Background Of The Tokai Carbon Company Business Essay

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Tokai Carbon Co., Ltd. is a multinational company which is the pioneer of carbon black industry in Japan almost century, established in April 8, 1918 with the head office at Tokyo (Tokai Carbon, 2010, history). Tokai Carbon as a leader who has always maintained a high-performance products and the world's top-class R&D, has manufactured and sold four main carbon products which consist of carbon black, graphite electrodes, fine carbon and friction materials (Tokai Carbon, 2010, Product). Each one is used for specific purposes. Carbon black is used as agent for tires production and coloring agent for printing inks, plastics and paints. Graphite electrodes are consumed in procedures of manufacturing steel. Fine carbon is utilized as main components in the process of making electric devices, solar cells, etc. Friction materials are broadly used for producing clutches and brakes of vehicles and machine. Presently, the company has registered its capital to 22.45 Million Dollars (157.14 million Swedish Krona). (Tokai Carbon, 2009, Annual Report 2008)

In addition, Tokai Carbon first established in Japan to produce carbon black for local demand and export to foreign markets. According to increasing of customers' demand in worldwide, the company has developed international strategies by expanding its business to global market so that company can improve its position to be leader in carbon industry around the world, and gives better and more comprehensive services to its clients. (Tokai Carbon, 2009, Annual Report 2008) As a consequence, based on higher trend of internationalization, Tokai Carbon found up affiliated firm in abroad and the technology is exported in order to respond market demand and compete in worldwide level. Tokai Carbon, mother company which has produced and performed sales activities globally has more than 20 subsidiaries in 8 countries located in Japan and diversified its businesses into three main regions such as North America, Europe and Asia where is coordinative center between headquarters and subsidiaries. (Tokai Carbon, 2010, overseas affiliated companies)

In Thailand, Tokai Carbon who had jointed venture with local partner, Thai Oil Co., Ltd., established Thai affiliated company on October 19, 1989 known as Thai Tokai Carbon Product Co., Ltd. (TCP). Having connection with local partners provide the facilities and services which facilitates the business expansion and easily accesses to existing customers in the market. (Thai Tokai Carbon Product, 2010, TCP history) TCP is well known in Thai carbon black manufacturing and industries. The head office is located in Sathorn, Bangkok and the plant is located in Sriracha, Chonburi. TCP has 6 manufacturing plant units. Each unit can produce different carbon black grades (hard grade and soft grade), with different capacity. Their total annual production capacities recently were 111,000 metric tons. TCP divides the carbon black sales into 2 parts - domestic and export sales. (Interview No.1, personal communication, April 26, 2010) TCP has manufactured and exported carbon black to almost 30 customers in 15 countries all around the world, including Japan, Spain, France, New Zealand, Taiwan, Pakistan, India and the ASEAN countries. In present, TCP aims to expand its market further in Asia Pacific and Europe. As the ISO-9002 certificate, the firm has a passport to international markets, and can produce carbon black with clear proof of global standards (Thai Tokai Carbon Product, 2010, market). Additionally, TCP operates the plant and takes responsibility to the environment and surrounding society with the care. (Thai Tokai Carbon Product, 2010, care)

In China, Tokai Carbon Co., Ltd. had jointed venture with Sumitomo Corporation (China) Co., Ltd. to set up Tokai Carbon Tianjin Co., Ltd. (Tokai Tianjin) of which Tokai carbon own 80% and Sumitomo owns the rest 20%. The plant was established in April 2004 and located in Tianjin Economic and Technological Development Zone for production and sales of Carbon Black, capacity of 40,000 tons per year. (Tokai Carbon Tianjin, 2010, about company)

China is very important market to actively expand business since the consumption rate of carbon black is rising at more than 10%, representing its booming auto industry in China. In year 2001, the demand for carbon black in China has exceeded that in Japan. The move to China is the first time a Japanese carbon black company has set up operations in China. (Tokai Carbon Tianjin, 2010, news) China main products currently are divided into hard and soft two series more than 10 varieties. For the tire, automotive rubber parts, non-rubber manufacturers use to provide varieties and high quality carbon black products. In December 2006, Tokai Tianjin achieved ISO9001 quality management system certification, in January 2008, obtained ISO14001 environmental management system certification, product quality and environmental management to provide a reliable guarantee Tokai Carbon Co., Ltd. Besides, Tokai Tianjin adopts many years the production of carbon black are formed with high-end technology, and gradually expand the energy used to produce special carbon black tires, car parts for low-carbon and the sieve residue use for non-conductive rubber and for the black pigment, production of carbon black ink. Tokai Tianjin provides users with high-quality products and satisfactory, good service, committed to social contribution and the Earth's environment symbiosis. It intends to cooperate with the community and seek common development, continue to give strong support and encouragement. (Tokai Carbon Tianjin, 2010, general management)

5.2 Management, Goals and Objectives

The vision of company is to become the worldwide leader in carbon industry and provide high-quality products. Thus, the company attempt to strengthen the abilities of technological development, achieve stakeholder's expectation and pay attention to social development. (Tokai Carbon, 2009, Annual Report 2008)

The goals and objectives of firm consist of net sales, operating margin, return on equity and return on asset as significant indicators of performances. In order to fulfill the higher of the sales amount, earnings and the capabilities of developing products and technology, the company shows emphasis on the importance of human resources by exchanging personnel regularly among headquarters and foreign subsidiaries. Also, it fosters employees' ability in order to make them succeed easier in expanding its global business. In addition, the firm attempts to develop high quality products through joint partnership with other firms, support education with public institutions in order to strengthen the collaboration between divisions and within organization. The firm also focuses on promoting activities by improving business procedures, increasing the development of innovative value-added products. In the company management, it not only measures the strength of operations in abroad and builds cost-competitiveness in compliance with principle of reliability and four guidelines, but also have internal controls through reporting financial information in accordance with Financial Instruments and Exchange Act (J-SOX). Moreover, the firm goes on to realize environmental preservation, safety, corporate governance and corporate social responsibilities for activities. (Tokai Carbon, 2009, Annual Report 2008)

In relation to corporate governance, the company concerns organizing corporation, improve quality of business management and assure of advanced corporate value. Based on corporate governance, the organization is managed and function of top management is enhanced. (Tokai Carbon, 2009, Annual Report 2008)

Management policies and strategies are designed by Board of Director which comprises nine members. Their meetings are arranged once a month. Board of Director is responsible for making decisions on critical business matters needed by corporate laws. Due to Executive Officer system launched in 1999, Board of Director chooses and appoints Executive Officers who are in charge of handling with business operations in various departments of firm so as to encourage in operational decisions and represent responsibilities clearly. At the same time, the meetings are managed and held by the president and the Executive Officers in diverse business operations in order to consider on managerial issues. Moreover, Board of Corporate Auditor consists of four people who are needed to perform as auditors. It is necessary to attend the meeting of Board of Director, Executive Meeting and other critical meetings in order to supervise the determination, the business performances and express their ideas. These meetings are also arranged once a month or as requested. (Tokai Carbon, 2009, Annual Report 2008)

Moreover, the firm has internal auditing office consisting four people who have duty to improve internal system which originate surveys on all business practices within organization. These surveys are encouraged to perform and all comments for improving are considered and adopted. The outcomes of these audits are informed to the executive directors. In addition, the Corporate Auditors not only attend board meetings and essential meetings in compliance with policies and work allotment setting specified by Board of Corporate Auditors, but also read through and make decisions on key documents. More importantly, they investigate asset management and business action within head office and other subsidiaries and require subsidiary companies to send reports when needed. When internal auditing office has to inform the auditing results and issue instructions, they arrange meeting with Corporate Auditors to start to cooperate examination and exchange ideas on suggestions. This normally assures that information is transferred on personal level and communicative connections are kept existence. (Tokai Carbon, 2009, Annual Report 2008)

Board meetings have been conducted quarterly called as the corporate meeting between HQs and subsidiary both Thai and China. For Thai subsidiary, managing directors and some Chief Executive Officer from Tokai Carbon come to attend board meetings in Thailand. Normally, management team presents the TCP's financial performances to all company's shareholders and committees in order to follow work progress and report the current situation of the company. Moreover, supply meetings are held on monthly basis in order to share customer information and inform current sales volume among department managers so that they all know the TCP situations and then set up the strategies for each department to work efficiently. (Interviewee No.1, personal communication, April 26, 2010) Meanwhile, top management and among deputy departments of Tokai Tianjin have a meeting with executives from headquarters four times a year so as to keep up with ever changing market situations, internal production and financial performances as well. (Interviewee No.2, email, April 26, 2010)

Management team at HQs has a responsibility to evaluate each subsidiary based on financial performances and production capacities at the end of the year. First, Tokai Carbon sets the targets in numerical percentage for each subsidiary to easily be measured and be clear for the subsidiaries to follow. Profit, return on asset (ROA) and return on equity (ROE) have been considered as the criteria of evaluation. The targets have been adjusted every year for the business challenges. When the targets are reached, incentives such as bonus and salary are given to the subsidiaries. The incentives are viewed as the enhancement of subsidiaries' performances. TCP should reach to subsidiary goals and whole corporate goals. Furthermore, Tokai Carbon monitors TCP's behaviors through quality of outcomes. In addition, managers of each department have authority to evaluate employees' performance to give rewards or punishments. (Interviewee No.1, personal communication, April 26, 2010) Similarly, Tokai Tianjin has to reach targets in form of profit, ROA and ROE which are measured in financial percentages. Monetary rewards such as salary and bonus will be given to employees when they fulfill the targets. Tokai Tianjin should carry out activities to respond its goals as well as mother goals. In addition, working progress is used as a tool to control Tokai Tianjin's behaviors. Within subsidiary, department managers are responsible for evaluating their subordinates' performances. (Interviewee No.2, email, April 26, 2010)

5.3 Organization Structure

Under the normal practices, most of decision-makings have to be approved from Tokai Carbon although managing director of TCP has the authorization to control over the management of its subsidiary. Tokai Carbon has primarily authority to control TCP's decision making in terms of marketing, strategies and manufacturing operations. But secondarily, it usually not only coordinates its significant activities like marketing, sales, stocks, finance and performance but also finally TCP makes summary reports to Tokai Carbon. Normally, number of stocks are checked and reported to headquarters every month whereas sales amount are summarized and sent to headquarters every day in order to inform financial performances and present situations. Also, asking for approval from Tokai Carbon is needed before performing any related activities. Most strategies concerning products, marketing, and advertisements are designed and planned by Tokai Carbon for TCP implementation. However, TCP can set local strategies to apply in the competitive environment. Additionally, Tokai Carbon still control TCP by checking financial performances and comparing to goals that TCP has to perform activities to reach them. (Interviewee No.1, personal communication, April 26, 2010) Similar responded by Interviewee No.2, Tokai Tianjin has no power to make decisions in term of marketing activities, manufacturing operations. Moreover, main strategies are also formed by Tokai Carbon and have some adaptations for local operations. Besides, sales and marketing department has to send sales report to head office every day meanwhile production department has to send production report in order to inform HQs about current subsidiary performances. (Interviewee No.2, email, April 26, 2010)

In addition, main carbon products are initially designed by mother company and developed by research & development in Japan so as to respond local and international market (Interviewee No.1, personal communication, April 26, 2010). Referring to research & development, Tokai Carbon has experienced about developing technology for carbon black for sixty years. Tokai Carbon has cooperated with Toyohashi University of Technology and Japan Fine Ceramics Center in order to study carbon products. Since Japanese firms are the experts in advanced technology, R&D for new carbon black grades are conducted at Tokai Carbon as a center of product development and technology. (Tokai Carbon, 2010, research & development)

In case of TCP's research and development, it concerns the modification of production processes. TCP tries to achieve the maximization of production capacity by improving productivity through debottlenecking. In capital-intensive carbon black industry reducing bottleneck can smoothen the production process in the existing plant and increase the output of the whole plant system. Project team is set up by combinations of local technical staffs and technical advisors from headquarters. The key to success is excellent teamwork which goes along with to implementing this system from the start. Good communication and co-operation are concerned as part of ensuring success. (Interviewee No.1, personal communication, April 26, 2010)

Another TCP's development is production expansion which means expanding a new production unit for increasing production capacity of manufacturing plant. Employees from related and existing department of TCP and from Tokai Carbon are formed as special team for analyzing investment information like costs, locations and customers target before expanding a new production unit. Management team has an authority in making decision on this expansion and managing director is the top management who has to propose this project to HQs and ask for approval as a policy. (Interviewee No.1, personal communication, April 26, 2010) Tokai Carbon has continued researching and developing new quality carbon black products and then transfer to Tokai Tianjin. Therefore, R&D for new carbon black products or product modifications is not performed under Chinese subsidiary. (Interviewee No.2, email, April 26, 2010)

With the assistance from HQs in Japan, Tokai Carbon Co., Ltd., there are continuous developments of new grades of carbon black in order to meet the changing demand of automotive industry. TCP aims to provide the premium quality products in accordance with well trained employees. With support of Tokai Carbon, TCP has been able to raise the product quality and control product standard until the products have met the criteria for ISO9002 certificate. Moreover, TCP also keeps personnel along side with the latest developments since managers and employees at all levels have contributed and done hard working. This accomplishment is along with TCP's corporate philosophy, recognized as state of the art production system from inception. (Thai Tokai Carbon Product, 2010, non-stop development) Furthermore, TCP tries to continuously develop both human resources and technology simultaneously to keep up with changing technological innovations, for tire industries and synthetic rubber. (Thai Tokai Carbon Product, 2010, quality assurance)

In relation to main resources in production, feed stock oil is the major raw material which is required in carbon black production approximately ninety percent of all raw materials. Due to the fact that the oil price means the cost of production, this will affect to the price of carbon black product. Hence, this critical decision requires the permission from Tokai Carbon. Marketing managers have to propose the oil suppliers' offers to management team at headquarters. Then, with approval, TCP can purchase oil whereas other minor raw materials are purchased by each subsidiary but with guideline from headquarters. TCP buys raw materials from indigenous suppliers which are from olefin plants and imports from the United States which are from refinery and blender factories. For the US supplier, purchasing agreement has been made in advance at current market price whereas the transit time to deliver the products will take about one month. To be number one of manufacturer in carbon black industry in Thailand, TCP has forcefully tried to maximize customers' satisfaction through product quality and on-time delivery. (Interviewee No.1, personal communication, April 26, 2010) Likewise, for Tokai Tianjin, the purchasing decisions are made by Tokai Carbon headquarters (Interviewee No.2, email, April 26, 2010). In addition, high distribution and logistics costs of carbon black are the reasons why manufacturers have to locate manufacturing base close to markets where carbon black are used by automotive producers. Most raw materials are able to be obtained in China, thus a production base in China meets all criteria for operating overseas. Tokai Tianjin is planned to mainly sell carbon black products with premium-quality to and Japanese tire, rubber parts producers and Euro-American under same service system with Japan. Besides, Tokai Tianjin anticipates the related products, going into non-rubber markets like inks, value-added products needing colorants which depend on the domestic situation. (Tokai Carbon, 2010, IR news)

For other resources like know-how, human resource and money, TCP uses only know-how from headquarters but human resources are acquired from hiring local people and headquarters, whereas TCP use their own capitals like money and from headquarters (Interviewee No.1, personal communication, April 26, 2010). Likewise, interviewee No.2 also provided the same information about these resources (Interviewee No.2, email, April 26, 2010).

5.4 Rotations and trainings

In addition, Tokai Carbon has promoted rotations and trainings between headquarters and subsidiaries. Concerning with doing rotations, Tokai Carbon has useful policy to foster managers or employees to do job rotations both within same country and among other subsidiaries so as to encourage people to learn new knowledge and experience in various aspects from different cultures such as Thailand. For instance, Japanese managers, managing directors or management team from headquarters are sent to subsidiaries in order to manage the business and operation production in Thailand. Meanwhile, Thai subsidiary managers and employees are also rotated to headquarters in order to learn organization management, cultures, working lifestyles and control operations. (Interviewee No.1, personal communication, April 26, 2010) Similarly, Japanese managers are rotated from Tokai Carbon so as to control Tokai Tianjin's management and also share knowledge about technology or learn new thing such as how to control stock in warehouse in China. (Interviewee No.2, email, April 26, 2010)

Besides, trainings are not only another way of increasing knowledge, but also are seen to relationship creator between headquarters and subsidiaries. For Thai subsidiary, not only on the job training and plant visiting orientation are concerned, but also some technical staffs need to be trained by sending to Tokai Carbon for attending further seminars to gain new knowledge about technology from headquarters, conversely, expert technician from Tokai Carbon are also sent to TCP as a consultant for customers in Thailand and provide expertise to TCP. (Interviewee No.1, personal communication, April 26, 2010) While Chinese subsidiary, Japanese trainers came to give knowledge about jobs, goals and rules in order that everyone understands and knows how to meet the targets. Furthermore, training program is provided through orientation and on the job training. (Interviewee No.2, email, April 26, 2010)

In addition, organization culture is embedded through the behavior of Japanese management team. Also, enthusiastic and hard-working can be viewed from Japanese management styles. In addition they are strictly on punctuality and work conservatively under chain of command. Therefore, the subordinates have perceived and then adapted to their working environment. (Interviewee No.1, personal communication, April 26, 2010) For Tokai Tianjin, organization culture is perceived through message or speech of president. Moreover, managing director announcements are usually posted on bulletin board so as to inform annual goal and organizational activities. (Interviewee No.2, email, April 26, 2010)

5.5 Job Allocations and Functions

In order to affirm that all departments commence managing risks on steady levels by minimizing and avoiding them in operation of business, the firm builds system in which all relevant departments are connected together and proper measurements are implemented quickly and precisely. (Tokai Carbon, 2009, Annual Report 2008)

TCP divides and allocates work to each department based on functions. TCP comprises of nine departments named as Production Operations, Marketing, Engineering, Maintenance, Technology Environment and Quality, Logistics, Finance & Accounting, Procurement and Corporate Affairs. TCP's activities focus on sales and marketing (60%) and production (40%) (Interviewee No.1, personal communication, April 26, 2010) Similarly, Tokai Tianjin also has the same department structure as Thai subsidiary and equally focuses on sales & marketing and production (Interviewee No.2, email, April 26, 2010). Marketing department is responsible for taking care of both existing and new customers from which are divided into five groups; main customers, minor customers, auto-parts customers, agent customers and export customers. Also, importing and exporting products are two main duties of marketing officers. TCP has freedom to choose customers independently but TCP has to check the customers' background prior to sending the price proposal. To make sure that these customers are not in the customer list of TCP agent customers since TCP tries to avoid the problem of price competition among stakeholders. Meanwhile, Tokai Carbon finds new customers for TCP in order to sell products as well. (Interviewee No.1, personal communication, April 26, 2010) In the same way, Tokai Tianjin partially selects customers by its own and has to keep up with the new customers that headquarters suggests the firm to deal with (Interviewee No.2, email, April 26, 2010). In addition, generally, Tokai Carbon can produce and distribute carbon products to customers by itself however, when some necessary data like customers, stocks or important issues is required, email is delivered directly and immediately from managing director of Tokai Carbon to TCP managers so as to request those data. What's more, if one subsidiary's products are out of stocks, products will be imported from other subsidiaries and headquarters in order to support each other. One example is that TCP carbon black production has run the maximum production capacity but the products still cannot be served all demands of customers. Therefore, the export sales manager of Thai subsidiary has to coordinate with Tokai Tianjin in China to import carbon black from China manufacturing plant. Telephoning or email are used as means of contact among managers across subsidiaries in order to communicate in details of carbon black price, the required amount of carbon, the schedule plan of transportation and any related documents. (Interviewee No.1, personal communication, April 26, 2010) On the other hand, when Tokai Tianjin runs out of stocks, it contacts privately to other subsidiaries and headquarters so as to request stocks and then they prepare and deliver carbon black to Tokai Tianjin, according to corporate policies. Also, Tokai Tianjin contacts with Tokai Carbon directly through email or telephone when Tokai Carbon requests information about customers and stocks. (Interviewee No.2, email, April 26, 2010)

5.6 Sales Forecast and Planning

Concerning with production management, forecasting is the fundamental of corporate strategic planning in long-term and critical components of a manufacturing system. TCP needs forecasting to effectively improve production operations. Production operations performance has been affected by forecasting accuracy, because forecasting and planning cannot be separated in manufacturing. Error forecasting can damage the best effective plans, and accurate forecasts can be useless by poor planning. Commonly, sales forecast is predicted based on past sales data and performances, furthermore, the market conditions are analyzed and used for forecasting sales. Forecasting plays two basic roles in organization. One is to reduce the range of uncertainty that challenges management. Other is to broaden the range of alternatives available to managers. In each department of TCP, forecasts provide the guidelines to perform each functional area. For finance and accounting department, forecasts are used for cost controlling and budgetary planning. Meanwhile the marketing department is highly relative to production department since marketers are responsible to inform sales forecast in number to the production department based on their experiences and expert opinion to predict customers' demand then production manager can use as references to make the decisions on the scheduling, production capacity and inventory management on a monthly basis. This plan helps the company to balance demand and supply. It can also save opportunity costs of losing sales and inventory cost of holding products in warehouse. Traditionally, these activities involve management team, sales & marketing, finance, and production. It's an aggregate planning, called cross-functional planning. (Interviewee No.1, personal communication, April 26, 2010) For Tokai Tianjin, the management team gets reports from each department and uses them as information to set action plan. (Interviewee No.2, email, April 26, 2010)

However, management team of TCP is the decision maker who set the strategic planning including working process, time plan, budgets and goals for each department to implement. Nonetheless, the report of sales forecast and planning has to send to Tokai Carbon and approval from Tokai Carbon is required before implementation. (Interviewee No.1, personal communication, April 26, 2010) Similarly, top management of Tokai Tianjin is responsible for setting strategic planning and then asks for decision-makings from headquarters as well. (Interviewee No.2, email, April 26, 2010)

5.7 Administrative System

There are four guidelines for members within organization under corporate philosophy. To begin with, everyone has ability to create added value from existing resources in order to achieve the mission. Power and effort enhances the capability of value creation. Next, firm focuses on fair management in order to build value and maintain profits continually. Then, firm concerns environment as one of important stakeholders and business resources. It cares the business management harmony with ecology. Later, firm realizes internationalism and require agreeable guidelines to respond global since it supports manufacture expansion and trustworthy to worldwide. (Tokai Carbon, 2010, corporate philosophy)

The company issued fair business activities, one of corporate policies which controls all activities and is noticed by all top management and other employees. What's more, the firm has also issued a various kinds of internal rules concerning the business affair practice so as to explain the work allotment of organization clearly as well as responsibility and authority. It puts effort to build fair business practice system and obvious financial reports are assured. (Tokai Carbon, 2009, Annual Report 2008)

Moreover, the company emphasizes on transparent business activities as grounded policy. It is essential to reveal information to clients, shareholders, employees and other parties without realizing to advantages and drawbacks of firm. Disclosure information is done according to appropriate laws such as Tokyo Stock Exchange's Rules and Financial Instruments and Exchange Act. Besides, disclosure information contains forecasted operating performance which is made by judgements or assumptions from available information. (Tokai Carbon, 2010, information disclosure policy)

Furthermore, it can be found that Tokai Carbon is preliminarily responsible for designing management structure for TCP, nevertheless Thai subsidiary adopts this structure in compliance to local contexts and requirement. Furthermore, Tokai Carbon has issued policies which are applied globally therefore, TCP adjusts some policies in order to match with international laws & regulations. (Interviewee No.1, personal communication, April 26, 2010) At the same time, Tokai Tianjin also applies management structure set by Tokai Carbon and adapts structure in accordance with its local environment (Interviewee No.2, email, April 26, 2010).

More importantly, TCP employees do their work following job descriptions, company culture practices and policies that have been set by Tokai Carbon. The basic rules for day-to-day operations are to work punctually and do the jobs according to company's policies. In case of any problems, employees have to report directly to their department managers. (Interviewee No.1, personal communication, April 26, 2010) Likewise, Tokai Tianjin has the same administrative structure, meaning that Tokai Tianjin follows operational rules, job descriptions and policies from Tokai Carbon. (Interviewee No.2, email, April 26, 2010) Sometimes, business trip is arranged occasionally in order to strengthen the relationship between headquarters and its subsidiaries. Tokai Carbon has made a visit to TCP plant to check quality of carbon black production (Interviewee No.1, personal communication, April 26, 2010) whereas Tokai Carbon also visits Tokai Tianjin factory in order to inspect the carbon production (Interviewee No.2, email, April 26, 2010). In addition, visiting the customers' plant is another kind of business trip of TCP. Marketing manager can find more customers potential from viewing their plant with state-of-the-art technologies and growing of production developments. Then, he can make a report of customers' research and used for sales forecast. Besides, it helps maintaining relationship with existing customers for a long run business. And in case these customers postpone the payment, visiting is required to check the reliability and creditability of them. Recently, Carbon Black 2009 Perspective in Asia Pacific was set up at Dusit Thani Hotel in Bangkok, Thailand which brought Carbon Black manufacturers together with feedstock oil suppliers from many countries around the world. This conference expressed current status of Carbon Black industry in Asia Pacific and discussed the future growth of this industry as well. The representatives from headquarters and management team of each subsidiary also attended this conference in order to update information and share opinions within company and suppliers. (Interviewee No.1, personal communication, April 26, 2010)

5.8 Philosophy

Firm's operation is based on basic Corporate Philosophy called as reliability. This is defined to reliability between enterprise and its stakeholders who are customers, shareholders, employees and society (Tokai Carbon, 2010, corporate philosophy). The reliability fosters organization to continuously operate. In addition, organization builds other basic policies to manage activities such as "international cooperation, harmonious relationship and the principles of fair corporate activity" (Tokai Carbon, 2009, Annual Report 2008). Furthermore, the company has another philosophy, "immersing ourselves in the field of creation an accepting all challenges in order to improve our competitiveness". (Tokai Carbon, 2010, message from the president)

Tokai Carbon issued Code of Ethics for all directors and employees to promote reasonable business activities according to basic philosophy and guideline for practice. "Code of Ethics consists of fair business activities, compliance, information disclosure, appropriate management of information, Respect for human rights Confrontation with antisocial elements, Respect for overseas cultures and customs, Response to breach of the TOKAI CARBON Code of Ethics". (Tokai Carbon, 2010, corporate philosophy) First, firm should perform business activities through fair competition meanwhile good relationship had better be kept with customers, suppliers, managerial organizations and government. Second, business activities of firm should be performed compliance with rules and regulations including social norms as well. Third, reliable information should be revealed in order to represent business activities' transparency. Fourth, internal and external information such as intellectual property rights for third parties should be managed appropriately. Fifth, each individual should earn the esteem of everyone under working environment while human rights and privacy will be considered strongly and secured properly. Sixth, firm will encounter with some groups who torment social safety. Also, firm does not involve with making illegal or taking improper things into organization. Seventh, business activities will be conducted in accordance with regulations of each country, international laws, cultures and customs in that country. Last, in case of breaking the rules based on Code of Ethics, top management directly investigate the causes and effects in order to protect recurrence. (Tokai Carbon, 2010, corporate philosophy)

In addition, concerning with TCP's philosophy, it strives their best to maintain a high quality of products in order to meet customers' satisfactions through state of the art technology and internationally accepted quality system of ISO9002. Furthermore, the company tries to serve customers by assuring that products are delivered to customers in the right time at competitive prices, following the corporate philosophy as ties of reliability. (Thai Tokai Carbon Product, 2010, corporate philosophy)

On the other hand, the basic philosophy of the Tokai Tianjin focuses on "trust bond" to work for social contributions and the Earth's environment symbiosis. Businesses with customers, employees, investors, and social relations between the so-called powerful people who have a total relationship of trust between the activities of the enterprise support. Pay attention to this "trust bond" business efficiency through business activities, efforts to achieve social contribution of symbiosis with the Earth environment. China has some significance as enterprises seek to develop and grow. (Tokai Carbon Tianjin, 2010, philosophy)