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Women at Top Can Snap Japan Company Culture, Berlitz Says

At her first job in Tokyo in the 1970s, Yukako Uchinaga hid in the ladies’ room every day at 8 p.m. while an inspector made sure all female employees had gone home. Then she came out and put in more hours.

“My boss used to say, ‘I don’t want to be put in jail,’” said Uchinaga, Berlitz Corp.’s chief executive officer, referring to a labor law that capped women’s overtime at two hours a day. “I complained it was unfair, like being in a 100- meter race with my hands and feet tied while all my male colleagues ran freely.”

Four decades after Uchinaga played hide and seek with the now-defunct law as an International Business Machines Corp. systems engineer, women occupy just 1 in 70 management positions at Japanese companies. Promoting women would help companies be more diverse and break the “salaryman monoculture” that hinders change and growth, she said.

“Diversity is the key initiative needed in Japan,” Uchinaga, 65, said in an interview. “Making better use of Japan’s female talents, who are educated and trained in the same way as men, should be the first step to promoting diversity.”

Companies must change as the world evolves, Uchinaga said Feb. 29 in Tokyo. Princeton, New Jersey-based Berlitz, which manages 565 learning centers worldwide, is responding to clients’ needs by adding business training to its language courses, she said.

Photographer: Koichi Kamoshida/Bloomberg

Yukako Uchinaga, chief executive officer of Berlitz Corp. Close

Yukako Uchinaga, chief executive officer of Berlitz Corp.

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Photographer: Koichi Kamoshida/Bloomberg

Yukako Uchinaga, chief executive officer of Berlitz Corp.

Overseas Programs

Berlitz offers leadership training programs for executives in Japan, the U.S., Germany and France, and is expanding the business to China, Brazil, Mexico, Spain, Belgium and Colombia, Uchinaga said. Its flagship business program takes executives to China and Brazil to teach them macroeconomics, supply-chain management and politics.

Berlitz, which sold control to Okayama, Japan-based Benesse Holdings Inc. (9783) in 1993, is targeting a sales expansion to $1 billion by the middle of this decade, from $563 million in 2010, Uchinaga said. Revenue at the school rose 21 percent to $320 million in the first half ended June 30.

Benesse (9783) rose 3.6 percent to 4,045 yen at the close in Osaka trading, the highest level since July 8, 2010. The company, whose key products include online shopping sites and magazines for pregnant women and mothers, is scheduled to report 2011 earnings in May.

Sony, Nissan

Uchinaga sits on the boards of Benesse and Sony Corp. (6758) and is an external auditor at Sompo Japan Insurance Inc. She is also chairman of the Japan Women’s Innovative Network, a Tokyo-based nonprofit group that researches and advises on diversity management, helping members such as Nissan Motor Co. advance women’s roles at their companies.

The executive joined IBM’s Japan unit in 1971 after graduating with a degree in theoretical physics from the University of Tokyo. She became the first female board member at IBM Japan in 1995 and was promoted to general manager for Asia- Pacific technical operations in 2004 before heading Berlitz in 2008, according to her biography.

Uchinaga said she was inspired at IBM Japan by Louis Gerstner Jr. The former IBM CEO revived the U.S. computer maker after three straight years of losses through 1993, helped by a strategy of diversification.

IBM was a company with a monoculture, Uchinaga said. Its core management was comprised predominantly of white males, and it had been hugely successful as a business.

Stifling Environment

“Innovations cannot be born in such an environment,” she said.

IBM expanded its minority markets dramatically by promoting diversity in its workforce, David A. Thomas said in the Harvard Business Review. By deliberately seeking ways to reach a broader range of customers, the company saw significant results in its bottom line, Thomson wrote in 2004, citing Gerstner.

Harnessing women is vital for Japan’s flagging economy, according to Goldman Sachs Group Inc. Narrowing the nation’s gender employment gap can boost gross domestic product by as much as 15 percent, based on a 2010 estimate by Goldman Sachs.

“With decreasing population leading to a potentially slowing economy, Japan has no choice but to leverage half its population more fully,” Kathy Matsui, a strategist at Goldman Sachs in Tokyo, said in an interview. “Unless Japan does that, it’s like running a marathon with just one leg.”

Smaller Population

Japan’s economy shrank 0.7 percent in 2011, the first contraction in two years. Its population has been declining since 2006 and will reach an estimated 125.2 million by 2014, according to data compiled by Bloomberg.

The World Economic Forum’s Global Gender Gap Report 2011, tracking measures such as income and education, ranked Japan 98th among 135 countries, behind China, Zimbabwe and Tajikistan. Iceland topped the list, while the U.S. was 17th.

Listed companies in Japan had 40,493 executives in management as of July last year, according to an annual survey by Toyo Keizai Inc., a Tokyo-based researcher on economics and business. Among them, 585, or 1.4 percent, were women, the survey said.

Japan wants to increase the proportion of women in leadership roles at companies and public offices to 30 percent by 2020, according to a Cabinet paper in June 2011.

The most common reason companies give for not having more female managers is a failure to meet promotion criteria, such as recommendations from superiors, the Japan Institute for Labour Policy and Training said last year. Of the 53 companies in the ministry’s survey, 89 percent didn’t provide reasons for not promoting women.

Nomura, Panasonic

A lack of childcare support and inadequate attention to employee diversity in the private sector are among the obstacles to female employment in the nation, Matsui said.

Even after Japan enacted the Equal Employment Opportunity Law in 1986, overtime for women was restricted until the Labor Standards Act was revised in 1997.

Sony appointed Uchinaga a board member because of her expertise in information technology and because it values her advice on diversity management, said Shinji Obana, a spokesman at Japan’s biggest exporter of consumer electronics.

Tokyo-based Sony has had female board members since 2003. By comparison, Nomura Holdings Inc. (8604), Japan’s largest securities firm, and Panasonic Corp. (6752), the nation’s biggest maker of home appliances, were among companies that appointed their first female executives in the past year amid worsening earnings.

Japanese executives are starting to recognize the importance of women in the workforce, Uchinaga said.

“Women will continue to raise their profile in the corporate world,” she said. “We’re still at an early stage of the whole process, but the trend can’t be stopped.”

To contact the reporter on this story: Mariko Yasu in Tokyo at myasu@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net

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