An ordinary person’s contribution to society

2026/05/01

values

An ordinary person’s contribution to society

As I often write and speak about, our company advocates “end-of-life infrastructure” as its philosophy. We define “end-of-life planning” as becoming aware of the end of one’s life and, through that awareness, making more of the life one has left. In Japan’s aging society, increasing the number of people who live well is of paramount importance, and I sincerely believe this is the right prescription for an economy and society that can no longer rely on younger generations. And I believe that leaving this “infrastructure” to society is our way of repaying those who built this rich and beautiful country. We owe today to the excellent infrastructure left behind by our predecessors, and I believe it is our responsibility to leave high-quality infrastructure for future generations.

Now, I would not say I am particularly attached to money. I am just an ordinary person who thinks it would be nice to earn more, spend less, and pay less in taxes. I have never committed a crime, but I have caused trouble for others and done many things that were not right. So, in that sense, I am a bad person.

So I find myself thinking, somewhat in disbelief, how I can have the nerve to talk about lofty ideals, but I suppose that human beings have this kind of dual nature, and I do not feel any need to correct it. When I was younger, I thought business was about making money and was a necessary evil. But I began to think otherwise in my 40s. Business itself is a contribution to society, and the realization of our company’s philosophy is also a form of contribution. Now that I am older, I try to spend as much of my remaining time as possible doing things that are useful to others. All while remaining an ordinary person, and a flawed one at that.

I came across some reflections on business that I wrote 15 years ago. Even reading them now, I think they still hold up fairly well, so I hope you will read them with a sense of amusement.

“Business as a Contribution to Society, and Companies as the System for That Purpose” (“Tenbo,” October 2011)

“Let’s grow sales and increase profits—and work hard to make it happen.” That’s what executives are always telling their employees. Certainly, if profits increase, the company can operate more stably, which in turn contributes to more stable lives and higher incomes for its employees. Many employees who hear this message probably think the same way. Naturally, there is no overt objection. However, many employees may be thinking to themselves, “Even if I work hard, it doesn’t mean my salary will increase…” To begin with, salaries can only be paid out of sales, or more precisely, from gross profit. If funds are temporarily insufficient, it is possible to borrow from somewhere to make payments, but this method cannot be sustained over the long term. When viewed in this light, the message from management to “increase profits” sounds perfectly reasonable.
Working hard = means

Increasing sales and profits = objective

This is the relationship at play here. But is increasing sales and profits truly the company’s objective? That is the theme for this month.

Now, what actions does a company take when its sales increase? To simplify, let us assume a retail business with a cost ratio of 50%, SG&A at 30% of sales, half of which (50%) is labor costs, and an effective tax rate of 50%. If this company’s sales in a given year are 100, the breakdown would be as follows:

Sales: 100
Cost of goods sold: 50
SG&A: 30 (of which labor costs: 15)
Profit before tax: 20
Profit after tax: 10

Next, let us assume that this company’s sales doubled in the following year. Assuming the aforementioned conditions remain unchanged, each item would be as follows:

Sales: 200
Cost of goods sold: 100
SG&A: 60 (of which labor costs: 30)
Profit before tax: 40
Profit after tax: 20

In other words, during this period, the company increases its expenditures by 50 in cost of goods sold and 30 in SG&A (of which 15 is labor costs), and ultimately pays an additional 10 in taxes.
For example, the additional 50 in cost of goods sold is paid to manufacturers and wholesalers for goods, part of the additional 30 in SG&A is paid to advertising agencies as advertising expenses, and the additional 15 in labor costs goes to employee salaries. These increased funds become income for other companies and individuals. Those companies and individuals, in turn, increase their spending in proportion to that higher income, and the money is then paid on to still other companies and individuals. This process continues in turn.

In other words, if many companies increase their sales and profits, more and more companies and individuals will in turn increase their income and spending, and society will become increasingly prosperous. And as a result, if tax revenues increase—assuming those taxes are used appropriately—money will be directed to the areas society needs, and society will become even more prosperous and easier to live in.

At the beginning of this discussion, I wrote that “increasing sales and profits = objective,” but that is only in a narrow sense. In a broader sense, increasing sales and profits means contributing to society. That is to say, through our corporate activities, we are engaged every day in efforts to improve society.

Some people feel a sense of guilt about increasing sales and profits, or view it as a necessary evil, but that kind of thinking is narrow. Similarly, some people—often those engaged in volunteer work—tend to frame things as “volunteering = social contribution” and “companies = a necessary evil for society,” but this too misses the point; both are forms of social contribution. The only difference is that volunteering contributes to a specific area of society, whereas corporate activity contributes to society as a whole.

Business is a means of directly contributing to society by transforming knowledge into goods and services and selling them to people who want them. Companies, in turn, are a remarkable system that enriches society by circulating the proceeds obtained through business to business partners and employees, and by paying taxes. Social contribution is not something reserved for a select few wealthy individuals or philanthropists. It is precisely what we engage in every day through our companies.
Let us recognize this properly and continue working toward building a more prosperous society.

Hirotaka Shimizu
Chairman and CEO
Kamakura Shinsho, Ltd.

Image material：PIXTA

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