1101-1/1

JAPANESE BUSINESS ON ASIA BEFORE WORLD WAR II

All of the six articles in this issue are papers read at the commom-topic session on the second day of the eleventh annual meeting of the Business History Society of Japan, held at the Konan University on October 9 and 10, 1975.

In the opening address, Prof. T. Inoue of the Kobe University reviewed the increasingly growing interest among the business and economic historians of the world in the history of direct foreign investment and then pointed out the main problems to be explored in the study of the development of Japanese business abroad before World War II.

Professors K. Takahashi of the Kobe University and Lin of the Nagoya Gakuin University traced the general development of Japanese and Western direct investments in the Asiatic Continent. They would give the attendants a sense of when and where early Japanese businesses went int9 direct investments in the Continent where U.S. and European businessmen had already established their stakes.

Professors M. Udagawa, An, and Y. Mishima recounted respectively the individual histories of direct foreign investment by the Nihon Industry Company, the Oriental Development Company, and the northern-sea fishery companies.

Prof. Udagawa of the Hosei University examined the process of direct investment in Manchuria by the Nihon Industry Co., the holding company of the newly-risen Nissan Combine. His explanation should be suggestive in understanding Why, how, and in what conditions the business enterprise decided to go into direct foreign investment.

Prof. An dealt with the direct investment in the Korean agriculture by the Oriental Development Co. By contrasting the economic rationalism of the Japanese company with the traditional ethics supported by the teaching of Confucius among the local landowners, he pointed out the working of cultural factors which allowed the Japanese invasion of the Korean economy.

The last speaker, Prof. Mishima of the Konan University traced the course of the changes of labor management in Japanese fishing facilities in Siberia after the Russian Revolution. This should be useful in understanding of the problems Japanese companies met as they attempted to do business in foreign lands before World War II.

The panel discussion on the common topic was presided by Professors Y. Sakudo of the Osaka University and M. Fujii of the Nihon Univers!ty.

1102-1/3

HISTORICAL CHARACTERISTICS OF JAPANESE BUSINESS

--Especially on the Government-Business Relationship--

Mitsuo Fujii

Nippon University

Thirty years have passed since World War II and Japanese capitalism at present has had to make a dramatic shift from a rapid growth period to a stagnation period. During the rapid growth period big business invested heavily on equipment to meet demand. At the same time monopolistic industries ran wild and today, when Japan is facing its most serious depression large firms are under fire and are faced with a need to re-examine their social responsibility.

Which it may be said that the present crisis was brought about by the abnormal growth of big industry under the recent government and political guidance, on the other hand the causes can also be seen in the business activities since the Meiji Era. Some of the harmful practices continue to this day. The evidence of this can be seen in the recent Lockeed scandal in which individual influence peddlars spanning politics and business played a regretful part. This is a continuation from the Meiji Era. Also, the recent industrial pollution can be traced to business practices initiated in the Meiji Era and continued at present. Thus, big business at present is /acing a trial and faces a historical test for it present social evils which had roots in the Meiji Era.

I will therefore try to look into the government business ties in this article.

1102-2/3

A STUDY OF MORGAN FAMILY AND AMERICAN CAPITALISM

--with reference to the establishment of the House of Morgan--

Yoshio Ohba

Hokkai Gakuen University

This paper aims to explain the role of the House of Morgan in the development of American capitalism in the late nineteenth and twentieth century.

1. Problems discussed in this paper

2. The House of Morgan and the American capitalism

a. The Morgans and the industrial organization in New Eng-land

b. Historical background of the Morgans and their business activities

c. Junius Spencer Morgand and his raw cotton business

3. Summary and a proposal

1102-3/3

A HISTORICAL ANALYSIS OF MOVEMENTS OF CORPORATE SOCIAL RESPONSIBILITIES IN THE UNITED STATES OF AMERICA

--An Approach of the Open System Theory--

Makiko Yamada

Musashi University

In U. S. A., the big business organization is the most prominent and powerful institution. In fact, big business is so strong that every American feels its influence in everyday life. Also big business itself knows quite well its behavior is observed by public. Accordingly, it has become fashionable for many business leaders to advocate “the social responsibility of business”. However, there is no agreement on a definition or concept of Corporate social responsibilities. No one argues that management does not have a direct responsibility to stockholders, or that the corporation is not interested in profits. Debate arises over priorities of obligation to stockholders, workers, and consumers. Should a corporation concern itself with things such as racial problems, unemployment, city problems (slum or urban ugliness), pollution of water and air, cultural deserts, political life and so on ?

For example, Milton Freedman argues that the single task of managers is to employ the capital of their stockholders in the most profitable manner for the benefit of stockholders and not in the service of some public interest; his main point of view is based on the classical allocation theory that price and marginal cost will tend to be roughly equal, rewards to the factors of production will relate to their respective marginal contribution to production, and resources will be used in the most efficient manner. For him, retaining the competitive market system. insisting on the importance of the profit motive, and giving the generous rein to supply and demand mean greater production.

On the other hand, G. K. Galbraith points out that the assumption of classical price theory has lost most of its validity in mid-twentieth century since the modern American capitalist system depends on and revolves around the operations of a relatively few large corporations. That is to say, competition within the system of corporate concentrates produces results quite different from the balanced economy expounded by Adam Smith.

However, if we look at historical movements of corporate social responsibilities in U.S.A., we will realize that there has been a great diversity of reactions from business toward them. Eventually, we recognize that any of these arguments on the above discusses only about one aspect of the corporate social responsibility and gives us no definite answer. But if we consider the corporate organization as an open system and also the society as a total open system including a production subsystem, political subsystem, and so on, we will possibly get better explanations on the debate and why American corporations have been extending their range of social responsibilities in a historical process of the growth of the American industry.

In this paper, I will discuss why using the open system theory approach can be useful for analysing historical movements of the corporate social responsibility and show an applicability of the theory by analysing three cases in each different phase of the American business history.

1003-1/2

THE CHARACTERISTICS OF THE BUSINESS CREEDS IN THE EMERGING PERIOD OF AMERICAN CAPITALISM

--from Hunt’s “Merchants’ Magazine” (1839-1864)--

Junjiro Amakawa

Kwansei Gakuin University

The ‘economic ethics’ or ‘business creeds’ as evinced in Hunt’s “Merchants’ Magazine, and Commercial Review”, 51 vols. are so to speak the ‘secularized Puritan ethics’ themselves, considering from the fact that the editor and proprietor Freeman Hunt was called the ‘worthy successor to B. Franklin’ by I. G. Wyllie. The motives and causes of secularization of American Puritan ethics are these: the democratic influence derived from the French and American Revolutions, the humanizing influence from the Enlightenment, and the religious influences from the Greating Awakening and especially from the spirit of “Unitarianism”.

For instance, many of the writers of the magazine are the Unitarians, such as Edward Everett, Nathan Appleton, Amos Adams Lawrence, T.W. Higginson, G.W. Burnap, Orville Dewey, R.W. Emerson, Theodore Parker, W.E. Channing, James Martineau and B. Bussey. The businessmen whose biographies were inserted, such as Joseph Peabody, Amos and Abbott Lawrences, and the statesmen Who were referred to, such as Daniel Webster, are also all Unitarians. Though Transcendentalists like Emerson and Parker took the strong Anti-Mammonistic attitude.

In the magazine we also find the detailed explanation of the ideal images of American Businessmen and the ‘advantages, benefits and blessings’ which accompany their callings. Moreover, this national characteristics were emphasized from the geographical and social standpoints. For instance in vol. 24, Rev. H. W. Beecher, in his article ‘the Benefits and Evils of Commerce’, argued “the States of North America are to be the Commercial Center of the Globe”, because “both sides of the Globe are ours by our position, and ours is the land of two oceans”. This advantageous position of the U.S. may have given stimulus to the thinking of “Manifest Destiny” in the ‘Gilded Age’, though T.W. Higginson and G. S. Boutwell, both famous writers, are Anti-Imperialists. As regards to the social characteristics of America, in vol. 1, the once Secretary of State, E. Everett, in his article, ‘Accumulation, Property, Capital and that there were “no antagonism between Capital and Labor”, and also the famous Boston cotton manufacturer, Nathan Appleton in his article ‘Labor, its Relations, in Europe and the United states, compared’ (vol. 11) said that “Property or Capital is the accumulated labor of the past”. From these special viewpoints and national traits the American entrepreneurs had the secularized Puritan value systems and the spirit of enterprise and their expansive way of business management, and also their special attitude about labor relations.

1103-2/2

THE EARLY BUSINESS ORGANIZATION OF THE MITSUBISHIS

Yasuaki Nagasawa

Fukuyarna University

The main business of the Mitsubishis in their formative years was shipping business. By 1876 their shipping division had already established as one of the biggest organizations, with the number of employees exceeding 1700 and many branch offices covering the whole country. Thus the company keenly felt the necessity of keeping constant communication among them and issued documents to clarify the structure of authority and communication so as to establish a systematic organization within itself.

This is why the Mitsubishis laid down "Mitsubishi Kisen Kaisha Kisoku" (Regulations of the Mitsubishi Steamship Co.), which was intended to systematize the inside operations of the company. But, in addition, there was another reason. At that time the Meiji Government intended to protect the shipping companies in which a systematic and open-system management including the modern accounting and reporting practices was realized. The Mitsubishis needed to work out such an organization in order to put themselves under the Government's protection.

After all, the Mitsubishis succeeded in building up an explicitly definited centralized departmental organization. This article is intended to trace the creation and development of this type of administrative structure, which was significant not only in the development of the company but also in the more general growth of the modern enterprise in Japan.