Business Management

Publication List of this Subject

In the modernization process that began with the Meiji Restoration (1868), one of the important tasks that the government had to undertake was the formulation of the civil code and the commercial code both of which were modeled on Western legislation. Western-style company law was introduced in the 1890s.

Nevertheless, the modern legal system was not readily accepted by the general public. Pre-modern management rules and indigenous commercial customs were still deeply rooted in Japanese society and people devised various ways of circumventing the new laws.

For instance, the large-scale family businesses known as “zaibatsu” stuck to their traditions and tried to retain capital within the family circle by assuming the collective (or joint) ownership of capital among the family members, although their explicit legal description, as entities registered under the modern legal system, was a limited partnership or an unlimited partnership.

Another example of circumvention can be found among small and medium-sized companies. The Meiji government abolished guild-like associations of various indigenous industries that had been established in the pre-modern Edo period, believing that they hindered freedom of business. However, smaller companies, recognizing the usefulness of guild-like associations, began to collectively set up such associations by profession or on a regional basis. These associations flourished throughout Japan until the government put into practice various measures to weaken them.