THE ORIGIN OF BUSINESS IDEOLOGY IN THE UNITED STATES AND JAPAN (1990)

In this paper, I attempt to define “business ideology” as a decisive element in management and entrepreneurship. Then I go on to examine comparatively the role it played in 18th century Japan and the United States. At first I define the concept of business ideology as the fundamental principle, goal or spirit of business which entrepreneurs regard as the soundest basis for the foundation, maintenance and development of the enterprise, greatly affecting strategic and managerial decision-making. Secondly, I describe the business ideology and/or the spirit of the modern capitalism of Benjamin Franklin as the origin of modern entrepreneurship in the United States. Franklin's business values and ideology did not only emphasize the virtues of temperance, industry, frugality and rational techniques for making money; but also strongly affirm freedom, individualism and social responsibility in modern industrial society. It is worth emphasizing that Franklin's ideas and example contributed to the formation of modern work ethics and business ideology which promoted American industrialization. Thirdly, I touch upon the social values and business ideology of the Tokugawa era of Japan in the 18th century. In order to understand the business ideology of the era, two examples, the business philosophy, Shingaku, by Baigan Ishida and House Rule formed by the Mitsui have been examined. They both approved the traditional values of diligence, frugality, obedience, loyalty and patience based on Confucianism, affirming “profit making” without guilty feeling. Among the many aspects of management of the House Rule of the Mitsui in 1722, we observe the strongly conservative and firm policy that prohibited new ventures in favor of maintaning the ancestral business and the House. Finally, comparing the business values and ideology of America and Japan in the same century, we consider “what were the real factors” of promoting industrialization in the modern society by re-examination of Weber's theory of the spirit of the modern capitalism. We observe that the spirit or ethics in the business values of the Tokugawa era, Baigan's thought, and the business ideology of the merchant's House is similar to what we find in Weber's theory of modernization. They all emphasize the virtues of diligence, frugality, honesty, patience and confidence of profitmaking, “the spirit of capitalism”. If we compare American values with Japanese values in the 18th century, or the business ideology of Franklin with the Merchant's House Rule, clear similarities as well as differences will be found. Diligence, frugality and profit-making are the same values for both sides. However, the big difference is the fact that America produced progressive, innovative minds, the spirit of freedom, criticism and individualism, but Japan failed to evolve those ideals in the Tokugawa era. My final point is that these American spirits or ideas were vital factors in bringing about spontaneous industrialization and modern capitalism. Therefore, we observe something missing in Weber's theory of modernization. Especially Weber failed to appreciate the role of individualism, freedom, and innovation in driving entrepreneurship and industrialization.