Dissertation: The Way to Organizational Longevity – Balancing Stability and Change in Shinise Firms

​In her dissertation in the field of international business, Innan Sasaki investigates the secret of the longevity in Shinise firms. According to Sasaki, certain companies called Shinise firms in a number of countries survive for decades or even centuries although the average life expectancy of firms is decreasing dramatically in today’s business world. In her study, a Shinise firm is defined as ‘a company that has survived for more than a century, preserving the main field of business, and not selling ownership of the company to outsiders’. 

The classic theories of the firm maintain that the firm’s goal is to attain profit maximization in the short run. However, today’s society highlights the limitations in placing profit maximization as the firm’s primary goal. Innan’s dissertation rejects the idea that its ultimate purpose should be profit maximization. Rather, profit making is seen as a necessary condition through which to achieve a higher organizational goal: organizational longevity.

On the basic assumption that organizational longevity is about balancing stability and change, the theoretical perspectives of Innan’s dissertation incorporate routine practice, organizational culture, and organizational identity. These theories explain stability and change in an organization separately and in combination.

Qualitative inductive theory building was used to investigate Shinise firms. Overall, the empirical data comprised 75 in-depth and semi-structured interviews, 137 archival materials, and observations made over 17 weeks.

How contemporary firms can live forever

Innan’s findings indicate that Shinise tenacity (i.e. shared organizational schemata) provides a basis on which to build organizational longevity. In Shinise firms, the founder’s original ideal is still adhered to by organizational members who stubbornly maintain their faith in Shinise tenacity, which continues to influence their thoughts and actions. At the same time, it defines the scope for both top-down and bottom-up change.

‒ Firms intending to establish Shinise tenacity that lasts should adopt values that are morally acceptable regardless of time. Contemporary firms should consider whether or not they think and act on the corporate level in ways that employees and external stakeholders accept and are proud of. Moreover, they should think 50 to 200 years ahead and ask the same question: are they thinking and acting in ways that employees as well as external stakeholders will accept and be proud of in 50 or 200 years, Innan says.

Moreover, Innan’s findings suggest that both the organizational and the local culture, and how they interact affect the longevity of firms.

‒ Contemporary firms should develop a strong organizational culture centered on Shinise tenacity; ideally they should be located in a local community with a strong culture; and they should actively engage in cultural interaction with the community.

She adds that her findings discourage anti-cultural behavior in firms: emphasizing only change (and not stability), engaging in mergers and acquisitions, being listed on publicly listed stock markets, expanding the business (including internationalization), abandoning the home community for short-term profit seeking, and exploiting the workforce or natural resources of the host community (or country).

‒ According to my findings, such activities might shorten the life of the business.

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Innan Sasaki publicly defends her doctoral dissertation The Way to Organizational Longevity – Balancing stability and change in Shinise firms at the University of Turku on Friday, 25 September 2015. The opponent is professor Kiyohiko Ito (University of Hawaii at Manoa, USA) and the custos Professor Niina Nummela from the University of Turku.

The dissertation is available online: https://www.doria.fi/handle/10024/113712