Friday, April 27, 2012

A Theoretical Framework for Corporate Longevity

Makoto Kanda, my research colleague in Japan, has completed his research of shinise (revered Japanese companies that have remained in business for a very long time).  The first phase of his research was to conduct in-depth interviews in 17 companies out of which he built a theoretical framework describing common factors observed in these companies that have survived well over 100 years.  He then developed a survey to test the five factors identified in this theoretical framework.  It is this survey that we are using both in Japan and in the United States to test our hypothesis: In Japan he is comparing survey results of shinise and non-shinise to see where there is a significant difference on these factors; then we will compare results of 100-year-old U.S. companies to those of Japanese shinise.  Since we are now ready to begin reporting some of our results, I thought we should start with an explanation of the five factors that form the theoretical framework we are testing.

Our hypothesis is that there are five factors which together result in unique corporate behaviors leading to longevity.  These factors are:
1.  Building corporate identity through careful management of organizational culture
2.  Protecting core/unique strengths through a balance of maintaining tradition and continuous improvement and innovation
3.  Strong relationships with business partners (customers and suppliers)
4.  Investments in developing employees, with a particular emphasis on leadership succession
5.  Strong relationships with the local community

Future postings will explain the results of our research: check back to discover what behaviors are unique to long-lived firms!


  1. I'm very keen to see more of your research findings particularly to learn more about the companies that are not on the top of the news. I wonder how much ownership, as in privately held, or at least for a time privately held impacts longevity. Plus in today's world, growth often occurs through acquisition, how do you correct for number two? Especially if the current strengths were acquired?
    a very interested fan

  2. Sorry for the late reply. Though a large portion of old companies are privately held, the percentage is no greater than in the general business population. The old companies tend to grow more through internal (some would say 'natural') growth than through acquisition. As a result, many of the old companies exhibit slower growth rates....which may be one reason they survive.