Feature Article 3
Toward Realization of a High-growth and High-profit Corporation: Further Understanding and Permeation of Kyocera Accounting Principles

The Kyocera Group carries out various structural reform programs to strengthen our management base so we can realize high growth and high profitability. To maximize the effect of this structural reform, it is important to correctly understand and carry out the Kyocera Accounting Principles, which form the core of the Amoeba Management System. Based on this idea, we conduct various activities.

Importance of the Kyocera Accounting Principles

Kazuo Inamori, founder of Kyocera, understood accounting to be the central nerve of modern management as early as in the founding days and considered it necessary for employees to have an accurate understanding of the status of corporate activity to make the company achieve long-term growth. He then established accounting principles unique to Kyocera based on the judgment criteria, "What is the right thing to do as a human being?" Thus were born the Kyocera Accounting Principles. The Amoeba Management System was designed to allow every employee to do their day-to-day job according to the Kyocera Accounting Principles and enable the entire organization to participate in management so as to achieve further growth.

Establishment of the Kyocera Accounting Principles

Establishment of the Kyocera Accounting Principles

Management Based on the Kyocera Philosophy (Kyocera Management and Accounting Principles)
Management Based on the Kyocera Philosophy (Amoeba Management)

Seven Principles of Kyocera Accounting

The Kyocera Accounting Principles have "seven principles" as a practical guideline to help correctly understand the status of management and thus enable further growth.

1. Principle of Cash-Basis Management
The Principle of Cash-Basis Management describes a simple management style that focuses on the flow of cash. Modern-day accounting has become so complex that it is difficult to see the actual condition of a company. Returning to the original intent of accounting, which is to accurately convey the state of business, we should make management decisions focused on the most important aspect: cash flow.
2. Principle of One-to-One Correspondence
In the daily course of business, both money and goods flow constantly. Any movement of money or goods must be accompanied by the correct documentation. We call this the Principle of One-to-One Correspondence. Strictly following this principle allows the accumulation of daily invoices to accurately correspond with the corporate financial totals. This, in turn, will reflect the true financial status of the corporation.
3. Principle of Muscular Management
If we were to compare a corporation to the human body, the company should strive to maintain a lean, athletic physique with no excess weight. We call this "Muscular Management." This principle is the backbone of Kyocera's accounting.
4. Principle of Perfectionism
The fourth principle is "Perfectionism" and refers to the basic posture of management that aims for perfection in every detail of the business, without any ambiguity or compromise whatsoever. Especially in accounting, 100% accuracy is required.
5. Principle of Double-Check
The fifth principle is "Double-Check," a mechanism that helps prevent people from committing fraud, and sustains the company's integrity beyond accounting to many other aspects of business. Receivables and payables must be cross-checked by different "pairs of eyes." This double-check system secures the integrity of our work and the soundness of the organization.
6. Principle of Profitability Improvement
The most important mission of a corporation is to improve profitability. Kyocera adopted the Amoeba Management System, which is a "small profit center" system, so that all employees can contribute to improving profitability.
7. Principle of Transparent Management
It is important to disclose the true condition of the company openly to employees in order to build strong trust between management and the rest of the work force.This is the reason Kyocera practices transparent management and shares the company's true financial condition, not only with top executives, but with all employees.

Moreover, a publicly owned corporation has an obligation of full disclosure, accurately conveying its true financial condition externally to shareholders and investors as well. Fair disclosure to the outside is thus indispensable.

Kyocera Accounting Principles Understanding and Permeation Activities

In the Kyocera Group, a copy of the Kyocera Accounting Pocketbook is handed out to all employees. Various activities for understanding and permeation of the Principles are conducted depending on the condition of each workplace, such as reading in turn in a morning meeting or a workshop by the department or Group company. Furthermore, education on the Kyocera Accounting Principles is provided by hierarchy so that employees can learn those most appropriate for their post or role.

Group-wide Actions Actions by department or Group company Holding of education by post
Distribution of the Kyocera
   Accounting Pocketbook
Reading in turn in morning meetings
Holding of study meeting where people in
   managerial roles speak about their own
DVD viewing related to accounting
Study meeting utilizing internal portal site
New employee training
Third year training
Promotion training
Holding a project exhibition on the Kyocera Accounting Principles
Kyocera held a project exhibition designed to provide a visually easy-to-understand explanation of the Kyocera Accounting Principles with specific case examples at The Inamori Library, a training facility adjacent to the headquarters building, for about three months from February to April 2017. The exhibition was open not only to Kyocera employees but also to the general public who want to know more about the Kyocera Accounting Principles. The exhibition was composed of panel exhibits, an audiovisual corner, and distribution of cards and episode brochures explaining the basic concept of the Principles. Various events were also thrown during the exhibition period, including lectures by accounting managers and external lecturers and a viewing session to see video lectures by Kyocera founder Kazuo Inamori. A total of over 1,400 visitors visited the exhibition.

The Inamori Library
photo:Exhibition Explanation session

Exhibit space
photo:Exhibition Explanation session

Participants listening to a lecture
photo:Panel display

Exhibit panels

Comments from Employees

I learned the Principles from a different viewpoint, which helped me a lot.
I felt the things all Kyocera employees should understand were compiled in a very easy-to-understand way.
I listened to the lecturer and realized how the Kyocera Accounting Principles were incorporated into the
  management system.

Comment from Education Staff who Planned the Kyocera Accounting Exhibition

We held the Kyocera Accounting Exhibition for about three months from February 2017 at The Inamori Library to provide Kyocera Group employees with an opportunity to obtain an in-depth understanding of the Kyocera Accounting Principles, a theme stated in the management policy. The contents of the books written by Inamori were expressed with illustrations and graphics and used in the exhibitions and explanation sessions so employees could better understand them. The essence of the exhibition was summarized in the reference materials or teaching materials for distribution to Kyocera sites and domestic Group companies.

photo:Comment from Education Manager who Planned the Kyocera Accounting Exhibition

Many participants praised the exhibition during the period, and we realized anew the significance of conveying to Kyocera employees as well as many people the belief of Inamori that "Without understanding of accounting, one cannot manage a company," which is embedded in the Kyocera Accounting Principles. Currently, we are planning to do a similar activity in China and spread to other Group companies outside Japan after that.

We hope Kyocera employees as well as our stakeholders have a better understanding of the management technique of the Kyocera Group.

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