The A to Z of Japanese Business by Stuart D. B. Picken

Author:Stuart D. B. Picken
Language: eng
Format: epub
Publisher: Scarecrow Press
Published: 2007-03-14T16:00:00+00:00

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MACHINE TOOL INDUSTRY. Among Japan’s 2,000 small and medium-sized enterprises (chu-sho kigyo), the machine tool industry ranks fourth in the world production of machine tools behind the United States, the former Soviet Union, and Germany.

MADOGUCHI SHIDO. Literally meaning “window guidance,” it was a device used by the Bank of Japan (Nippon Ginko) to impose controls on the banking system during the postwar period until the burst of the bubble economy. The Bank of Japan indicated what it considered appropriate levels of lending, thereby controlling the nation’s monetary base. Although the Ministry of Finance exerted some influence on the Bank of Japan on fixing the discount rate, the bank was relatively free in its ability to “guide” banks. Japanese industry was and is heavily dependent on bank finance because the capital markets in Japan do not function as they do in the Western world. The system came to an end in 1991 and was replaced by controlling credit flow through manipulating interest rates.

MARUBENI CORPORATION. A major trading house (sogo shosha) that traces its roots to a company founded in 1858 by Ito Chubei to sell hemp to outlying areas. In 1872, he opened a dry-goods store in Osaka called Benichu, using Beni as the business logo. By the early 20th century, Benichu had expanded into Kobe and Kyoto. In 1914, the company was reorganized into C. Itoh & Co., which was further divided in 1918 into Itochu Shoten, consisting of the Osaka and Kyoto stores and C. Itoh & Co., having the Kobe store as its main business. The post–World War I business decline weakened the commodity markets, in turn creating the need to consolidate.

In 1921, Itochu Shoten merged with Ito-chubei Shoten, taking the name Marubeni Shoten. From its single office in Kyoto, it expanded in 1931 to Osaka and began the transformation to a trading house. Branches were opened in India and China. As the business expanded, the desire grew to reunite the various branches of the Ito family business. In September 1941, three companies—Kishimoto Shoten (a steel trader), Marubeni Shoten, and C. Itoh & Co.—merged to form Sanko Kabushiki Kaisha. Although Japan’s involvement in World War II limited the company’s business, it still traded in China and in Southwest Asia. Sanko KK merged in 1944 with Daido Trading and Kureha Cotton Spinning (also founded in Ito Chubei) to create Daiken Industries. By 1945, the group comprised 103 companies in Japan and was internationally involved in a range of businesses, including shipping, textiles, heavy industry and chemical products, grains, fertilizers, and various kinds of military procurement.

When the Supreme Commander Allied Powers (SCAP) implemented its policy of breaking up the prewar zaibatsu, Daiken was broken into Marubeni, C. Itoh & Co., Kureha Cotton Spinning, and Amagasaki Nail Works. Marubeni was established in 1949, and by 1951 it had opened an office in New York. By 1954, it had expanded to 22 overseas offices. In keeping with the government policy of trade expansion, Marubeni was partnered with another trading company, Iida & Co.

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