Dialogue: "Sampo-yoshi" and ITOCHU

CAO Fumihiko Kobayashi interviewed Professor Hideki Usami, a leading researcher on the merchants of Ohmi, about the origins of “Sampo-yoshi,” which is the new ITOCHU Group corporate mission from April 2020, the common ground between the spirit and ITOCHU’s current management policies, and the ideal shape of management amid the increasing importance of ESG.


Kobayashi: On April 1, 2020, the ITOCHU Group declared “Sampo-yoshi” as its new corporate mission. On this occasion, ITOCHU consulted with Professor Hideki Usami, a leading researcher on the merchants of Ohmi. Professor Usami presents the view that the spirit of “Sampo-yoshi” can be found in the business practices of Chubei Itoh I, whose personal motto was “Trade is a compassionate business. It is noble when it accords with the spirit of Buddha by profiting those who sell and those who buy and supplying the needs of the society.” Would you mind explaining, once again, the meaning behind the words “Sampo-yoshi”?

Usami: For starters, I must clarify that “Sampo-yoshi” is a neologism created by researchers studying the merchants of Ohmi, and that Chubei Itoh I did not come up with the phrase itself. In addition, “Sampo-yoshi” is well known across Japan for consisting of three sides, “urite-yoshi (meaning “good for the seller”), kaite-yoshi (meaning “good for the buyer”), seken-yoshi (meaning “good for society”).” The use of “for” (“ni” in Japanese) before “good” (“yoshi”) is correct Japanese, in my opinion. Therefore, the correct phrase should be “urite-ni-yoshi, kaite-ni-yoshi, seken-ni-yoshi.” In the history of the merchants of Ohmi, the expression “Sampo-yoshi” began to appear after Professor Eiichiro Ogura of Shiga University used the term in 1988 to describe the trading philosophy of the merchants of Ohmi in his book Omi Shonin no keiei (Management Practices of the Merchants of Ohmi). Chubei Itoh I’s personal motto is an exemplification of this philosophy in a management mindset, which is “Trade is a compassionate business. It is noble when it accords with the spirit of Buddha by profiting those who sell and those who buy and supplying the needs of the society.”

Kobayashi: In modern Japanese society, “Sampo-yoshi” has become a phrase that everyone has heard of before, but not many people are clearly aware of its origins.

Usami: There are various opinions about the origins of “Sampo-yoshi.” One view is that it came from the Jihei Nakamura family motto, but I have not found evidence of the “urite-ni-yoshi, kaite-ni-yoshi, seken-ni-yoshi” expression. The first appearance of the expression can be traced to Chubei Itoh I. On their outward journeys, the merchants of Ohmi traveled up to other countries and sold merchandise from Kyoto, Osaka and other parts of the Kinki region, in addition to those from Ohmi. On their return journeys, the merchants bought specialties in other countries and sold them in the Ohmi and Kinki region. This trade practice was called “saw trading,” and it gave rise for merchants to open stores for trading specialties from various regions between the merchants of other countries. These merchants were outsiders (“yosomono”) in foreign lands, so they had to heed the trade practices rooted in each region. The trading style of these unique merchants of Ohmi persisted over many long years, culminating in the “Sampo-yoshi” spirit. Chubei Itoh I was the first person to put this trading philosophy into words. In Japan, I believe ITOCHU and Marubeni are the only companies that can claim “Sampo-yoshi” as their founding spirit because they can count Chubei Itoh I as their founder.

I think it will be important how “Sampo-yoshi” is perceived and practiced in modern business.

Hideki Usami
Professor Emeritus of Shiga University

Born in 1951 in Fukui Prefecture, Mr. Usami is a former director of Archival Museum for the Faculty of Economics at Shiga University. He is a famous researcher in the business and social activities of the merchants of Ohmi. He is also the author of Cherishing the Memory of Chubei Itoh I (Seibundo Publishing) and Ohmi Fuzokushi (Morisada Mankou) (Castigation, Iwanami Shoten).

Kobayashi: Thank you for that explanation. After the bubble economy collapsed in Japan, Japanese firms did not hesitate to embrace the concept of shareholder capitalism and related systems from Europe and the United States. In the past, it was well understood that a company belongs to shareholders and it should behave in ways to maximize shareholder returns. Once a consensus formed among institutional investors and leaders in the business world that pursuing only shareholder returns would not ensure the sustainability of a company, the SDGs and ESG investment began to catch on as an underlying trend. SDGs and ESG concepts encourage companies to contribute to the development of the world by increasing benefits for people other than shareholders, while also striving to increase shareholder value. I believe these concepts align perfectly with the sayings of Chubei Itoh I. ITOCHU’s corporate activities carry on the spirit of Chubei Itoh I, guided by the idea that trade “accords with the spirit of Buddha.” To put it another way in modern-day language, companies have the mission of bringing profits to society at large.

Usami: The merchants of Ohmi’s idea of returning profit to society is deeply rooted in their practice of “evenly splitting net profit three ways.” Retailers were the customers of merchants of Ohmi, which were effectively wholesalers, and people living in the region, who bought this merchandise, were the customers of these retailers. If the people did not have stable lifestyles, the merchants would not be able to conduct trade for long, and this is why the merchants of Ohmi were keen to make sure people in their target region could carry out their lives without disruption. It is noteworthy that the merchants naturally adopted the concept of “intoku zenji,” or constantly making improvements without outwardly telling other people. Not only providing aid to people after natural disasters struck, the merchants also helped the impoverished in regional communities, by employing people in the construction of non-essential storehouses and residences. Such “helpful” construction was one example of how the merchants gave back to the world (“good for society”). Rooted in the Friedman-style concept of free market capitalism, businesses in Europe and the United States sought to maximize profits as the ultimate good. In contrast, the merchants of Ohmi, which valued collective harmony preconditioned on mutual aid, had clearly different views on profits. Their idea that employees were joint partners also tends to be dismissed from the viewpoint of free market capitalism. I believe it is important to nurture ideal values depending on historical and cultural perspectives.

Kobayashi: ITOCHU’s current approach to business, sharing its value between the Company, employees, shareholders and other providers of capital, suppliers, and society aligns with the idea of “evenly splitting net profit three ways.” For example, ITOCHU’s Stock Compensation Scheme is designed with the intention of improving the awareness of employees’ participation in management.

Usami: The merchants of Ohmi dealt with the society, a collective entity of specific minorities connected together by relationships. Modern corporations deal with society, a collection of an unknown number of independent individuals. The scope of profit distribution has spread to areas where there are no direct transactions. If profits are distributed to broader society, pursuing more profits in itself is not a negative thing. When pursuing profits, however, it must not be forgotten that profits should not be pursued just for the sake of profits. In other words, it is essential that corporations engage in “trading in good faith.” Among the merchants of Ohmi, the phrase “regretting after the sale is the essence as the merchants” was conveyed. They believed that even if a selling price were regretfully low, intentionally selling at this price to a willing buyer would gain the trust of the customer and lead to more profits over the long run. Chubei Itoh I encouraged cash transactions, in which buyers (retailers) purchase merchandise within their own financial capacity, without putting them at a disadvantage, such as by loading them with unnecessary inventories. I believe this is one example of “trading in good faith” with due consideration given to the customer. By gaining the trust of customers and forming relationships based on this trust, profits can increase in perpetuity. By distributing these profits to the world, the concept of “evenly splitting net profit three ways” is an idea similar to SDGs in modern society, in my opinion.

Kobayashi: The word “trust” in Professor Usami’s comments is a key word that the merchants of Ohmi have in common with ITOCHU today. The linen trading that Chubei Itoh I began with his carrying pole entailed showing samples of merchandise to customers, taking orders, and then receiving payment after the merchandise is delivered from the site of production. If trust is lost at a single point along these series of transactions, the trading could not continue over the long term. Although times have changed, ITOCHU strives to achieve its targets every period through commitment-based management. It is based on the idea that building the trust of all stakeholders every period, including shareholders, is essential to gaining trust in ITOCHU’s medium- to long-term vision and the management based on it. This is a common thread that extends back to the merchants in their heyday.

Usami: The merchants of Ohmi had the expression “trading is like the drooling saliva of a cow.” This expression means that continuing to trade over several generations is better than making a fortune for only one generation. Lists ranking of the merchants of Ohmi still exist today, and the highestranked merchants are the well-known families that managed to trade over the most generations. Even if a fortune created a prosperous merchant family for one generation, it was not recognized if they could not continue business. Regardless of changes in trading methods, merchandise handled, and the social fabric, the merchant families that passed down a spirit of “Sampo-yoshi,” thrift and frugal, and a spirit of building trust through their family mottoes and store rules that spanned generations are the ones that continued long and small business small business based on trust of their family, successfully having stayed in business in their communities.

Kobayashi: The families that ran a successful trading business over the long term became the most distinguished families. I believe this aligns with the way modern corporations focus on sustainability as an assessment criteria. To summarize our conversation today, “Sampo-yoshi,” as a phrase of the condensed spirit of the merchants of Ohmi, can be viewed as a straightforward expression of the cutting-edge economic value systems in the world today. Now that ITOCHU has a new Group corporate mission with “Sampo-yoshi,” I believe ITOCHU has astutely aligned itself with modern social trends. At ITOCHU, managers in the past have all embodied the spirit of “Sampo-yoshi,” and this spirit has embedded itself in the hearts and minds of each and every employee. I am very proud that ITOCHU has taken a corporate stance that dovetails with the concept of an ideal corporation needed the world over.

Usami: I think it will be important how “Sampo-yoshi” is perceived and practiced in modern business. In this context, I believe ITOCHU needs to shed more light on the future it envisions. ITOCHU’s goal of becoming the top general trading company is a major motivation for employees. As this is achieved in the future, I believe employees will be even more motivated if management further clarifies its vision for ITOCHU as “a company working for the benefit of society.” In my opinion, each and every employee must have a sense of their own mission, and an idea of the better future that can be created from their own position, starting with the “I am One with Infinite Missions” Guideline of Conduct, amid a growing need to contribute to society and management focusing more on various stakeholders around the world, not just customers and suppliers. While adhering to the code of conduct in the spirit of “Sampo-yoshi,” I hope that ITOCHU continues to put this spirit into practice while adjusting with the times.

Kobayashi: In these hard times during the COVID-19 pandemic, I felt strongly that our corporate mission should be a compass for all employees. Our “Sampo-yoshi” corporate mission and “I am One with Infinite Missions” Guideline of Conduct have served as a psychological prop for our employees working on the front lines and our employees working from home during the COVID-19 pandemic. As the ones who have inherited the spirit of “Sampo-yoshi,” we carry out the mission asked of each of us. This is a universal and easy-to-grasp concept. Our corporate mission and Guideline of Conduct empower our employees to think on their own and fulfill their own mission when protecting the Company, their families, and our customers.

II believe the change in our corporate mission has allowed our employees to rethink the meaning of “Sampo-yoshi” from a sustainability standpoint. I would like to thank Professor Usami once again for providing us with a springboard. Thank you for setting aside the time for this discussion today.

In these hard times during the COVID-19 pandemic, I felt strongly that our corporate mission should be a compass for all employees.

Fumihiko Kobayashi
Member of the Board, Senior Managing Executive Officer, CAO