Kongo Gumi: Lessons from the Legendary Family-Owned Business' Longevity and Ultimate Demise
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Please note:
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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Case Details: |
Price: |
| Case Code |
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BSTR316 |
For delivery in electronic format: Rs.
300;
For delivery through courier (within India): Rs. 300 + Rs. 25 for Shipping & Handling ChargesThemes
Entry Strategy/ Competitive Strategy/ Differentiation |
| Case Length |
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13 Pages |
| Period |
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578-2007 |
| Pub Date |
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2009 |
| Teaching Note |
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Not Available |
| Organization |
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Kongo Gumi |
| Industry |
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Construction |
| Countries
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Japan |
Abstract:
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The case is about the Osaka, Japan-based construction company
Kongo Gumi Co. (Kongo Gumi), which was regarded as the world's oldest
continuously operating family-owned business till the end of 2005. In January
2006, the company was liquidated and became a wholly-owned subsidiary of
Takamatsu Construction Group Co Ltd. Kongo Gumi, which was run by the Kongo
family and was believed to have been operating continuously since 578, had been
engaged in the construction of Buddhist temples since its inception. In more
recent times, it had diversified into general construction works as well.
However, factors such as over-extending its financial resources during the
economic downturn and failure to effectively respond to social changes led to
the company's ultimate demise, according to experts.
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Experts felt that family-owned businesses
could learn a lot from the business practices followed by Kongo
Gumi. In particular, its value-based management and succession
planning practices interested the experts. The factors that led
to its downfall too provided some vital lessons to family-owned
businesses, they felt.
Issues:
» Understand the issues and challenges in running a family-owned business.
» Analyze the reasons for Kongo Gumi's longevity and downfall as a family-owned
business.
» Understand the importance of managing family dynamics and succession issues in
family-owned businesses.
» Appreciate the importance of value based management and the importance of
recognizing and responding to market trends.
Contents:
Keywords:
Family-owned business, Family dynamics, Generational dynamics, Succession principles, Succession planning, Value-based management, Motto, Principle, Management ethic, Management style, Leadership, Technology, Computer-aided design, Diversification, Business environment, Social changes, Construction, Financial, Economic downturn
Death at 1428 Years
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