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Geodemographics and Urban Planning Analysis: An Historical Review Read chapter Read first chapter

2022 | OriginalPaper | Chapter

6. On the Existence and Sustainability of Long-Standing Japanese Shinise Firms

Author : Hidekazu Sone

Published in: Theory and History in Regional Perspective

Publisher: Springer Nature Singapore

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Abstract

The purpose of this study is to explore the interdependent relationships between regional economies and long-standing firms in Japan. Research on family businesses is scarce, so this study analyses the actions of successive generations of family run businesses, interweaving their knowledge of management strategy, society, and history. In this study, we provide a field study on Suzuyo & Co., Ltd., a major logistics company rooted in Shizuoka City, Shizuoka Prefecture (Shimizu area) which has been operating for nine generations over the last 200 years. We discuss this case from the perspectives of innovation, business system, and socio-emotional wealth (SEW). Suzuyo’s business style is based on sound region-customer relationships and is the biggest contributing factor to their long existence. This study offers a strong contribution to the literature due to its research methods, which included interviews and historical materials provided by the people at Suzuyo. In particular, we were able to interview President and Chairman Yohei Suzuki, the eighth generation of the family within the company. His effort ensured that our analysis was fact-based, allowing us to clarify the factors behind the firm’s long-standing operation and the relationship of successive family generations with the local community.

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Footnotes
1
Currently, in addition to distribution and logistics, the firm has seven business lines with over 140 branches, which include sales of food, construction, information system, and fuel trading, among others. The enterprise produces an annual revenue of around JPY 460 billion. Furthermore, the firm had to face hard times such as failure in speculative trading in the U.S. market, World War II, and the oil shock. The firm overcame these crises by restructuring its internal organization in response to the changing environment while also exploring new ventures. For example, Suzuyo had committed to developing Shimizu Harbour, selling coal, and exporting green tea and oranges overseas.
 
2
Regarding business system studies in the field of business history, Cochran (1957), Cole (1964), and others used business systems as a dominant concept to scientifically discuss the major issues of economic developments based on case studies. Later, in business strategy theories, business management theories, etc., many researchers have been emphasizing business systems, particularly when discussing Japanese corporations. Kagono and Yamada (2019) defined a business systems as “a business framework being a cooperative systemized framework within a corporation and among corporations.”
 
3
SEW has been actively discussed by many researchers in the USA and Europe since around 2010. SEW has also attracted attention from Japanese researchers in recent years, but the interpretation of SEW appears exaggerated. Thus, we use early research on SEW in the USA and Europe as a main reference for this study.
 
4
Gomez-Mejia et al. (2007) investigated the attitudes of family business toward risks, that is, the facts that they are risk averse depending on their, nature which leads to the failure or reduction of SEW. Gomez-Mejia et al. (2011) distinguished family businesses from other types of businesses by emphasizing the role of uneconomic factors when referring to previous studies. In his 2011 research, he pointed out three distinct factors that the family business has inherited: a strong emotional overtone which the family has built up through its persistent memory and long existence as a social organization; the penetration of their family’s idiosyncratic sense of value into the organization; and altruistic behaviour among owners of the family business.
 
5
The literature review on business system and innovation is cited from the discussion in Ibrahim et al. (2011), Sone and Lam (2013), Lam and Sone (2018), and Sone et al. (2020) which is partly modified.
 
6
Culture here means “a complex whole which includes knowledge, belief, art, morals, law, custom, capabilities and habits.” Culture defines the members of a specific society (Tylor 1871). The culture of a regional society determines whether the society tolerates risk and changes, celebrates the success of others, collaborates and cooperates, and accepts failure as part of the normal process of doing business (Saxenian 1994; Stephan and Uhlaner 2010; Mason and Brown 2014; Spigel 2017).There are characteristics of a society that is conductive to a firm’s innovation.
 
7
The region’s history of commerce, therefore, provides an insight as to why certain areas maintain a persistent level of entrepreneurial activities over a long period of time (Shane 1993; Aoyama 2009; Fritsch and Storey 2014; Sone et al. 2020).
 
8
For this paper, primary materials were examined, while secondary materials and inhouse company documents were referred to. Interviews were conducted with Mr. Takafumi Mori, a former Suzuyo board member, and one other person on March 14, 2017, and with Mr. Daisuke Goto, an adviser to the company, and one other person on October 6, 2018. On July 1 and 28, 2020, Mr. Yohei Suzuki, the chairman and eighth-generation founder, was interviewed. At least ten rounds of investigation were conducted, including informal inquiries. We used a longitudinal case research method (Gerring 2007; Stake 1995) where we started with the company’s founder and continued to the present leader of the ninth generation.
 
9
It had been previously said that developing railways would have a negative effect on marine transportation, but it actually had a positive influence.
 
10
Mr. Yohei Suzuki, the leader of the eighth generation, said, “Since Kushiro and Shimizu are not big harbour but rather medium-sized, no major companies came in. As a result, there were business opportunities for Suzuyo. Harbour of Shimizu, unlike Kushiro, had liners visit regularly, and therefore, they were able to export tea and tangerines from Meiji Period. Exports were usually operated by a large shipping company, but in the case of Shimizu, the business was entrusted to a local company. Running such a business required the workers to be able to speak English, and for this reason, they needed relatively high-calibre workers to do the job of the distributors. The quality of employees was quite high at Suzuyo because such personnel were combined with the work at the harbour.”
 
11
Opening teahouses at Yokohama was crucial for the community because exporting tea was mainly conducted at Yokohama port at that time.
 
12
The fourth generation’s leader played a leading role in the marine transportation industry at that time. He helped build up a wharf company, Hakuunsha Co., Ltd., which accelerated the harbour development.
 
13
Mr. Yohei Suzuki, eighth generation leader, wrote, “The business is all about its people” is a commonly known proverb, similarly our company history is also exactly “the history of the people of Suzuyo” (Suzuyo & Co., Ltd. 1987).
 
14
Subjects taught were accounting, business administration, communications, classical Chinese, Japanese, and English.
 
15
The sixth Yohei Suzuki modeled the company like a terakoya school. He provided education, such as lessons on bookkeeping, reading and writing, and abacus, to his employees. The local community acknowledged this endeavor; thus, Suzuyo was able to recruit talented students from local higher elementary schools, because it was understood that employees would be able to study if they joined the company. These talented students contributed to Suzuyo’s growth during the pre-war period. The management, led by the head clerk, laid the company’s strong foundation.
 
16
In addition to the position as the president of Suzuyo Shoten, he took over the position of president at partner companies and was a member on their boards. Mr. Yohei Suzuki, eighth generation leader, wrote, “The eighth generation describes his father, the seventh generation, as ‘a quiet man’” (Suzuyo & Co., Ltd. 1996).
 
17
Mr. Yohei Suzuki, eighth generation leader, wrote, “As the head of the company, my father must have been doing whatever he could to get through the turbulent times of the Pacific War, Japan’s defeat in the war, and the post-war period. When I think of my father, a lump forms in my throat, as I think of a man who did not seem to have been blessed with talent as an entrepreneur but worked hard as he could” (Suzuyo & Co., Ltd. 1996).
 
18
The annual sales value of the Transport Division increased from JPY 1.3 billion in 1961 to JPY 2.9 billion in 1965, then to JPY 2.9 billion in 1969.
 
19
Mr. Yohei Suzuki, the leader of the seventh generation, wrote, “History (of Suzuyo) is directly linked to the development of Shimizu Port. Suzuyo, who has lived together with Shimizu Port, is grateful that it has grown with the prosperity of the port, and this is our basic spirit. … Suzuyo’s mission to be born in the hometown and live with the hometown is becoming more and more important, and we are keenly aware that we must have the responsibility and awareness to always return the benefits we have been given, both mentally and physically”(Company magazine, Suzuyo, Vol.1).
 
20
Mr. Yohei Suzuki, the leader of the eighth generation, said, “My father (the seventh generation) was not really the one who took the lead, but rather was supported by my uncle (the younger brother of the seventh generation). I also think the support from university graduate shopkeepers who joined the company when my grandfather was the head was big. They really supported my father.”
 
21
The eighth Yohei Suzuki moved the company away from its local orientation (Sone and Yoshimura 2019).
 
22
Mr. Yohei Suzuki, the leader of the eighth generation, said, “This is how salaried workers live, this is how they work, the bosses are like this, they learn their work this way, and this is the kind of lifestyle they go through. Every single realization should teach us something. Even at my company we tell our workers to cherish their co-workers. Workers of shipping companies are nice to each other, and they’re good friends. I want that kind of culture to be present in our company as well.”
 
23
Mr.Takafumi Mori said, “I am immensely grateful that you are so enthusiastic about Suzuyo. Though it has been 10 years since I retired, I still feel glad that I worked for this company.”
 
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Metadata
Title
On the Existence and Sustainability of Long-Standing Japanese Shinise Firms
Author
Hidekazu Sone
Copyright Year
2022
Publisher
Springer Nature Singapore
Book
Theory and History in Regional Perspective

Print ISBN: 978-981-16-6694-0

Electronic ISBN: 978-981-16-6695-7

Copyright Year: 2022

DOI
https://doi.org/10.1007/978-981-16-6695-7_6