If No Successor Is Decided, the Company Is Forcibly Dissolved: Business Succession Lessons from the Edo Shogunate

Hello.
This is Nagai, the Ieyasu Accountant.

This may be sudden, but

what if modern Japan had a rule where a company was "forcibly dissolved" the moment its president passed away?

What kind of consequences can you imagine?

First, the people working at the company and their families would be in trouble.
Furthermore, business partners would also be affected. In the worst case, it could lead to a chain reaction of bankruptcies.

The larger the company, the more devastating the impact.

However,

In this article, I will explain how such a world was actually not a parallel universe.

・ The Han (Domain) System of the Edo Period

Are you aware that the Edo period was governed in units called "Han" (domains)?
The Edo Shogunate distributed territories (Han) to daimyo across the country and entrusted them with governance; this decentralized control system is known as the Bakuhan system.

Depending on the era, there were about 300 "Han," and the "Han lords" (daimyo) were the ones entrusted by the Edo Shogunate to govern each domain.

▪️ Basic Structure of a Han

▪️ Classification by Daimyo Origin (There were exceptions, but basically all Han lords were daimyo)

You might be wondering how this differs from the governance system of the Sengoku (Warring States) period.

The difference from Sengoku period daimyo is that
Sengoku daimyo were entities that "controlled territory on their own" and were not appointed by a central authority.

On the other hand, daimyo (Han lords) in the Edo period were:
・ Entities entrusted with territory and governance by the Shogun (Tokugawa family)
・ Entities that could not start wars on their own or create independent regimes
If we were to compare modern companies with the governance of the Sengoku and Edo periods, it would look like this.

・ Company Dissolution

The point that a Han was a territory entrusted by the Shogun is important here.

It is as if the Han lord established something like a modern company in that territory
and was governing the Han.
In that sense, the shareholder was not the president, but the Shogun.

Therefore, the Shogun could take away a company from a Han lord based on his judgment.

When would that happen?

For example,
when a Han lord passed away without designating a successor.

Yes,
in modern terms, this is what happens when a company president passes away without naming a successor.

When a feudal lord (daimyo) died in this manner,it resulted in "kaieki" (attainder).Kaieki was a severe punishment involving the confiscation of one's territory. In other words, the company was seized.

You might think, "If the company is seized, the company itself continues to exist and only the president changes, right?"
but,
when kaieki occurred, not only did the feudal lord change, but
basically, the new lord's subordinates were completely replaced.

Therefore, in modern terms,
it is like the company you built as president simply ceasing to exist.Your subordinates would also be left stranded.

This is where the title comes into play.

・ Examples of Kaieki

There are so many examples of kaieki due to a lack of a successor that it's more interesting to look them up on Wikipedia, haha.
Kaieki resulting from the lack of a successor is calledmushi-kaieki (attainder due to lack of an heir).Please refer to Wikipedia as well.

In the midst of this, there were cases where they narrowly escaped kaieki, so I will introduce them.

[Case 1] Yonezawa Domain: The "Lord is Still Alive" Ruse
When the feudal lord Uesugi Tsunanori died suddenly, no successor had been decided. The retainers tried to arrange an adopted heir in a hurry, but since official notification required time, they faked it for a while by claiming, "The lord is still alive."
By reporting his "death" only after the adoption was finalized, they avoided kaieki by the Shogunate.

(Anything goes if you don't get caught...)

[Case 2] Sabae Domain: A Chief Retainer's Plea Prepared for Seppuku
Faced with the crisis of kaieki due to the sudden death of the lord and the absence of an heir, a chief retainer went to Edo alone and pleaded with the Shogunate's senior councilors, prepared to commit seppuku!

He succeeded in getting the Shogunate to allow the domain to continue on the grounds that "there is no internal strife within the domain and the people are at peace" (though it was settled with a partial reduction in territory (kokudaka)).

It's great to have good employees!

・ Summary

What I want to say this time is,

President!

Make sure you prepare a successor.
That is all.

However,

I understand perfectly.
What you, as president, want to say.

In many cases,
the reason why presidents of small and medium-sized enterprises cannot think about business succession even as they get older is, I believe, because the president themselves has become the primary value of the company.

So, you cannot imagine the company after you are gone.
That is why you cannot take action.
I imagine you have such concerns.

There is a solution to that.

The hint lies in management philosophy, but
that alone is not enough.

Whether you are the president yourself, or a wonderful employee who wants to whisper advice to the president,
if you would like to know the solution,
or if you just want to talk to me about anything at all,
I would be very happy if you would apply for a free consultation.

Well then, the next issue is scheduled to be sent on June 7th.

I wish you the best of luck in your management.

Management Philosophy
Through support for building a system where the happiness of workers and the creation of corporate value coexist,
we will make society brighter and more energetic.