Abstract: Initial Intent and the Development of an Employee Ownership Plan: A Case of a Japanese Trading Company in the Early Twentieth Century

Yasuhiro Shimizu, Mayumi Inoue, and Satoshi Fujimura


Employee ownership plans have a relatively long history in capitalist countries, but many studies have focused on the effects of these plans, such as those on the workplace environment or on firm survival, and evaluated the plans in terms of their effects. In this paper we focus on how the plan was affected by the surrounding environment and changed its functioning as an incentive system. The case is drawn from the materials of a Japanese trading company, Kanematsu. It had a peculiar governance structure: almost all the share interest was held by the directors and upper employees even before the system started although it had started as a personal business. The plan was to ensure the continuity of management with voting rights, and the granting of shares was done rather selectively. As more university graduates entered the company, it became more difficult to select prospective directors among those with the same experience, and the share grants became universal. The paper will provide an example of how a system with ideological purposes was forced to transform into a part of the company's incentive system.