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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Death at 1428 Years Contd...

Kongo Gumi, which was run by the Kongo family and which was believed to have been operating continuously since 578 AD7,8, 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. It was credited with constructing many of the religious buildings that beautify the Japanese landscape. Kongo Gumi's first project, the Shitennoji temple9 is still standing and by the early 2000s, the company had supervised its reconstruction seven times.

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"Every time it burnt down, there was more work for us,"10 quipped Toshimichi Sakamoto, head of the company's management and planning division. However, the company's ultimate demise, according to experts, was due to factors such as over extending its financial resources during an economic downturn and failure to effectively respond to social changes...

Excerpts >>

7] Martin Whitehead, "Family Controlled Businesses - Successfully Navigating Growth and Generational Transition,"www.pwc.com.

8] Adi B. Godrej, "The Family Concern,"Business Today, January 16, 2005.

9] The Shitennoji temple was the first Buddhist temple built in Japan in the sixth century. It was located at Osaka, Japan. It was rebuilt many times, the last time being in 1963.

10] David Pilling, "Kongo Gumi: Building a Future on the Past,"www.ft.com, October 19, 2007.

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