The Rise of the Japanese Specialist Manufacturer. Leading Medium-Sized Enterprises (review)

This work takes up a question that is essential for understanding Japanese business history but is, paradoxically, rarely dealt with in the historiographic production in Western languages: that of medium-sized specialized firms. With a few exceptions, big business occupies pride of place in the English-speaking literature devoted to the industrial history of Japan and small companies are only covered as they relate to large firms, whose growth they underpin as subcontractors and buffers to cushion cyclical shocks (dual structure system). Outside this dominant model, however, there is another type of firm that remained in the background in the high-growth years but then established itself in the 1980s on the world market as a major new actor in Japanese industry—the companies that Ferguson Evans calls the leading medium-sized enterprises (LME, chuken kigyo in Japanese).

Nakamura Hideichiro has published studies on these firms since the mid-1960s in Japan, in which he shows that some small companies managed to grow on their own without joining the subcontracting networks of big business, their primary characteristics being pronounced family ownership, capital market funding, and niche market positioning made possible by the mastery of specific technologies. Evans explicitly refers to the work done by Nakamura and seeks to situate the LMEs in a long-term analysis ranging from the Meiji Restoration to the present day with a view to showing that individual family enterprises have remained a fixture in Japanese industrial history. Covering nearly a century and a half in 200 pages with the goal of shedding new light on Japan's industrial development is indeed a big challenge, but the outcome is disappointing. Three types of problems can be highlighted.

First of all, the question of a definition for the LMEs must be posed in order to define clearly the scope of the research. The lack of such a definition is itself a weakness in the work by Nakamura, which Evans fails to remedy. Thus, the LME is "first and foremost a type of business" (p. 15), even though Nakamura's examples cover firms employing from two hundred to two thousand persons with a capitalization ranging from ¥40 million to ¥1 billion. Using a precise definition in terms of size, organizational type, or product would have made it possible to evaluate and plot the appearance and rise of the LMEs. Absence of this no doubt explains the teleological nature of this work, which focuses primarily on the historical continuity of the LMEs and their ability to adapt. The many examples given, which may or may not be representative, are all cases of firms that have been successful in the long run, whereas a focus on breaks and failure would no doubt have yielded a more balanced picture.

Yet the main problem with this work is its hagiographic approach. Recognizing the role of individual entrepreneurs—whereas historiography in Western languages has tended to prefer macroeconomic or cultural explanations for the "Japanese miracle"—is a good thing in itself. However, the impression one gets from reading this book is that the success of the LMEs, first in Japanese industry then on the world market, is solely due to the individual action of self-made men. At times, the heroic image of these bosses becomes a caricature, as with Mizuno Rihachi, who was born in 1884, lost his father at the age of 9 and left school at 11. Driven by his passion for baseball, he, along with his brother, founded a sports store in Osaka, Mizuno Brother & Co., which, thanks to his determination, hard work, and managerial flair, managed to overcome the difficulties and make a name for itself as one of the largest sporting goods companies in the world, "epitomized in the Mizuno spikes Carl Lewis wore to set a new 100 meter sprint record of 9.86 seconds in 1991" (pp. 80-81). This mythicized vision of the individual entrepreneur is...