Forum holds up Omi feudal merchants as models of corporate responsibility

by Kenzo Moriguchi

OMI-HACHIMAN, Shiga Pref. — The 20th century socioeconomic system saw most people consumed with the pursuit of profit. Today’s businesspeople, however, must re-examine their raison d’etre as the idea of corporate responsibility takes hold.

Visitors view artifacts in the home of Kobayashi Ginemon, a major Omi merchant who ran a textile business in 1798. The structure, in Koto, Shiga Prefectrue, is now a museum.

That was the main theme last week at International Akindo (Merchants) Forum 2001, a forum that drew more than 500 businesspeople.

Unlike business conferences where participants try to learn about running e-commerce or Web-based sites, this forum focused on the spirit of the famed Omi “shonin,” merchants from the Omi feudal domain that is now Shiga Prefecture. Akindo is another word for shonin.

Omi merchants “were the roots of modern Japan’s business and industry,” said Kunitoshi Suenaga, a professor of Japanese economic history at Doshisha University. “They operated their businesses the way modern business is run.”

Though often considered just a legacy of premodern Japan, mainly the Edo Period (1603-1867), Omi merchants were well aware of their social responsibility just as firms today feel they must play a part in aiding the environment and society, he said.

Omi merchants were active in the mid- to late Edo Period, but their ancestors had begun business as early as in the Kamakura Period in the 13th century, Suenaga said.

First, as a group of some 100 villagers, they drummed their wares nationwide, including tatami rushes, mosquito nets, medicines and textiles from Omi. In return, they brought back local specialties to Omi and neighboring Kyoto, he said.

They gradually consigned goods to local shops and then opened their own. In the late-Edo heyday, some firms had as many as 15 branches across the country.

A distinctive feature of Omi merchants was that they operated their businesses outside Omi, traveling as far as the regions currently known as Hokkaido and Kagoshima prefectures. Suenaga believes this led to the Omi merchants’ famous creed of “sanpo-yoshi,” which means three-way satisfaction.

“Sanpo-yoshi meant a business should satisfy society in general as well as the seller and the buyer. Because Omi merchants did their business at foreign places, using only Omi employees, they were careful to be accepted by locals,” he said.

One of the rules they followed over the generations had it that an ultimate goal of business was to regret having sold goods at a low price. While they could have made more money from a transaction, their counterparts, who were often retailers, could earn some profits because of the low price. This led to long-lasting business relationships, according to Suenaga.

Omi merchants’ effort to establish good relationships with locals was exemplified by their charity activities, including donations to local shrines, and payment of annual land taxes for residents unable to pay their dues, Suenaga said.

Merchants at that time knew they owed their business success to their communities, but quite a few firms in modern Japan have lost that perspective, Suenaga said.

Citing the recall coverup by Mitsubishi Motors Corp. and the massive food-poisoning outbreak caused by Snow Brand Products Co. last year, he said, “If these companies had been thoughtful about consumers, such antisocial incidents would not have occurred.”

Another lesson to be learned from the merchants is the internal discipline of management, Suenaga said. Major Omi merchants had an explicit rule that an errant house master could be replaced by a relative or an elder employee.

This discipline shows that Omi merchants saw their business not as a private asset but as a public entity. The explicit rule alone was more effective than what the board of directors could do at Sogo Co., he said, indicating the department store chain’s bankruptcy was caused by an incompetent leader who overstayed his appointment.

“The spirits of Omi merchants were not special, but universal,” Suenaga said. “But when it comes to applying them to actual business practice, it may not be as easy as it sounds.”