Doubtlessly, the example of Kongo-gumi is outstanding, but there are another 33,000 entities operating since at least 100 years ago (Teikoku Data Bank, 2019). In contrast, the US, which ranks 2nd globally for age-old companies, has just 19,497. Such a long-standing entities are called in Japanese “Shinise,” literally meaning “old shops” and they are deeply respected due to their cultural heritage. Yoshinori Hara, dean and professor at Kyoto University’s Graduate School of Management says “Many of these long-standing companies are family owned, medium to small-sized. Usually they are Sake breweries, art-crafts workshops, manufacturers, construction, or food-related shops. Similarly, there is also a trend where companies involved with Japanese culture, history and life-customs can sustain their business longer.”

Surprisingly, long-standing companies are not exclusively limited to small family-owned organizations. For example, Nintendo, globally acclaimed for creating Super Mario games and Switch, originated around 1889 in Kyoto as maker and seller of Hanafuda, a traditional card game. Although shinise are highly diverse in nature, they all share one aspect: as Hara states “many of these historical entities have created bonds among stakeholders such as local residents, family members and business partners.”

Hara continues, “there is a Japanese word “Mikata Yoshi,” which can be translated as “three-way satisfaction: seller, customers, and society. That philosophy is particularly rooted in these long-lasting Japanese companies. The fact that companies are sustainable and well-accepted by society is the reason we find shinise in Japan.” Additionally, he explains the country’s historical businesses tend to seek something more subtle: “These firms have prioritized to sustain their companies for the next generation rather than seeking immediate benefits.”

Purpose economy

However, continuing business in Japan for many generations is not easy at all, as the country has had many severe experiences in its 2000 years of history, including natural disasters like earthquakes, economic crises, and war. How can these companies counter these hazards? “Again, the potential reason is a strong synergy among stakeholders. For example, Rokkaku-do, a temple in Kyoto, faced many fires and burned down 18 times, but the locals have collaborated to rebuild the temple each time.

Common philosophy (purpose economy or meaningful existence in society) and altruistic mindset are also important aspects.” Consequently, how can businesses be well-prepared to withstand the unprecedented crises in modern times? Hara replies “Companies can stand against crises with multi-stakeholder management. In addition to this, in the digital transformation era, Decentralized Autonomous Organization and networking among these communities will be an important aspect.”