This is from the Economict article : Keeping it in the family.
http://www.economist.com/news/asia/21567419-family-firms-adopt-unusual-approach-remain-competitive-keeping-it-family
I didn’t know this fact. That’s why I believe that reading the Economist is important for me. I thought the adoption in Japan is rare. But this article says the adoption is common in Japan. Why? The family firms adopt to remain company. But is adoption good for running companies?
ANDREW CARNEGIE, a 19th-century tycoon, famously said that inherited wealth “deadens talents and energies”—
For me, this is understandable, usually family control company is not good.As the proverb in Japan says, 1st generation owner establish the company, works hard to stabilize the company. When 2nd generation owner inherit the company, he works well because he knows the hardship 1st genaration owner goes through. But 3rd generation owner doesn’t know their hardship and tends to bring his an idealized theory into the company, and crushes the company.
But, only Japanese seems to be opposite to ANDREW CARNEGIE believed.
A forthcoming paper* in the Journal of Financial Economics finds not only that inherited family control is still common in Japanese business, but that family firms are “puzzlingly competitive”, outperforming otherwise similar professionally managed companies.
- So. inherited family control is common in Japan.
- And puzzlingly competitive.
Japan boasts some of the world’s oldest family-run businesses, and many family firms—Suzuki, Matsui Securities, Suntory—break the rule of steady dynastic decline. So how do Japanese firms do it? The answer, says the paper, is adoption.
- Running the company, they use the adoption.
Last year more than 81,000 people were adopted in Japan, one of the highest rates in the world. But, amazingly, over 90% of those adopted were adults. The practice of adopting men in their 20s and 30s is used to rescue biologically ill-fated families and ensure a business heir, says Vikas Mehrotra, of the University of Alberta.
This number is totally new to me, is much bigger than I expected.
Frustratingly, the paper’s research stops in 2000. Mariko Fujiwara, a sociologist, says more Japanese parents are now willing to accept the end of the family line. But she adds that Japanese marriages will always have cultural and legal implications because the future of so many businesses depends on who takes them over.
Now I know a lot of companies are looking for their successor. They are relatively small, and now have a difficulty to find their successor. These company usually has high technology in certain sectors. But the problems are decreasing workers population, in the number of children, job mismatching with young people. We Japanese are going to loose diversity. We need to study and help important companies.