0901-1/1

BUSINESS ADMINISTRATION AND BUSINESS HISTORY

Shinzo Kurita

Kobe University of Commerce

Six articles in this issue are papers read at the common-topics session of the ninth annual meeting of the Business History Society of Japan held at Kobe University of Commerce on November 10 and 11, 1973.

In the opening address, Kurita pointed out that the aim of this symposium lay in analysing the interrelationship between “Business administration and Business History.”. There are three approaches in studying business history: history of the business thought; history of the business structures; history of the business management. Kurita emphasized the possibility of multiple approaches, suggesting five genres of the history of business management – labour management; financial management; production management; marketing management; and accounting management.

The second speaker, Professor Seiji Fujitsu (Hitotsubashi University), explained, to the minutest detail, the development of the standard profit concept at Onoda Cement Manufacturing Company, which was one of the pioneering modern enterprises in Meiji-Japan. He pointed out that Onoda Cement Manufacturing Company was the earliest enterprise tackling with the problem of depreciation-expanse. (Commentator; Professor Jiro Ono, Kobe University).

Professor Hiroshi Noguchi (Keio University) tried to trace the historical characteristics of the labour management in Japan. He concretely reported about “the Japan-Type-Labour-Management”, which had a couple of unique marks—the system of employment for life; the institution of generous welfare; and the special personnel relationship based on the business community. (Commentator: Professor Hiroshi Hazama, Tokyo University of Education).

Professor Hiroshi Tachibana (Osaka Municipal University) insisted the importance of the historical approach in the study of production control, reviewing the development of capitalistic-factory-production during the recent two centuries, together with the contemporary thoughts and systems of production control. He also analyzed the current structure and function of the production control in detail, from the historical view point. (Commentator: Professor Kisoo Tasugi, Kyoto Gakuen University).

Professor Koichi Shimokawa (Hosei University) reported on the origin and growth of the marketing control in the United States during the latter half of the 19th century. He found the origin of the marketing as a means of control in the early development of salesmen control, promoted in some new consumers' goods industries such as sewing-machine, reaper, meat-packing and cigarette, to which neither established marketing organization nor sales agency could afford enough sales facilities. (Commentator: Professor Moriaki Tsuchiya, Tokyo University).

Professor Eiichiro Ogura (Shiga University) gave the audience a Corroborative business-history-research of the accounting management. Analyzing the cases of House of Nakai and Muranishi together with Izumo-account, he put emphasis on the existences of the managerial-accounting and the cost-accounting in Tokugawa-Japan. (Commentator: Professor Osao Kojima, Kwansei Gakuin University).

Co-chairmen of this symposium were Professor Yasuzo Horie (Kyoto Sangyo University) and Professor-Keiichiro Nakagawa (Tokyo University).

0902-1/2

THE MERCHANT OF WUPPERTAL

Hisashi Watanabe

Wuppertal, a prosperous centre of the textile industry of Rheineland, has made a great contribution to promote the industrialisation in the 18/19th centuries. It was distinguished throughout the period by a variety of its Products. As concerns the raw material for its one of main branches, weaving, says statistics, cotton was replaced by silk at the latest by the 1830s and silk- and halfsilk goods were the chief products of this sector.

The Yearbook of the Chamber of Commerce Elberfeld-Barmen gives however another data that the most consumed material was still cotton. It is therefore to be examined from what kinds of yarn the so-called "halfsilk cloth" was woven. We use for this purpose "Offizielles Adress-Buch fur Reinland=Westphalen zum Vortheil armer Kranken" which was edited in 1833 by Oberbfirgermeister of Elbefield, Riittger Brfining.

As a result of analysis of the occupation-descriptions of the thick residents list it turned out that "halfsilk manufactures": linked up frequently with cotton manufactures' and so that cotton remained well quantitative more important material than silk for the Wuppertal's weaving manufacture. It may be now considered that "silk and Half-silk industry" was, in fact, nothing. else than cotton industry.

Wuppertal's cotton industry had been introduced into the valley owing to commercial activities of the manufacturers, mainly of Elberfeid. Not only cotton industry and the other industries but also the service sector owe their formation to the initiative of Wuppertal's Fabrikanten which expressed Characteristically the German entrepreneurship in that period.

0902-2/2

MANAGEMENT AND POLLUTION OF A NINETEENTH' CENTURY CHEMICAL FIRM IN BRITAIN: PRIVATE ENTERPRISE AND LOCAL COMMUNITY*

Yuuichi Kudou

Private enterprise in Great Britain has caused problems of industrial pollution in local communities since the Industrial Revolution. For instance, the Leblanc soda industry established in the context of the Revolution, was one of the most notorious pollution-producing industries, because in its early days it allowed 'itself to escape "muriatic acid gases" (HC1), destroying property, comfort, and health of the local inhabitants and deteriorating their 'quality of life'. James Muspratt, who became the founder of the soda industry in Lancashire in 1823, was confronted with the problems of atmospheric pollution by HC1 and the antipollution movements of the inhabitants around his works in Liverpool, St. Helens, and Newton, as his forerunners and his followers were. None of them took any means to prevent the gases from escaping into the atmosphere, while the French inventor of the Soda process tried to do so by building a large ceramic container and a large lead chamber from the beginning of his operations. It was owing to considerable burdens of the prevention costs that they did not do so.

The object of the present author is to elucidate what process the entrepreneur Muspratt applied to soda making, how he and his sons managed their chemical firm, what damages he did to his neighbours, how much he compensated for the damages, what means he took to prevent them, and whether they were effective for the purpose or not.

In sum, the Muspratts were forced to close their works, remove them, and pay the compensations, and to adopt various means of abating the HCI nuisances. Thus they changed their business policy from externalisation of ‘social losses’ and the prevention costs in their early days of operations through mere internalisation of them to higher internalisation of them in the mid-nineteenth century. It seems that they tried to improve the inhabitants’ ‘quality of life’ through pollution abatement and so perform ‘social responsibility of private enterprise for local community’ as possible as they could.

They, however, had to deal still with the problems of soil, water, and air pollution by “alkali waste” which became nationally serious in the 1870s.

* I would to thank Mr. John Smith of Liverpool Public Libraries, for his help in acquiring the materials used here.

0903-1/2

MANAGEMENT OF THE TRUST COMPANIES IN JAPAN BEFORE WORLD WAR II

Shoichi Asajima

This paper describes the development of Trust Companies in Japan, focusing on the characteristics of their capital, executive staffs and management philosophy.

Trust companies were incorporated under the Trust Business Act of 1923. Most of those trust companies were established and capitalized by a Zaibatsu, a large bank or major provincial banks, and were managed by the executives sent from the mother bank, following the example of their mother. The fact that the trust companies had the function of taking charge of trusters’ property, however, gave characteristic feature to their management philosophy.

The trust companies grew up as one of the long term financial institutions, comparable to banks and life insurance companies.

0903-2/2

MARKETING STRATEGY FOR THE GROWTH OF AMERICAN ENTERPRISES

Nobuo Kawabe

It is said that in the United States the modern big-business came into being and continued to grow through the addition, combination, and integration of specialized functions and units. Especially, in 1880-1900 the urban and national markets grew as the result of the rapid development of railways. And it became the main goal of many enterprises to actualize mass sales to these large markets. In order to attain this goal, rational and efficient marketing system were necessary.

There appear the following problems concerning the marketing functions held by manufacturers and retailers: (1) why and how manufacturers and retailers integrated marketing functions, (2) what role has the integration of marketing functions played, (3) why existing middle-men could not keep their position, (4) what kinds of struggles have appeared among retailers, manufacturers and middlemen. The objective of the author is to investigate these problems from the viewpoint of marketing strategy and corporate growth of the companies which deal in consumer goods.

In the last half of the 19th century, some of the manufacturers began to integrate marketing functions aggressively because of the inadequacy of existing wholesaler network for their products. They were of two types. Firstly, there were the producers of relatively complex durable goods like sewing machines. Secondly there were the producers of perishable goods such as meat packers. Moreover, as the dense market grew, manufacturers of products like oil and rubber who had no difficulties in their marketing, found it convenient and efficient to integrate some of the marketing functions.

There also appeared modern mass retailers such as department stores, mail order houses, and chain stores. These mass retailers developed through the addition of product lines and stores. Besides, one of the common strategies of them was mass sales with low prices, and they integrated backward or wholesale functions.

On the contrary, there were some industries in which middlemen continued to play important roles till the beginning of the 20th century, because of the nature of the commodities and the competitive conditions. Among these, there were manufacturers of groceries, drugs, hardware, etc. Even in these industries, however, after mass retailers began to become national chains and to buy directly from manufacturers, and advertising by Producers developed, the power of the middlemen was correspondingly weakened. At the same time, mass retailers began to show their countervailing power against large manufacturers by rationalizing their activities through the integration of the marketing functions. Thus, by the end of the 1910’s the old marketing systems disappeared and new ones have been formed.