Why was Yamato’s company-wide practice of overcharging not remedied?

The Yomiuri ShimbunThe responsibility for a house-moving firm having left company-wide misconduct uncorrected for many years is grave.

It has been found that a Yamato Holdings Co. subsidiary overcharged corporate customers for its moving service. The subsidiary is said to have demanded fee payments based on its initial estimates, despite the amounts of goods actually transported having been smaller.

Padded bills were charged for about 40 percent of approximately 124,000 orders accepted between May 2016 and June this year, with the excess charges totalling as much as ¥1.7 billion. If the case is backdated to five years ago, the amount is estimated at a significant ¥3.1 billion.

In many cases, moving fees incurred by corporate employees who have been transferred to another office are covered by their companies. The latest case can be described as misconduct committed by exploiting a blind spot in the use of moving services — those relocated to another office easily get inattentive to confirming their moving charges.

At a press conference, Yamato President Masaki Yamauchi explained the matter, saying, “No instruction has been issued [by Yamato] as an organization.”

If so, why did the improper billing practice occur across the whole company? To begin with, did the company not pad its estimates? It is essential to probe the matter even by going so far as to question Yamato’s corporate culture and implement preventive measures.

“I wanted to achieve better results,” one employee gave as his motive, responding to an in-house investigation that has been conducted. This seems to suggest that Yamato’s excessive pay-for-performance system was a factor behind the case.

Yamato has established a third-party commission that includes a lawyer, with the intention of compiling a report on its probe by the end of August.

Establish root cause

If the realities and cause of Yamato’s billing practice are examined in detail, it could reveal a larger number of improper billing cases than those already brought to light. Efforts should be made to quickly uncover the truth behind the cases, including whether successive top executives were involved.

The problem is that no drastic measure was taken despite the company having grasped the realities of improper billing through whistle-blowing in 2011.

The whistle-blower, a male employee, is said to have talked about the problem with his superior over and over again, but his boss turned a deaf ear.

It must be said that there is a flaw in Yamato’s corporate governance, including its internal control.

Yamato has said that the possibility of overcharging individual customers for its moving services is extremely small.

This is because Yamato’s rule requiring fee payments to be made after the completion of moving work is thoroughly followed, the company has said. But has there really been no oversight? It is necessary to carefully inspect the matter.

The house-moving industry faces a serious shortage of workers, mainly drivers. This spring, there was a succession of people who were not able to move properties on their preferred dates, dubbed “house-moving refugees.” This highlighted a problem that must be tackled.

The latest case of Yamato’s overcharging has betrayed consumers’ confidence in the industry, following the problem of house-moving refugees.

It is indispensable to take necessary measures, applying a scalpel to such structural problems as excessive competition and expansive business approaches.

(From The Yomiuri Shimbun, Aug. 5, 2018)Speech


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