Kongo Gumi: Lessons from the Legendary Family-Owned Business' Longevity and Ultimate Demise


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Case Details:

Case Code : BSTR316
Case Length : 13 Pages
Period : 578-2007
Pub Date : 2009
Teaching Note :Not Available
Organization : Kongo Gumi
Industry : Construction
Countries : Japan

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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"If the family is in good shape, then the company picks up. If the company is in good shape, then the family picks up. So it's like two wheels going together."1

- Masakazu Kongo, the 40th Kongo to lead Kongo Gumi (578-2006).

"The average span under each leader was thirty-five years. Even when there were no qualified male heirs, the company's leadership was passed on to sons-in-law who willingly took on the family name. And the leaders were not always males - the thirty-eighth leader was a female family member. But family name was not enough to qualify for leadership. The company was faithful to find the most qualified family member."2

- Gerald R. Chester, president of Strategies@Work, LLC3, in 2007.

"The circumstances of Kongo Gumi's demise also offer some lessons. Despite its incredible history, it was a set of ordinary circumstances that brought Kongo Gumi down at last."4

- James Olan Hutcheson, founder and president of ReGENERATION Partners5, in 2007.

Death at 1428 Years

In January 2006, the Osaka, Japan-based Kongo Gumi Co. (Kongo Gumi) was liquidated and it became a wholly-owned subsidiary of Takamatsu Construction Group Co Ltd.6 (Takamatsu).

With this ended the astounding 1,428-year run of Kongo Gumi as a family-owned business.

The business, spread across 39 generations, was believed to have been the world's oldest continuously operating family-owned business till then.

Kongo Gumi: Lessons from the Legendary Family-Owned Business' Longevity and Ultimate Demise - Next Page>>

1] William T. O'Hara, Centuries of Success: Lessons from the World's Most Enduring Family Businesses, (Published by Adams Media, 2003)
2] Gerard R Chester, "Oldest Company in the World Collapses,"www.strategieswork.com, July 1, 2007.
3] Strategies@Work, LLC is a privately held management consulting firm.
4] James Olan Hutcheson, "The End of a 1,400-Year-Old Business,"www.businessweek.com, April 16, 2007.
5] ReGENERATION Partners is a consulting and advisory group serving the family-owned and family-managed enterprises.
6] Takamatsu Construction Group Co Ltd., based in Osaka, Japan, is a large company mainly involved in the construction business.

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