BINDING EMOTIONS FOR LONG-TERM CONTINUITY OF FAMILY BUSINESS? THE FOUNDATION OF FAMILY RULE AND MITSUI’S BUSINESS IN LATE 19TH AND EARLY 20TH CENTURY JAPAN

Abstract

This paper investigates how Japanese family business transformed their traditional family
ownership during a period of radical changes in business and economic conditions. Particular
attention will be focused on the case of the Mitsui families who established one of the most
influential business conglomerates (zaibatsu) in modern Japan. During the late 19th century,
the families were confronted with significant and unavoidable business challenges that led
them to reform, reorganize and redevelop their business. These reforms included reshaping
the family ownership system that was characterized by the combination of traditional business
and household systems in which family members share their business assets. It was adapted
to fit into modern corporate and legal systems. In addition, as a result of the success of their
business transformation, the case of Mitsui families was considered as a model for many
Japanese mercantile families who shared the same characteristics in the context of family
ownership. These families subsequently utilized this model for continuity and to ensure the
survival of their family business. For this reason, it can be argued that the Mitsui case demonstrates some of the survival strategies of Japanese family business in a period when Japan
was confronted with internal and external pressures for business internationalization.
Although previous research in Japanese and English has analyzed Mitsui’s business and
reforms during this period, this paper adds new perspectives by reconsidering the household
reforms of Mitsui families that were linked to the reorganization of their business. The details
and process of the reform were examined in sources and documents related to household
reforms kept at the Mitsui Archive (Mitsui Bunko). Specific attention is focused on the process
by which the family and business organizations were reconstructed in complete and complex
processes to regulate the family’s habits and emotions. These were symbolized through the
foundation of a set of family rules, Mitsui Kaken, to assure the long-term continuity of the
business under these new circumstances.