[FOUNTAIN]The secret to corporate longevity

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[FOUNTAIN]The secret to corporate longevity

According to the “Guinness Book of World Records,” Faversham Oyster Fishery in England, established in 1189, is the world’s oldest company.
But Japan contests this. The Japanese claim that the Osaka-based construction company Kongo Gumi is the oldest. The firm was established in 578, during the Three Kingdoms era in Korea. It was founded by Geumgang Junggwang, whom Prince Shotoku brought from Baekje, one of the three kingdoms, to build the Buddhist Shitennoji Temple. The company is still thriving 1,425 years later, with annual revenue of nearly 10 billion yen ($92 million). Of course, it is nonsense to claim that the world’s oldest company was founded by a Korean. No document exists from the 6th century to prove the firm’s history. Aside from Kongo Gumi, many Japanese companies have a centuries-long heritage. Over 2,000 firms were founded before the Edo era (1603-1868) and are still operating.
What is the secret of their longevity? Three factors, the Nihon Keizai Shimbun reckons.
First, the companies do not insist on primogeniture when it comes to leadership. Founders of the long-lasting companies did not have an unconditional preference for their eldest sons. If the eldest son were competent, he would be the heir apparent, but if not, the founders were willing to take in a bright young man as a son. When the eldest son was not the best candidate, Kongo Gumi gave the leadership to younger sons.
Second, these companies avoided family fights by banning other family members from getting involved in management once the heir was selected.
Last but not least, the owners gave their successors a hard time. Instead of putting a naive young man in the top position, they obliged him to gain experience by starting at the bottom of the ladder or working for another company for years.
Business Week recently proposed requirements for being an heir to a founder. In order to inherit a company and manage it, the successor should have a strong sense of responsibility, ethics, experience in other fields, competence, a willingness to study and a good teacher.
Throughout the world, future leadership is important to companies. After all, a good company should outlast the sons and grandsons of its founder.

by Nahm Yoon-ho

The writer is a deputy city news editor of the JoongAng Ilbo.
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