Research Projects

Pre-modern Family Institutions and Origins of Implicit Contract in Japanese Corporate Culture: A Case Study of the Sumitomo Group

(Funded under General Research Fund Scheme 2009 – 10 Exercise, Research Grants Council, Hong Kong)

Principal Investigator

Guan Wenna, Honorary Research Associate and Research Assistant Professor, Hong Kong Institute for the Humanities and Social Sciences
(Remarks: Dr. Guan Wenna left the University’s service from October 1, 2014.)

Total Fund Awarded

HKD 448,000

Project Duration

December 2009 – August 2012

Project Description

This project aims to understand how this economically motivated practice was integrated into the social life of the family; to explore the norms that embedded and perpetuated the economic contract with non-lineal heirs in the social fabrics of the family; and to investigate important mechanisms of diffusion in the adoption of implicit contracts, such as demonstration, learning, competition, and communal and government reinforcement. Through a close examination of the history of the Sumitomo Group and the changing milieu up to the Meiji Era, we seek to discern how the interplay between pre-modern family institutions and business pursuits engendered lasting impact on the organising and governing principles of Japanese capitalism. Our findings will shed new light on the evolution of Japanese corporate culture and provide a useful template for comparative studies of capitalism. A major finding from the vast literature on Japanese management is that capitalism in Japan embodies an “implicit contract” model that distinctively differs from the Anglo-American model based on formal contractual arrangements and legal-rational authority. In this context implicit contract concerns shared understandings about the status, roles, obligations and entitlements of the parties involved, as well as the principles governing their interaction and conflict resolution in various situations. Enforced largely by social norms and conventions rather than by legal mechanisms, it has provided the basis for the development of such frequently mentioned organisational practices as lifetime employment, rank and pay by seniority, and emphasis on in-company training and job-specific skills.