaptable. Not that we’re promoting companies to take on illegal activities or engage in corruption, but there are several things that corporations and companies can learn from the ‘success’ of the yakuza as a long-standing ‘business’, and use these characteristics to their own advantage:
Adapt to the economic situation
To be a successful business, it’s important to be able to ‘read’ the economic situation. What’s the overall situation of the market? What’s in demand, and what’s not in demand? Who’s successful and who’s not, and why? The yakuza have proven to be extremely able in this field. When Japan went through the infamous ‘Bubble era’ in the late 1980s, an era characterized by an overheating of the economy, the yakuza (like all other successful businessmen) jumped right into the booming markets to engage in the successful ventures such as land speculation in the real estate business, or even the art trade. When the Bubble ‘burst’ in 1991, the yakuza returned to their other, more traditional ventures, leaving behind the dying bubble related businesses that would no longer generate income. A successful businessman knows when to engage and invest in which sectors of the market according to the economic climate of the time.
Make good connections
In the yakuza world, ‘good relations’ almost unequivocally means ‘corruption’ and networking with corrupt public officials, but we could take the idea of this and fix it up to fit the more legitimate world of business. Successful yakuza members in history have shown to have a skill in networking with the top guys in the law enforcement or even better, in the government. It’s in fact an open secret in Japan that many past politicians or even prime ministers have had yakuza connections, and having a powerful political or corporate connection behind them have contributed to the yakuza’s success. To be a successful business, it would pay off to know who has the power, and keep note of those who are rising up the ladder of success in other business sectors. It never hurts to have good business connections and networks.
Maintain good relations to other institutions
In the 1990s, the Japanese public was terrorized by a succession of inter-group yakuza wars that resulted in countless acts of violence, injuries, and deaths. Recently, yakuza conflicts have significantly died down (at least, in most areas of the country). Most of the largest syndicates have agreed to opt for more peaceful and ‘diplomatic’ relations with each other in recent years instead of resorting to full-on violence. These yakuza members know that the key to keeping up the success of business ventures is to keep peaceful relations with their competitors. While of course shaky company relations don’t result in civilian deaths, this rule is definitely applicable to legitimate corporations. Most yakuza syndicates appear to maintain this rule with the police as well as other yakuza groups. To keep up the steady growth of a business, it is important to have good relations with other businesses, to avoid clashes undesirable conflicts with other companies that may affect the revenues.
Assess risks and avoid them
Linked to the point above, during the more bloody years characterized by yakuza wars, the public openly turned against the yakuza (while they were never overtly ‘supported’ by the public previously, at least the public generally turned a blind eye on their activities). And as a result, the police began to crack down on the syndicates more severely than in the preceding years. These factors naturally hurt the yakuza’s income-generating activities. Their constant fighting was clearly affecting their business side of things; so the yakuza turned around and assessed these risks as serious, and ended the violent conflict in favor of a more peaceful conflict-resolving method. Additionally, the yakuza began to see the expensive nature of conflicts (investing in weapons, funeral costs…) that was also a risk to their business. The diplomatic way of resolving conflicts was seen as more favorable in eradicating these risks. Risks affect a business in many ways – decreasing the revenues and increasing damages – and so to be a successful business it’s important to assess and minimize these risks, and find more desirable solutions to any problems.
Expand – domestically and internationally
Traditionally the yakuza were a very domestic organization, confined within the coasts of the islands of Japan. Their successes were largely domestic, which could be attributed to their domestic expansion. For example, the biggest and most ‘successful’ syndicate today, the Yamaguchi-gumi, started out in the small harbor city of Kobe and can now be found across the entire country. To further demonstrate their aptitude in business, the yakuza were in tune with the growing progress of globalization and internationalization and, as with all successful businesses these days, they expanded internationally. Today yakuza members and yakuza affiliates can be found in South Korea, Taiwan, the Philippines, and the United States (mainly in Hawai’i and California). The realized the importance of globalization and caught on to the flow, expanding their markets to new territories. Most of the well-known and successful businesses in today’s markets have done the same – they are transnational, international corporations that continue to expand to new parts of the world.