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Language Education and Business in Japan: Another Step in the Nova Saga

By admin - Thu May 03, 5:56 am

Article by Tom Aaron

In late August of this year, the Osaka District Court handed President Nozomu Sahashi of Nova a prison sentence of three and a half years for participating in skimming off employee funds. The crime was committed in 2007, a little before October, when the giant foreign language school went bankrupt.

Prosecutors had sought a five-year sentence and many were surprised that the judge handed down such a severe sentence. Sahashi will undoubtedly appeal and the appeals process will take some time. Some Japanese businessmen sentenced to prison terms never serve them. Nova was Japan’s biggest foreign language school chain and employed more foreign nationals than any other company in Japan.

The Nova Group was founded in August 1981. Nozomu Sahashi opened the first Nova classroom in Shinsaibashi, Osaka with two high school graduates from Sweden and Canada. Sahashi had met them thanks to a friend who was studying abroad in Paris. Over 20 years later at its peak points, Nova was nearing a half a million students with 50% of the total market share calculated according to revenue and a 66% market share calculated according to the number of students.

Nova’s high numbers were thanks to their very aggressive and extensive advertising in newspapers and on television and billboards everywhere. Many Nova classrooms were located in visible locations near train stations, key locations for doing business in Japan. Nova used the Nova pink rabbit as their company character and the rabbit often appeared in television commercials. Children liked the rabbit and its popularity skyrocketed. Nova introduced Nova pink rabbit merchandise, selling over two million dollars worth in the first two weeks alone.

One particularly ugly Nova commercial showed the rabbit getting its ears torn off. JSPCA animal rights activists protested and the Nova pink rabbit began to be used less. Nova used the phrase “study abroad near the train station” as part of its advertising. Nova’s advertising also promised foreign teachers, smaller class sizes, and convenient appointments for students. Forgetting the poor rabbit, Nova was incredibly successful in their advertising and expansion.

Education and service, however, were another story. Nova’s business success was partially built on students purchasing packages consisting of many tickets for lessons. Nova was actually not that expensive if students used all their tickets and took advantage of everything Nova offered for free, including free chat time with their instructors. However, many students did not use their tickets and they expired. In 1997, 18 students took Nova to court. The students said that they were unable to reserve the classes they wanted, the classes that Nova’s advertising had promised, which resulted in their being unable to use all the tickets they had purchased. Agreeing to pay the students back, Nova referred to the episode as a misunderstanding.

Nova’s time in court and losses due to their policies, court cases, and government penalties quickly snowballed. In 2007, Japan’s Supreme Court declared that Nova was using illegal cancellation policies. Only a few months later, a Japanese government ministry ordered Nova to partially suspend business due to Nova’s false advertising. Nova’s losses drove the company into bankruptcy in October. Nova debts were approximately 43.9 billion yen and thousands of unpaid staff including Japanese staff and staff from around the globe.

Sahashi’s prison sentence is just one small part of this Nova debacle. Many of the Nova staff have given up hope of being paid. And the Nova debacle is just one episode in problematic language education in Japan. The Japanese government is trying to improve the communicative English taught in schools. If students learned in school, fewer would have the need to pay for lessons from businesses. As always though, radical reform is difficult. The school system makes improvements in small increments. Major business problems such as Nova’s are eventually handled, but the solution to Japan’s problems in language education, both at academic and business schools, will take decades to solve.

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