Sorimachi Speaks

'THE SHAPE OF JAPAN IN THE 21st CENTURY' SERIES, SPECIAL EDITION - PART I

Japan's First Stock Corporation University Opens

	I am delighted to announce that LEC TOKYO LEGAL MIND UNIVERSITY commenced operations in April 2004 and acknowledge my gratitude to the many who supported this endeavor. This and the next edition of 'The Shape of Japan in the 21st Century' will be devoted to an introduction of LEC University through answers to the questions I am frequently asked concerning the university.
Q.	What was the stimulus for setting up the university and how did it come about?
A.	I had received a variety of information and guidance in relation to Special Zones from various government departments through information gathering undertaken for the LEC periodical publication Japanese Law & Culture, which is a policy discussion forum, something like a private thinktank. An examination of the Law on Special Zones for Structural Reform shows that the education sector is given a preeminent place. As we were a joint stock company operating in the education sector, we conducted a detailed investigation into whether it was natural that we form a university. It was after the government made its proposal for Special Zones for universities and the local government made an application for a Special Zone, that we made an Application for Approval for the Establishment of a University.
Q.	Turning to the internal workings of the LEC Tokyo Legal Mind University, why did you establish a General Careers Faculty and a General Career Studies course and what is the significance of this?
A.	We have been carrying out instruction for the purposes of obtaining qualifications and passing national examinations as a joint stock company for 25 years. This is what the consumers needed and this is all the more reason why we took the form of a joint stock company to this point. What university students, the users of universities, want now, is to be trained as human resources who will, if they look for work in business, match the needs of business recruiters, in other words who will be immediately effective recruits. According to the results of a survey*1 recently released by the Ministry of Health, Labour and Welfare, the 7 abilities listed as most important by business when recruiting are (1) proficiency in communication, (2) basic academic ability, (3) a sense of responsibility, (4) a positive, extroverted attitude, (5) having obtained qualifications, (6) being energetic and (7) business etiquette. These are considered important elements of the substance of the immediate effectiveness sought by business. We at LEC University therefore consider that we want to go further in response to such needs. Until now there has been a certain group of students who have aimed at a qualification. It has been fine for this group to obtain their qualifications and set up in business or become a professional, but this leaves the great majority of students who seek to be hired by business. As it is business that is doing the hiring, if we do not put together curricula that comply with the demands of business, we do the students a disservice. If we ask what are the needs of the business side of the transaction, the needs of business are the abilities mentioned before. This being the case, we decided to include this content in our curricula. The specialist knowledge and applications necessary for the departments in a business - general affairs, finance, personnel, sales, marketing, and production - are all within a company. However we do not know to what company department a university graduate will be assigned. . Even if the graduate in question says he wants to go to accounting, if he has no knowledge of accounting he may end up standing at the storefront. It follows that new recruits must study the whole breadth of basic knowledge about companies. It will not do to just study the law as in the law faculty or to just study economics as in the economics faculty. The concept is to have them get a firm grasp of business etiquette, to get a firm grasp on communication ability, to have every one of them learn the 7 proficiencies in the survey mentioned above, particular as 1st and 2nd year students. If a student is particularly good at accounting then they can specialize in accounting as a 3rd and 4th year student, progressing further and further in that direction, for example studying to become a licensed tax accountant or a Certified Public Accountant (CPA). What is more, increasing numbers of those who pass the CPA exam enter companies as recruits. Taking an expansive view of this fact the categories of law faculty, economics faculty or business management faculty are inadequate. The word "career" is used frequently in the business world, in terms such as 'improved career prospects', 'career studies' and 'career orientation'. Further, the numbers of mature age students are on the rise in Japan. These are those who enter company and then return to attend LEC to study for qualifications or those who enter the workforce for 2 or 3 years after finishing high school and then go to university. Since mature age students come to LEC with the aim of improving their career prospects, we thought it might be good to use "Career" in the names for the course and faculty. Since, in the end, the content taught is broad, we decided on the name "General Careers Faculty" for the faculty, partly also because we received suggestions to that effect.
Q.	Does the fact that a university in the form of a joint stock corporation has been established for the first time indicate that what is demanded of tertiary education has also changed? In other words, does it mean that the existing private universities are not meeting the needs of consumers?
A.	Joint stock corporations are entities that cannot exist if they not meet societal needs. They have consumers, self-supporting accounting systems, make sales, pay expenses and tax and this forms the public finances that support Japan. To be specific, this is the structure of the modern capitalist state; they are the essence of society. Although this is more than self-evident, the nation will be healthy so long as joint stock corporations are healthy and the citizenry will also be raised up as a healthy community. Considering today's Japan, however, the sector outside joint stock corporations, the government market, is far too overpopulated. This sector does not have a capitalist structure. I define the fields of business with tax reductions and exemptions as the government market and consider that the current Japan Post, Japan Highway Public Corporation, public service corporations and social welfare corporations, amongst other, meet these criteria. Further, there are many businesses in the government market operated by the third sector, including educational, agricultural, medical and welfare and nursing-care businesses, which are exempt from or pay a reduced rate of state and local government taxation. To illustrate, joint stock corporations operate 721 of a total of 4,168 universities and junior colleges in America. This means that 17.7% of these institutions in the U.S. are set up as joint stock corporations and it is actually this group that is apparently on the increase recently.*2 If we look at this reality then it is clear that in Japan too we need joint stock corporations to open up the government market. 'Privatize whatever can be done privately' is a highly desirable policy for the nation in these times. This is our view and this is also no doubt the reason why the government created the Special Zones Law. Moreover, proceeding along that route should, I think, be the catalyst for positive change in the field of education. In this sense the question above does indeed describe the situation.
Q.	You have actually been through the process of establishing the LEC University. Can you tell us what was the most difficult thing you encountered during the process?
A.	The Special Zones Law gives permission for joint stock corporation educational enterprises. The structure within which this education is to be delivered is strict compliance with the rules and standards applied by the Ministry of Education, Culture, Sports, Science and Technology (MEXT) to educational corporations. We have, as a corporation, had courses and products that have had the support of consumers through the intensely difficult conditions of the last 25 years. On the other hand, universities receive state grants and are protected by a set up inside which they pay neither state nor local taxes. Since the situation is that the government is seeking to apply rules and standards for universities to we who have a 25-year history of operating as a joint stock corporation, it is inevitable that there will be frustrations. These differences have perplexed both LEC and the authorities concerned.
Q.	Does the creation of universities in Special Zones mean, in a variety of contexts, that there has been deregulation?
A.	The doorway to deregulation has simply been acknowledged, actual operational deregulation has not occurred. Certainly there has been important deregulation of practical matters, such as that leased accommodation is accepted for school buildings. However, operationally speaking, whether it is the number of hours teaching required for a unit, prerequisites for lecturers or the curriculum structure, other requirements are identical to those for existing universities. MEXT states its position as being that if a university it has approved then cuts corners and behaves inappropriately it will be MEXT, which gave the approval that has to bear the blame. However, from our point of view, consumers make decisions on products in an ever-changing manner. Since we develop new products in response to consumer demands, if we make unilateral decisions on products ignoring the wishes of consumers these will immediately fail to receive consumer support and our company will collapse. Consumers will not tolerate our protests that we have complied with MEXT directions. Customer satisfaction is an ironclad principle of the joint stock corporation. It is unlikely that there is such a thing as business management that contravenes the principles of consumerism and this makes anything like corner cutting unthinkable
Q.	Why did you take the path of choosing a joint stock corporation rather than an educational corporation?
A.	Educational corporations can receive subsidies and do not pay tax and yet, even so, there are many universities operating in deficit. Japan is moving towards a policy of reducing the amount of subsidies and increasing the numbers of entities paying tax. In any event the domestic administration is doing its best to reduce fiscal deficits and revitalize business. If we were to become an educational corporation this would bring about the unfortunate consequence of our receiving subsidies and, moreover, not paying tax. Since the state is waving the flag of the entire populace pulling together as one to increase tax revenues and reduce subsidies we think that conformity is a desirable decision for us as a corporate citizen.
Q.	Did you take the decision to create a university because the Special Zones were formed?
A.	Since our joint stock corporation has achieved exemplary management we did not have a vision for creating a university in the form of an educational corporation. We decided to establish a university because the special educational zones proposed by the government in this instance would benefit Japan, students and state finances as well as opening up the government market and also being profitable.
Q.	The format LEC has taken in the past is as a cram school for obtaining qualifications. Can you comment on the suggestion that one reason behind the creation of the university was that a great many LEC students were ﾔdouble schoolingﾕ (attending two institutions at once)?
A.	What university students need and want is to study at university, go out into society and make a living doing the sort of job they desire to do. However, even if they study for 4 years they are doubtful whether they have mastered what will actually be useful to them when each enters the workforce. Market principles should be introduced and products provided that fit the needs in business if we are to resolve this doubt. This is why we created the General Careers Faculty
Q.	So is the greatest advantage of attendance at LEC University that a student can both study for a qualification and receive a university education, removing the need for ﾔdouble schoolingﾕ?
A.	We surveyed students attending LEC on this point.*3 Students who are currently attending another university study at LEC only at night but they will not only be able to attend LEC all day but also receive university level credits. The removal of the need for double schooling will give them time for research into areas of special interest, participation in hobby groups and casual work and is excellent in terms in efficient time use. More than 85.8% of respondents hoped that LEC would become a university. This being the case and it being necessary for the removal of double schooling to begin with the establishment of faculties led to us commencing with that step. If anything the content of the education we are now providing is at Masters level and stresses practical business, however in terms of student needs it is undergraduate students who are actually attending so the demand was for us to begin by establishing a faculty. Mature age students have requested, rather than qualifications as such, more practical and specialized teaching building on previous obtained qualifications and so we feel we will also need to establish a graduate school in future.
Q.	What kind of graduate school will you be setting up and when will this happen?
A.	We are aiming at opening the graduate school in April 2005 and are looking into what we will offer now. Students who find it difficult to pass national examinations for qualifications whilst studying at university are on the rise. Our university offers a broad range of specialist qualifications in law, economics, management, accounting, IT and welfare. Specialist occupational graduate schools are also attractive to students. A student will be able to come to our university and study for a qualification at the same time as studying for a Masters degree, resulting in the award of both. At present we are thinking that it will probably be best for us to create a legal stream and an accounting stream.
Q.	Does a ﾔlegal streamﾕ mean a graduate law school?
A.	No. A graduate law school is a specialist occupational graduate school. What LEC hopes to create is a research school, in other words a postgraduate school similar to those now in existence.
Q.	If graduate law schools open and the new National Bar Examination also commences, the current National Bar Examination will disappear in 5 years. Doesnﾕt this mean it would be better to set up a graduate law school?
A.	Whilst I know this is a widely held view, the graduate law schools system began because the National Bar Examination cram schools ﾐ in particular LEC, which is a major player amongst such cram schools ﾐ was seen as undesirable. The very reason for the introduction of the new system should not be taking advantage of the same by itself setting up a graduate law school, whether this is a matter of etiquette, logic or moral sense. It is for others to set up graduate law schools first and obvious that we should refrain.
Q.	Wonﾕt the establishment of graduate law schools mean that there will be a decline in the students coming to LEC?
A.	Whilst we are often asked if the end of the National Bar Examination will mean the collapse of LEC, there will for example be a new aptitude test for entry into graduate law schools. Moreover, within the graduate law schools there will be a postgraduate law degree stream for those who have undergraduate law degrees that will be completed in 2 years and there will be a legal examination in order to enter that stream. The fact that we are offering courses in preparation for these examinations means our sales have increased on previous figures.
Q.	So it will be best for LEC if there is rapid growth in the establishment of graduate law schools?
A.	Since it is the consumers who decide which product is the best, the principles of the market economy mean that an industry will flourish to the extent that the consumers are satisfied. This tenet does not change in a mature capitalist society like Japan where the populace has a high intellectual level, even in education, which is a public asset. If the new graduate law schools respond to the needs of consumers they will no doubt develop. The converse is that graduate law schools unable to respond to the societyﾕs demands of legal professionals will be unable to go on. It has always been our desire that the numbers in the legal professions would increase so we would enthusiastically welcome an increase in graduate law schools with the support of consumers.
Q.	You will be in competition with private universities from now on. How confident do you feel about this?
A.	We donﾕt intend to compete with existing universities. Managers focus every day from dawn to dusk, not on a consciousness of competition with others, but on the direct, steady and straightforward provision of services precisely targeted to consumer needs that will satisfy consumers, in other words on the goal of customer satisfaction. This means that this is where we pour 100% of our energy. It is not that there is no observation of others and desire to emulate them, however this is not the proper way to do business. This is not a fundamental principle for managers. It goes without saying that even if others are not doing something, if our clients ask us to do it we will do so. To illustrate, even where no university would do a certain thing, the joint stock company is of a nature that it would do it. This is why other universities are not our competitors.
Q.	Can you name your competitor faculties and courses?
A.	We donﾕt have any in particular. The studentsﾕ chief concern is that they are unable to enter the workforce. If we want to know what we should teach them we will not learn the answer by asking students. If we ask companies they do not know exactly. Whilst the survey I mentioned before did give rough answers, ﾒcompaniesﾓ includes some 2.5~2.6 million firms so it is unlikely that we will understand all their needs. It is also impractical to ask each separately. This means that, for our part, if we are asked who is our ﾒrivalﾓ, our ﾒrivalﾓ is the definition of what exactly the cultivation of immediately effective human resources means. If we are able to grapple with and surmount this major issue of the cultivation of immediately effective human resources and develop this product students should be able to gain employment. This itself is our greatest target and it is therefore pointless to be thinking about some other faculty of some other university. (To be continuedﾉ)

*1
Results of Survey into the Actual Conditions Concerning the Employability of Young Persons (Ministry of Health, Labour and Welfare, 29 January 2004.)
*2
National Center for Education Statistics (NCES) http://nces.ed.gov
*3
We conducted a survey of LEC students from May to July 2003 entitled ﾒSurvey of Awareness in relation to Double Schoolingﾓ (3190 responses received out of 4844 students). According to this survey 47.3% of respondents were attending classes at university almost every day whereas 90.2% were attending LEC lectures. When asked which was of more value in terms of building a career in the real world, the answers in favor of the LEC lectures was overwhelming.

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