THE CHARACTERISTICS OF BUSINESS
MANAGEMENT IN
—Its Historical Consideration before World War II
Yasujiro Yamamoto
All of the five articles in this special issue were read at the fifth annual
meeting of the Business History Society of Japan which was held at the
In the opening address, Yamamoto explained why the fifth annual meet-
ing had chosen the Characteristics of Business Management in
its central subject, looking back to the central subjects from the first to
the fourth meetings. He emphasized the influence of business manage-
ment upon the economic growth and then introduced
Richman's theories which view the management as the most important
dynamic force of economic development, and lastly pointed out three problems
to be answered about the central subject: (1) How should the management
functions in rapid economic growth in
are the characteristics of Japanese business management ? and (3) Through
what processes have they been formed historically ? Following Yamamoto's
introduction, four papers were read.
The first paper by Sugiyama of the
Japanese characteristics of business management through the comparison
and analysis of the financial management of the cotton-spinning companies
in the pre-War period.
The second speaker, Yoshida of Keio Ueiversity, explored the central
subject by explaining the history of production management in the elect-
ric manufacturing industries.
The third speaker, Hazama of Tokyo University of Education, approached
the subject by investigating the Japanese paternalistic style of labor manage-
ment during the World War I period.
The fourth and last speaker,
management philosophy of Mitsubishi with that of Mitsui and discussec
Japanese characteristics of management organization.
After these reports, a panel discussion J)n the above subject was held
and
symposium.
TECHNICAL PROGRESS AND ENTREPRENEURIAL
CHOICE OF TECHNOLOGY
Akio Ookochi
Technology in business enterprise is defined as the way of doing daily
work; then, the definition of technical progress in business enterprise should
be the change in the way of doing work; change here means the creation
of a new way of doing work and the exploitation of new horizons
in business activities. From this view point of "change in the way",
technology in business enterprise could, according to a) whether it implies
the change or not, b) what is the character of the way of change, be
classified into the following four traits, or classes. 1) Basic innovative
technology, based mainly on scientific research, exploiting and providing a
new technical sphere, for example, the discovery of penicillin and invention
of a method of extracting it, which opened the world of antibiotic, 2)
Applied technology, which develop the various potential possibilities in the
technical sphere exploited by basic innovative technology, 3) Imitative
technology, 4) Conventional unchanging technology, which refuses to be
changed or fails to recognize the necessity of changing the way.
For the growth of business enterprise, basic innovative technology has
the most promising perspectives, protected by patent right, both domestic
and international, though it is accompanied by the greatest risk.
With applied technology, a business enterprise could have great success,
sometimes greater than the achievement of "basic innovative technology"
enterprise. This success is, however, limited only within the sphere defined
by the basic innovative technology.
Which class of technology should be used in a certain business enterprise
is the problem of entrepreneurial choice, decided by the entrepreneur's
perception of technology.
LABOUR MANAGEMENT IN THE INDUSTRIAL
REVOLUTION IN
Yoshitaka Suzukiu
This thesis deals with two aspects of labour
management of the
cotton industry during the first half of the 1830's; 1) organization within
workshops and 2) the efficient use of labour. The main difficulties of
these two aspects as faced by mill-owners during the Industrial Revolution
Era has been repeatedly pointed out by Andrew Ure.
1) As regards organization within workshops: as a conclusion of the
author's study of that "Indirect Employment by the Master", the interven-
tion by the mill-owner in the matter of the management is clearly seen
in several points. On the other hand, under "Direct Employment by the
Masters', the centralized management by mill-owners can be seen but even
in that case there was no completed organization of management from
the first. The work of the overseer was differenciated because of the
division of processes, due to the expansion of the mills, and the regulation
of the organization of operation.
2) As regards the efficient use of labour: though attention was paid to
the appropriate placement of the labour and the skill, the maintenance of
factory discipline was the most significant. For the maintaining of discipline
the use of fines and threat importance was attached to educating for the
purpose of moral improvement.
THE DEVELOPMENT OF SENIORITY
SYSTEM IN THE UNITED STATES
Eisuke Daito
It is generally believed that American workers move much more freely
than Japanese employees. But relatively little attention has been paid to
the fact that the rate of turnover in the period of World War I was
reduced to one-third in the 1950's.
For the main reason why the rate of turnover has become lower, we
can point out the fact that the seniority system has spread throughout
the industries in
though the debate about seniority and management prerogatives in
furious, governs not only lay-off and re-call but also promotion, transfer,
paid holidays, and many other fringe-benefits.
Under these circumstances, the problem of the gain accompanied with
long service and the loss accused by the employment change is important.
Therefore, it is no wonder that American workers no longer quit so
freely as before.
Historically, seniority was not the management but union policy. The
Management, however, seemed to have good grounds for accepting the
unions' demands and we can attribute the rapid diffusion of seniority to the
following two factors.
First, according to several studies, work organization, with the growth
of mass-production, had been formed as a promotion ladder by the 1930's,
and it had been a rather common practice to fill a job vacancy, not with
the one from outside, but by promotion within the firm.
As a result, in the absence of unions, the order of lay-off by and large,
comformed to the seniority principle.
Second, the principle of seniority, as Reader pointed out, is consistent
with the American sense of fairness, ie, the first come, first served.
But in pro-union days, much was done through the foreman's personal
favoritism without centralized policy, and so infra-firm wage structure was
often in a chaotic condition. Confronted with union demand, the manage-
ment in the 1930's tried to systematize its practice. Personnel departments
were expanded and job analysis and evaluation plans were executed and so
on. By these efforts the present personnel management system was to be
established.
CULTURAL VALUES AND
THE LOGIC OFNDINDUSTRIALIZATION
Johannes Hirschmier
Nanzan University
It has by now become accepted theory that success or failure as well
as the particular course of the industrialization process is strongly
influenced by cultural values. But often enough the problem is simplified
by stressing the need to replace "traditional" (native) values, with
"rational" (Western) ones, implying that only the Western type mentality
is capable of becoming the carrier of the industrialization process. I take
the position that within the constraints of economic and technical condi-
tions, very different value patterns which are "traditional" to that country,
can become successful bases for industrialization and modernization. This
means of course that the same technological conditions can and do permit
different economic behavior patterns. I establish this point by comparing
both the values and the behavior patterns of Japan and the west in the
pre-industrial and the industrial stage.
As basic cultural values I take for the West the well-known Primacy of
Reason and Supremacy of the Individual over the group. For Japan I
take very opposite, the Primacy of Harmony and the Supremacy of the
Group over the individual. I indicate how these divergent cultural values
could develop and how they manifest themselves. The impact of these
principles upon economic behavior prior to and during the seccessful
industrialization periods is shown in some detail, using rather well-known
material from economic and management history. Specifically, three aspects of economic behavior are studied, each of them logically necessary for
industrialization: (a) The process of innovation and destruction; (b) the
process of competition; (c) the goal-setting. I try to show that in each
of these three aspects of economic change, there was a marked difference
in approach between the West and Japan, and that this difference can
clearly be reduced to the prevalence of the respective cultural values.
While maintaining the strong persistence of traditional values during,
and their positive contribution for the success of the industrialization
process, I also agree that technology itself is constantly, albeit gradually,
reshaping those values in both the West and Japan, and that the two are
moving gradually closer together
LAYOFF SYSTEM IN THE AMERICAN AGRICULTURAL
MACHINERY INDUSTY: A CASE OF
THE MCCORMICK WORKS
Kesaji Kobayashi
Ryukoku University
The pay roll books of theMcCormick works in Chicago show us the
fact that, through the later part of the nineteenth century, the production
of the reaping machine has been done with a kind of seasonal rhythm
reached the peak in June. The peak was then followed by the sharp
decline in employment which was practiced through a layoff, especilly,
of the unskilled workers.
Although this came from the historical fact that the reaper production
was linked with the harvest season of the crops such as winter wheat, a
layoff was, eventually, institutionalized in the industry.
This paper intends to throw some lights on the labor management and
examine the entrepreneurial significance of the layoff system on the growth
of the enterprise.
AMERICAN BUSINESS FINANCE
IN THE EARLY TWENTIETH CENTURY
Hisashi Masaki
Doshisha University
R. L. Nelson and S. R. Reid pointed out that the first wave of the
major merger movementes in the United States occurred at the turn oi
the century. This first wave, so-called "Trust Movement", resulted in a
high degree of concentration and corporationism in many industries, and
through the movement, business finance in Amirica became gradually
systematized.
W. H. Lough was a pioneer in the field of business finace at that time
and made a great contribution to its systematization. Lough's theory;
which was developed in his two books. Corporation Finance (1909) and
Business Finance (1917), dealt, first, with the raising of initial capita)
needed for business enterprise, together with its proper apportionment
for plant, equipment, and working capital ; second, with the accurate determ]
nation of profits and reserves, and the enlargement of capital perman-
ently invested.
A matter of primary concern for me was how his essential assertions
mentioned above was developed in the changing economic conditions of
those days. After summarizing Lough's theory, I examined the effective-
ness of his method by some case studies.