TITLE:
A Comparative Study of Integrated Thinking, Information Connectivity, and Value Creation Based on Integrated Reports of Japanese Companies
AUTHORS:
Kazunori Ito
KEYWORDS:
Integrated Thinking, Integrated Reports of Japanese Companies, Information Connectivity, Value Creation, Stakeholder Engagement
JOURNAL NAME:
Journal of Human Resource and Sustainability Studies,
Vol.9 No.3,
September
9,
2021
ABSTRACT: This study examines three
requirement conformities based on Japan’s excellent integrated reports to use
stakeholder engagement for management: integrated thinking, value creation, and
information connectivity. It aims to clarify how excellent corporate reports of
Japanese companies address these three challenges. Further, I demonstrate that
these three challenges can be easily addressed using a balanced scorecard
(BSC). By introducing a BSC, synergy creation and portfolio management can be
visualized and closely connected through strategic themes. In this study, as
Japanese companies disclose the most integrated reports to the world, I
consider how award-winning Japanese companies address the three issues. The
three companies that have won the Outstanding Company Award thus far are Omron
in 2017, MS & AD in 2018, and NSK in 2019. However, despite having won
grand prizes for their excellent integrated reports in Japan, none of them
succeeded in visualizing the causal relationship between financial and
non-financial information. We assume that visualizing the first type of
information connectivity (i.e., the causality between financial and
non-financial information) is a major issue. The findings of the study are as
follows. First, for integrated thinking, MS & AD was the only company that
visualized synergy creation and portfolio management as corporate strategies.
Omron made use of integrated thinking that emphasized portfolio management,
whereas NSK was not explicit in creating synergies or portfolio management.
Second, the excellent integrated reports of Japanese companies visualized
implementing business strategies to address social issues. Third, after
examining Japan’s excellent integrated reports, information connectivity was
not visualized. Thus, we suggest that value creation and controlling value
damage should be separated to visualize value creation on a strategic map. By
visualizing the value creation process using the BSC when creating an
integrated report, all three requirements can be satisfied.