2301-1/2

DISTRIBUTION OF ENGINEERS AND THEIR ROLES IN THE CHANGING BUSINESS, 1920

Hoshimi Uchida

Tokyo Keizai University

According to a statistical survey of graduate engineers from universities and technical colleges, the total number of engineers in Japan in 1920 was 1,400, 2.8 times as many as ten years earlier; of these 73% were employed in private industry. Employment in metal, electrical, chemical and engineering industries marked 5-13 times increases in ten years, indicating the rise of heavy and chemical industries during the First World War.

Seventy firms, of which 20 were founded between 1910 and 1920, employed more than 20 engineers, against 20 firms in total in 1910; and 11 firms employed more than 100. Increasing the number of engineers within a firm would naturally lead to the ordering of engineers by age.

Thirty-six large firms hired engineers in specific subjects who had graduated almost every year from 1905 until 1919, suggesting the origin of the “Japanese management” practice of employing freshmen each year and letting them climb up the ladder of positions.

More than 100 firms had several engineers in top management with the title “manager” or “chief engineer”; most of them had graduated during the 1890’s, although few of them had seats on the board with their capitalist employers.

Recently established steelmaking or shipbuilding companies had recruited veteran engineers through transfer from related Zaibatsu firms or through headhunting from public or private concerns.

For the first time in Japanese business history, several firms erected laboratories during the war. These firms were employing young physicists and chemists who had graduated from science faculties of the universities in addition to engineering faculty graduates.

2301-2/2

BRANCHES OF MITSUBISHI GOSHI (LIMITED PARTNERSHIP) DURING WORLD WAR I: ACTIVITIES AND RESULTS

Yasuaki Nagasawa

Fukuyama University

During World War I, Mitsubishi Goshi opened branches ill Europe and America for the company’s overseas activities. In this paper, I have analysed the motives, activities and the results of such development by focusing on the London Branch in England.

Before the war, the company had its foreign branches only in China, and most of the overseas activities had been conducted through foreign commercial houses. When the war occurred, the company felt it difficult to export to Europe, so the company switched its export trade from Europe to Russia via Vladivostok. But again, as Russia suspended gold standard, the company faced another difficulty to take foreign exchange risk. Since the company had to import goods such as machinery or raw materials, it was indispensable to promote export for acquiring a steady supply of foreign currency. In order to meet such needs, the company opened its branch office in London 1915 and New York the next year.

The London Branch sold the company-made non-ferrous metal such as copper or Chinese products, and purchased machineries and materials for the company’s shipyard. The accounts for these transactions were settled by the foreign exchange in the firm. The purchasing was soon exceeded by selling, so a trade surplus was accumulated in the branch office. With the purpose of making use of these surplus funds, the company went into the common exchange business. On the other hand, Japan was enjoying a war boom, and the Trading Division of Mitsubishi Goshi decided to add other company products to its own line; thus the company turned to a general trading enterprise. With corresponding to such a transformation, the company decided to enlarge the scope of overseas activities, resulting in the opening of agent offices in such cities as Paris, Seattle, Berlin, Rome, Lyon and Marseilles.

These activities of the foreign branches became a precondition for further growth of the foreign exchange business of the Bank Division as well as of the proper business of the Trading Division of Mitsubishi Goshi. Later the foreign exchange business of these branches was transferred to Foreign Exchange Division of Mitsubishi Bank, and their trading business was to Mitsubishi Shoji (Trading) Company.

2302-1/3

A CORPORATE DEFENSE

--Kawasaki Dockyard in 1939--

Takao Shiba

Kyoto Sangyo University

In l939, managers of Kawasaki Dockyard (Kawasaki) faced a crisis because a quarter of its shares were bought up by two shipping companies. Osaka Shosen (O.S.K.) and Yamashita Kisen (Yamashita). These two bought the shares from Jugo Bank who had been the largest shareholder of Kawasaki. O.S.K. bought the shares to control activities of the subsidiary company of Kawasaki in shipping. The subsidiary company, Kawasaki Kisen, had developed aggressive strategies in its attempt to expand the shares in New York route against O.S.K., the pioneer of the route. Kawasaki owned all shares and controlled decision making of Kawasaki Kisen. So, O.S.K. intended to influence the management policies of Kawasaki Kisen through the parent company. Yamashita cooperated with O.S.K.

Kawasaki, however, resisted strongly O.S.K. and Yamashita. For these were the shares that the managers had offered to buy in sensing the danger of transfer of the shares Jugo Bank owned to anyone who would intend to control it. O.S.K. and its cooperator, however, intruded themselves into the deal and obtained the shares by offering a higher price than Kawasaki. Denouncing the activity of the two shipping companies, managers of Kawasaki demanded that the two companies sell the shares to them. But O.S.K. and Yamashita refused their offer. As a result, managers of Kawasaki asked the military authorities and business leaders to intervene in this dispute.

While the military authorities attempted to pressure managers of O.S.K. and Yamashita into changing their attitudes, powerful business leaders intervened in this dispute. Under both pressures, managers of O.S.K. and Yamashita had to give up their plan to influence the company although managers of Kawasaki too couldn’t succeed in buying back the shares.

2302-2/3

STOCKHOLDERS AND STOCKHOLDERS’ MEETINGS IN THE MEIJI ERA

Yutaka Kataoka

Many of the modern companies in Japan have developed as joint stock companies.

In respect that those joint stock companies raised funds mainly by issuing stocks, the role of stockholders was important. And it is stockholders’ meetings that ensure the rights of those stockholders who invested in the companies. It is, however, debated that stockholders’ meetings in these days are nothing but are held as a matter of form.

The purpose of this paper is to survey the function of the stockholders’ meetings in the Meiji Era when the modern companies had just come into existence.

The object of my study in this paper is the stockholders’ meetings for the mergers of railroad companies. It is because the merger was, and of course is, one of the most important affairs for the companies, and also for the stockholders concerned. Moreover stocks of a railroad company had relatively wide distribution in those days.

In this paper mergers are divided into three kinds of cases. The first is the case where the estimated value of the company which was merged was lower than the stock price of the company. In the second the former was equal to the latter, and the third is of an opposite kind to the first.

2302-3/3

AN HISTORICAL STUDY OF THE HINO-TOYOTA TIE-UP

Hiromi Shioji

This article provides an historical analysis of the relations between the Toyota Motor Company and Hino Motors Limited, relations which formally began in 1966. Through such analysis, light can be shed on the general characteristics of tie-ups between vehicle manufacturers.

Three basic areas are covered. First, Hino’s failure in the small automobile sector is discussed. In the 1950’s Hino was a specialist manufacturer of large trucks and buses. In 1961, it tried to enter the small car sector but, faced with severe competition, made an ungraceful exit and was left with a large investment in small car assembly equipment.

Second, the tie-up with Toyota is examined. Through this tie-up, Hino was restored to its former position as a specialist in the large truck and bus field, and Toyota was able to utilize Hino as a subcontracting assembler of Toyota brand automobiles. This arrangement was good for both companies. Partly because of the benefits of specialization, Hino’s market share gradually rose and it eventually reached the top position in its sector. For its part, Toyota was able to increase production through the subcontracting arrangement.

Finally, the shift in the nature of the tie-up is considered. In the 1970’s, as Japan’s economy moved from high to low growth, the domestic demand for large trucks and buses began to stagnate and Hino suffered as a result. At the same time, needless to say, Toyota increased small car production through the expansion of both domestic and export markets.

In general, this episode points out some of the long-term factors involved in selection and bargaining between partners in vehicle manufacturing tie-ups.

2303-1/1

THE RIVALRY BETWEEN THE CARTEL OF JAPAN’S NEWSPRINT MANUFACTURERS AND THE IMPORTED NEWSPRINT BEFORE WORL DWAR II

Toshiyuki Shinomiya

Hirosaki University

In Japan, the newsprint manufacturers founded a cartel for the cooperative sales of newsprint in 1901 it intended to control the domestic market. But the newspaperdom succeeded to curtail the import duties on newsprint in l906, and sometimes was able to import cheaper foreign-made newsprint easily. Consequently, the cartel couldn't control the market satisfactorily.

Under those market structures, plenty of cheap newsprint began to be imported from Northern1 Europe and Canada after l930; it was regarded, especially about the Canadian newsprint, as dumping among the Japanese persons concerned in those days, and it induced industrial reorganization of Japan's paper manufacturing in l933.

But that commonly accepted understanding as dumping overlooked the in fluence of exchange fluctuation of those days. As the concluding remarks, after the Japan's lifting of the gold embargo in l930, yen revaluation served to reduce the yen basis imported prices. So the importation wasn't dumping. But after the final gold ban in l931, yen devaluation didn't raise prices, because several foreign manufacturers began to dump on the Japanese market. However the dumping was begun after the informa1 decision of the above-mentioned industrial reorganization.

2304-1/2

A HISTORICAL ANALYSIS OF TACTICS ADOPTED BY THE MITSUI HOUSE TO ENCOURAGE LONG-TERM EMPLOYMENT

Akiko Chimoto

Hannan University

The traditional years from the preindustrial Edo era in Japan to the Meiji era saw changes in employment relationship while not a few of the current practices can be traced back to the apprentice system of Edo merchant houses as we recognize prototypes of our long-term employment in their live-out system and branch family system applied to executive employees.

The apprenticeship system was essentially educational system whereby apprenticed children were disciplined until becoming full-fledged, independent merchants. Then, we have to ask why and how the merchant houses in the Edo era encouraged further long-term service from their fully qualified personnel long after their term of education. By the late Edo era, on the other hand, the word “apprentice” was often applied to petty servants and day laborers. What effect did this disintegration of the apprentice system have on the long-term service of highly skilled and potentially independent personnel? This article offers answers to these problems as it proceeds with the analysis of the sequential changes in the series of tactics the Mitsui House employed as it tried to secure long-term service of its high-ranking personnel.

The Mitsui House apparently deliberated on and did deploy a succession of flexible stratagems in the face of changes within the House as well as in society. When the House underwent aggrandizement in the Edo era, the utmost effort went into securing the stable service of able personnel.

Apprenticeship in any merchant house was a highly selective process and quite a few failed to fulfill their term of service and this competitiveness among the peers was quite a stimulus in the training of skilled personnel.

As a result of Meiji restoration, the practice of having personnel changed in such way that the role of employees became stratified and they received their salary in cash according to the newly-introduced graded salary system. This new system worked as a good incentive to secure long-term service because loyalty and ability promised successive promotions with steady raise in salary.

2304-2/2

FRENCH ORGANIZATION BUILDING IN HISTORICAL COMPARATIVE PERSPECTIVES, MID 19TH AND EARLY 20TH CENTURIES

Daijiro Fujimura

Hiroshima Shudo University

After reviewing administrative structures of multi-unit enterprises in the mid-nineteenth century France, I examined that of Schneider et Cie which had been defined by its 1913 organizational rules. Like most advanced structures of contemporary American firms, it had a central office comprised of heads of functional departments -- operating, financial, industrial accounting, personnel and legal departments. Into the first operating department, however, were integrated manufacturing, sales and engineering offices, and the line of authority between the major manufacturing and the other two units, and also between the operating and the other departments was defined on a line-and-staff basis. This contrast to the American integrated industrial enterprises can be explained by the similarity in the object of organization building, that is coordination of production and marketing activities, as well as the difference, lack of its own sales network in the French enterprise.

Another and more important difference is found out in behavior at organization building. In contrast to American organization builders, Schneider’s executives used data only for controlling activities, so not for evaluating the performance of managers, and their range of authority and responsibility remained obscure in consequence. This discovery of another way of organization building suggests that creation of the general officers which constitute a major innovation in developing the decentralized, divisional structure was a result of the American way of organization building, because strictness in the delegation of authority to the division managers is assured by clearness of individual responsibility confined by objective figures. The schema of strategy and structure of A. D. Chandler, Jr., therefore, should be reconsidered.