Region and strategy in britain and japan business in lancashire and kansai 1890 1990 (routledge international studies in busin

Region and Strategy in Britain and Japan

Britain and Japan have both achieved, in succession, a position of global economic
primacy. Within each state, one region has served as an economic powerhouse. Both
regions, dominated respectively by Manchester and Osaka, enjoyed a golden age
which coincided with the golden age of their respective national economies.
A pioneering long-term comparison of the two regions of Lancashire and Kansai
is now undertaken in this work. Adopting both an innovative and arguably unique
perspective, each chapter is jointly written by a British and Japanese scholar who are
recognised authorities in their field. Together they make a substantial contribution
to our understanding of the continuing importance of national and regional
differences in industrial development. With chapters focusing upon big business,
electronics, shipbuilding and textiles, the resulting study throws a welcome new
light on world economic history.
Douglas A.Farnie is Visiting Professor at the Business History Unit, The
Manchester Metropolitan University. Tetsuro Nakaoka is Professor of History of
Industry and Technology, Osaka University of Economics. David J.Jeremy is
Professor of Business History at The Manchester Metropolitan University. John
F.Wilson is Professor of Industrial and Business History, also at The Manchester
Metropolitan University. Takeshi Abe is Professor of Business History at the
Graduate School of Economics, Osaka University.


Frontispiece Sanji Muto (1867–1934) in 1931. He served Kanegafuchi Spinning Company
(Kanebo) for thirty-six years, rising to the status of president (1921–30). He became a leading
pioneer in Japan of modern business management. His published works fill nine volumes
(1963–6, Tokyo, Shinjusha).


Region and Strategy in Britain

and Japan
Business in Lancashire and Kansai,
1890–1990
Ei Nichi Ryokoku ni okeru Chiiki to Keiei Senryaku
Rankasha to Kansai no Bijinesu, 1890–1990

Edited by Douglas A.Farnie, Tetsuro Nakaoka,
David J.Jeremy, John F.Wilson and Takeshi Abe

London and New York


First published 2000
by Routledge
11 New Fetter Lane, London EC4P 4EE
Simultaneously published in the USA and Canada
by Routledge 29 West 35th Street, New York, NY 10001
Routledge is an imprint of the Taylor & Francis Group
This edition published in the Taylor & Francis e-Library, 2005.
“To purchase your own copy of this or any of Taylor & Francis or Routledge’s collection of thousands of eBooks please
go to www.eBookstore.tandf.co.uk.”
© 2000 Edited by Douglas A.Farnie, Tetsuro Nakaoka, David J.
Jeremy, John F.Wilson and Takeshi Abe. The copyright to individual
chapters is held by the respective authors.
All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic,
mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any
information storage or retrieval system, without permission in writing from the publishers.
British Library Cataloguing in Publication Data
A catalogue record for this book is available
from the British Library

Library of Congress Cataloging in Publication Data
Region and strategy in Britain and Japan: business in Lancashire and
Kansai, 1890–1990=Ei Nichi Ryokoku ni okeru Chiiki to Keiei
Senryaku: Rankasha to Kansai no Bijinesu/edited by Douglas A.
Farnie…[et al.].
p. cm.—(Routledge international studies in business
history; 7)
A collection of 10 comparative essays, each jointly written by a
British and a Japanese scholar.
Includes bibliographical references and index.
1. Industries—England—Lancashire—History. 2. Lancashire
(England)—Economic policy. 3. Industries-Japan—Kansai RegionHistory. 4. Kansai Region (Japan)-Economic policy. I. Farnie,
D.A. II. Title: Ei Nichi Ryokoku ni okeru Chiiki to Keiei Senryaku:
Rankasha to Kansai no Bijinesu III. Series.
HC257.R44 1999
338.09427’6–dc21 99–29578
CIP
ISBN 0-203-97832-3 Master e-book ISBN

ISBN 0-415-20317-1 (Print Edition)


Routledge International Studies in Business History
Series editor: Geoffrey Jones
1 Management, Education and Competitiveness
Europe, Japan and the United States
Edited by Rolv Petter Amdam
2 The Development of Accounting in an International Context
A Festschrift in Honour of R.H.Parker
T.E.Cooke and C.W.Nobes

3 The Dynamics of the International Brewing Industry since 1800
Edited by R.G.Wilson and T.R.Gourvish
4 Religion, Business and Wealth in Modern Britain
Edited by David Jeremy
5 The Multinational Traders
Geoffrey Jones
6 The Americanisation of European Business
Edited by Matthias Kipping and Ove Bjarnar
7 Region and Strategy in Britain and Japan
Business in Lancashire and Kansai, 1890–1990
Edited by Douglas A.Farnie, Tetsuro Nakaoka, David J.Jeremy, John F.Wilson and
Takeshi Abe


Contents

List of illustrations

1

2

x

List of tables

xii

List of contributors

xiv

Preface

xv

Region and history
DOUGLAS A.FARNIE AND TAKESHI ABE

1

The origins of the region

2

Region and State

2

The region and scholarship

3

The intellectual rejection of the region

4

The resurgence of the region

4

The pre-eminence of Osaka in the regional historiography of Japan

5

The challenge posed by a new approach to regional economic history

6

Notes

7

Region and nation
DOUGLAS A.FARNIE AND TETSURO NAKAOKA

9

The primacy of commerce in the initiation of global economic change

9

A comparison of Manchester and Osaka

12

A comparison of Liverpool and Kobe

19

The changing relationship between Lancashire and London, 1890–1926

21

The rise of the Hanshin (Osaka and Kobe) industrial zone, 1890–1935

25

The era of high-speed growth, 1955–73

33

The repercussions of the oil-price shocks, 1973–80

38

The constraints upon business strategy in Lancashire

42


vii

3

4

The collapse of the export markets of Lancashire, 1926–90

45

The economic involution of Lancashire

47

The repercussions of the emergence of Tokyo as a world city, 1920–90

53

The transition from a manufacturing economy to a service economy

58

The bubble economy in Kansai, 1984–90

64

The importance of regional control over an economy

67

Acknowledgements

69

Notes

69

Comparisons between the development of big business in the

north-west of England and in Osaka, 1900–1990s
DAVID J.JEREMY, TAKESHI ABE AND JUN SASAKI

78

Size of firm

78

Industrial activity

82

Location of head office

88

Strategies and structures

89

Chairmen

96

Survivors

96

Conclusion

98

Notes

98

Japan, Lancashire and the Asian market for cotton manufactures,
1890–1990
DOUGLAS A.FARNIE AND TAKESHI ABE

116

The Lazonick revolution in historiography

116

Barriers to understanding: the difference in business culture

117

Barriers to understanding: the entrenched belief in the primacy of
manufacturing

120

The turning point of the 1890s

120

A comparison of the cotton industries in Lancashire and Japan

122

The advantages of Japan: superior marketing strategy

128

The advantages of Japan: cost-cutting capacity

132

Japan and the China market, 1890–1930

136


viii

5

6

7

8

The repercussions upon Lancashire, 1920–25

141

Japan and the world economic depression, 1929–32

141

The establishment of Japanese primacy in Asian markets: the Dutch East
Indies and India

144

The repercussions upon Lancashire, 1926–39

147

The challenge by the mainland of Asia to Japan, 1945–90

149

The repercussions upon Lancashire, 1945–90

152

Acknowledgements

153

Notes

153

Labour management in the textile industry
KENNETH D.BROWN AND KINGO TAMAI

160

Notes

175

Electronics manufacturers in Osaka and Manchester: a comparison
of Matsushita and Ferranti
TETSURO NAKAOKA AND JOHN F.WILSON

178

Founders: culture and strategy

179

The domestic environment and early company growth to the 1940s

186

Expansion and prospects since the 1940s

190

Conclusions

199

Notes

205

A comparison of Cammell Laird and Hitachi Zosen as shipbuilders
TORU TAKAMATSU AND KEN WARREN

209

Acknowledgement

227

Notes

227

Sources

228

Management education in Japan and the United Kingdom:
regional dimensions
JOHN F.WILSON AND TAMOTSU NISHIZAWA

229

The role and impact of education in economic development

230

Attitudes to management education in Osaka prior to 1945

231

British business and management training prior to the 1940s

235


ix

9

10

Postwar educational reform in Japan and the business response

238

Business schools in Britain: a revolution?

242

Conclusion

245

Notes

247

Industrial research in Osaka and north-west UK from the 1920s to
the 1960s
MINORU SAWAI AND GEOFFREY TWEEDALE

255

Introduction

255

Public research organisations

256

Private industrial research

271

Conclusion

294

Acknowledgements

296

Notes

296

Region and strategy
DOUGLAS A.FARNIE, TETSURO NAKAOKA, DAVID
J.JEREMY, JOHN F.WILSON AND TAKESHI ABE

303

Significant issues arising from the comparison of the Lancashire and Kansai 303
regions
The inherent limitations of a national perspective

304

Region and nation during the era of expansion

305

National and regional policy during the era of re-adjustment

306

The divergence in business culture between Lancashire and Kansai

306

The inherited image and the statistical reality

308

Notes

309

Index

310


Illustrations

ii
Frontispiece Sanji Muto (1867–1934) in 1931. He served Kanegafuchi
Spinning Company (Kanebo) for thirty-six years, rising to the
status of president (1921–30). He became a leading pioneer in
Japan of modern business management. His published works fill
nine volumes (1963–6, Tokyo, Shinjusha).
Map 1
The Lancashire region, 1890.
xvii
Map 2
The Lancashire region, 1990.
xx
Map 3
Kansai, 1894.
xxii
xxiv
Map 4
Kansai, 1990.

17
2.1
Tomoatsu Godai (1835–85). At the end of the Edo period as a
principal officer of the Satsuma Han (now Kagoshima
Prefecture), he inspired the foundation of the Kagoshima Spinning
Mill, the first modern spinning mill in Japan. After the Meiji
Restoration he played an important role in restructuring the
economy of Osaka which had suffered a collapse. In Osaka he
founded not only many companies and factories but also such key
institutions as the Osaka Chamber of Commerce, the Osaka
Stock Exchange and the Osaka Commercial Training School.
2.2
Takeo Yamanobe (1851–1920) in Manchester in 1879. He served 57
Osaka Spinning Company (Osakabo) for thirty-two years and its
successor, Toyo Spinning Company (Toyobo), for two more
years, rising to the status of president (1898–1916). He acquired
the technology of cotton spinning and weaving in Lancashire in
1879–80, and became a leading engineer in the modern Japanese
cotton industry.
2.3
John Whittaker in 1996, the chairman of Peel Holdings plc and
61
the pre-eminent entrepreneur of the Lancashire region.
3.1
The Hartford New Works of Platt Bros. at Werneth, Oldham, c. 82
1900. The ‘New Works’, equipped with labour-saving machine
tools, were built adjacent to the railway from 1845 onwards. At
their apogee they comprised 38 blocks of buildings extending
over 60 acres and employing over 12,000 people.
97

3.2
Coming from the mill, 1990: the Lily Mill, Linney Lane, Shaw,
Oldham. A double mill, built in 1904 and 1917, it was purchased
in 1977 by Littlewoods Ltd and converted into an ultra-modern
mail-order warehouse. The conversion symbolised the transition


xi

4.1
4.2
4.3

6.1
6.2
7.1
7.2

7.3
7.4

from manufacturing to services in a leading mill-town. The
workers coming from the mill may be contrasted with those
depicted by Lowry in his famous painting ‘Coming from the
Mill’ (1930).
The more-looms proposal in the Lancashire weaving trade, 1931.
Japanese competition in the Indian market, 1931.
Great expectations were aroused in Lancashire by the Cotton
Industry Reorganisation Act of 1939 which was, however, shelved
on the outbreak of war.

Konosuke Matsushita (1894–1989), the founder of Matsushita
Electric in 1983 at the age of 89.
Sebastian Ziani de Ferranti (1864–1930). the founder of Ferranti
Ltd, robed in his doctoral gown in 1926 at the age of 62.
British shipbuilding, 1957.
HMS Ark Royal before its launch at Birkenhead in 1937. This
vessel was the third to bear the name first given to Lord Howard
of Effingham’s flagship which led the attacks upon the Spanish
Armada in 1588. The aircraft carrier was torpedoed and sunk in
the Mediterranean in 1941.
Japanese shipbuilding, 1900–90.
A Japanese supertanker constructed in 1971 at the Sakai Shipyard
of Hitachi Zosen on Osaka Bay during the great tanker-building
boom of 1969–74. Its dead-weight tonnage of 238,588 was
tenfold the 22,000 tons of the Ark Royal.

137
147
149

180
180
210
212

213
219


Tables

2.1 Population of the cities of Manchester, Osaka, Liverpool and Kobe,
1871–1991 (thousands)
2.2 Employment in the North-west region of England, 1911–90
2.3 John Friedmann’s hierarchy of thirty world cities, 1990
3.1 Employment sizes of the fifty largest firms in the North-west and Osaka
c. 1907, 1935, 1955 and 1992
3.2 Aggregate North-west employment of NW50 compared to UK
employment of UK50 and aggregate Osaka employment of Osaka50
compared to Japanese employment of Japan 50
3.3 Minimum sizes of the fifty largest employers in the UK and Japan,
1900–1990s showing North-west firms qualifying for inclusion on the
strength of (a) employee numbers in the North-west; and (b) UK
employees; and showing Osaka firms qualifying for inclusion on the
strength of (a) employee numbers in Osaka; and (b) Japan employees
3.4 Industrial activity of the fifty largest employers in the North-west by
firms and numbers (%) employed in the North-west; compared to
industrial activity of the fifty largest employers in Osaka by firms and
numbers (%) employed in Osaka, c. 1907, 1935, 1955 and 1992 (using
UK Standard Industrial Classification, 1968)
3.5 Headquarters locations of the fifty largest employers in the North-west
and Osaka c. 1907, 1935, 1955 and 1992 (%)
3.6 Numbers of firms among the fifty largest with 100 per cent of their
workforces within the region
3.7 Organisational forms of the fifty largest employers in the North-west
and Osaka
3.8 Chairmen as entrepreneurial types (%)
3.9 Survivors: firms present among the regional fifty largest employers,
1900–1990s
3.10 The fifty largest companies in Cheshire and Lancashire, as measured by

employment within the region, in 1907, 1935, 1955 and 1992
3.11 The fifty largest companies in Osaka Prefecture, as measured by
employment within the region, in 1902, 1931, 1954 and 1993
5.1 Machine hours worked per year, 1953–63, in the British and Japanese
cotton industries
6.1 The growth of Matsushita, 1920–95
6.2 The growth of Ferranti, 1907–87
6.3 Domestic production of electrical appliances in Japan, 1950–70

17
48
55
79
80

81

83

89
89
90
95
97
100
108
173
183
185
194

xiii

7.1 Ships built with the support of subsidies under the Shipbuilding
Encouragement Act between 1897 and 1910
7.2 Ships launched in Japan, the United Kingdom and the world, 1936–38
and post-Second World War, 1949–85 (thousand gross registered tons)
7.3 Tonnage of ships launched/completed by Cammell Laird and Hitachi
Zosen, 1950–95 (thousand tons)
7.4 Structure of sales at Hitachi Zosen in the 1995 financial year (% of
total)
7.5 Targets for reductions of shipbuilding capacity in the Stabilisation
Master Plan
7.6 Indices of labour productivity at Cammell Laird (Birkenhead) and in
the Hitachi Zosen Group 1957–80
8.1 The diffusion of internal management training in Japan by 1970
(percentages)
9.1 The number of staff, patents obtained and value of budget and expenses
settled of Osaka Industrial Research Institute, Osaka Prefectural
Industrial Research Institute and Osaka Municipal Technical Research
Institute, 1918–65
9.2 Number of tests and research by Osaka Municipal Technical Research
Institute, 1916–65
9.3 Number of guidance, tests and other activities by Osaka Prefectural
Industrial Research Institute, 1953–70
9.4 R&D in north-west England, 1920
9.5 R&D in north-west England, 1930–47
9.6 R&D in north-west England, 1964
9.7 List of private industrial research organisations in Osaka (at the end of

1923 and in April 1943)
9.8 List of private industrial research organisations in Osaka (post-war
period)
9.9 Innovations in north-west England

214
215
217
218
224
225
241
261

266
268
272
277
282
283
287
296


Contributors

Takeshi Abe is Professor of Business History, Graduate School of Economics,
Osaka University
Kenneth D.Brown is Dean of the Faculty of Legal, Social and Educational
Sciences, The Queen’s University of Belfast.

Douglas A.Farnie is Visiting Professor, Business History Unit, The Manchester
Metropolitan University.
David J.Jeremy is Professor of Business History, The Manchester Metropolitan
University.
Tetsuro Nakaoka is Professor of History of Industry and Technology, Faculty of
Information Management, Osaka University of Economics.
Tamotsu Nishizawa is Professor of the History of Economic Thought, Institute
of Economic Research, Hitotsubashi University.
Jun Sasaki is Associate Professor of the Economic History of Japan, Faculty of
Economics, Ryukoku University.
Minoru Sawai is Professor of Business History, Graduate School of Economics,
Osaka University.
Toru Takamatsu is Associate Professor of the History of Industry and
Technology, Faculty of Information Management, Osaka University of
Economics.
Kingo Tamai is Professor of Social Policy, Faculty of Economics, Osaka City
University.
Geoffrey Tweedale is Senior Research Fellow, Business History Unit, The
Manchester Metropolitan University.
Ken Warren was formerly Fellow of Jesus College, Oxford.
John F.Wilson is Professor of Industrial and Business History, The Manchester
Metropolitan University.


Preface

This study in Anglo-Japanese business history originated in discussions held during
the Anglo-Japanese Conference on Textile History held in Kyoto in 1987, the
proceedings of which were published in 1988 in a special issue of Textile History.
The project has been financed by a substantial grant made by the Economic and

Social Science Research Council of the UK. It has also been supported by the Japan
Society for the Promotion of Science, by the Union of National Economic
Associations in Japan, by The Manchester Metropolitan University, by Osaka City
University, by Osaka University and by the Osaka University of Economics. Its
purpose is to study the history of modern business in an industrial context and to
focus upon the two leading textile regions of Lancashire and Kansai. Those two
major regions have been made the object of detailed comparative study in the belief
that such research may yield insights denied to the students of a single society, even
over a long period of time. The time-span extends over the century from 1890 to
1990 and includes the classic period of Anglo-Japanese relationships. In this way it
seeks to illuminate, by means of a new approach, the history of the world economy
during the twentieth century.
The structure of the book combines four general chapters with six chapters
devoted to key sectors of the economy of the two countries. Each chapter, it must
be emphasised, is a joint product, written in close co-operation by a British and a
Japanese scholar. Each scholar is a leading authority in his own respective field. The
original pioneers of the project were David J.Jeremy in Manchester and Tetsuro
Nakaoka in Osaka. Professor Nakaoka has been able to call upon the assistance of
eminent scholars from such centres as Osaka University, Osaka City University,
Shimonoseki City University and Hitotsubashi University. In Britain Professor
Jeremy secured the willing aid of scholars from the Universities of Oxford,
Manchester, Leeds and Belfast. The process of collaboration between six British and
seven Japanese authors has entailed prolonged and intensive consultation in an
exercise which may be unique in the annals of scholarship. In addition to the normal
channels of communication, six successive international conferences have been held
in order to promote the project. Those conferences were held in Osaka in 1990 and
1993, in Manchester in 1991 and 1994, at Hagley in 1992 and in Glasgow in
1997. To all the participants in those conferences and to their organisers a
considerable debt of gratitude is owed. The British editors wish to record their

xvi

thanks to their Japanese co-editors and especially to Takeshi Abe, without whose
enthusiastic collaboration the work would never have been completed. They
gratefully acknowledge the encouragement offered to them by Professor Clive H.Lee
of Aberdeen. All the editors believe that this work is original in its combination of
subject matter and method, in its comparative and regional approach, in its
extensive use of statistical data, in the blending of text and illustrations, in the
structure of its chapters, in its conclusions and, above all, in the joint authorship of
its separate chapters.


Map 1 The Lancashire region, 1890.


xviii


xix


Map 2 The Lancashire region, 1990.

xx


xxi

Map 3 Kansai, 1894.

xxii


xxiii

.


Map 4 Kansai, 1990.

xxiv