Adult adoptions: Keeping Japan's family firms alive

Mariko Oi visits the world's oldest family business and its owner, the 46th Zengoro Hoshi

Adult adoptions: Keeping Japan's family firms alive 6296321062963209

In Japan, an ancient practice has provided a solution for the age-old conundrum - how do family businesses survive when there are no sons to take over?

The tale began in AD717, when the god of Mount Haku visited Buddhist monk Taicho Daishi in a dream and told him to find a hot spring in nearby village Awazu - today's Ishikawa prefecture.

Daishi discovered the spot and ordered his pupil Garyo Hoshi to build a guest house.

Garyo Hoshi, in turn, preached Buddhism to his visitors and adopted a son as his successor who took his childhood name Zengoro.

That is how the world's oldest family business - according to the Guinness World Records - is believed to have started.

Since then, for nearly 1,300 years, the hotel and the name - Zengoro Hoshi - have been passed down the family for 46 generations.

But in a country where a son usually inherits a family name, how have they always managed to have a boy?

Well, there is a slight catch.

"When there were only girls, we adopted a daughter's husband," says the latest Zengoro Hoshi.

"In fact, my father married into the Hoshi family and was adopted."

It is a uniquely Japanese-style adoption known as Mukoyoshi.

Japan has the world's second highest adoption rate of more than 80,000 a year but most are adult men in their 20s and 30s.

"Historically, it's been far more common with families in the western part of Japan where merchant families tried to choose the most capable successor," says Mariko Fujiwara, a sociologist at Hakuhodo Institute of Life and Living.

If you did not have a capable son to succeed, you would try to find a more capable man to marry one of your daughters, she says.

"It was a very pragmatic decision for that family business to survive," she adds.

Even today, the vast majority of Japanese companies are considered family businesses. They include household names such as car-makers Toyota and Suzuki, camera-maker Canon and soy sauce firm Kikkoman.

Suzuki is famously known to have been led by adopted sons. The current chairman and CEO Osamu Suzuki is the fourth adopted son in a row to run the company.

"Family businesses that are run by sons-in-law are much better in many cases than family businesses run by their own sons," says Yasuaki Kinoshita who invests in Japanese companies at Nissay Asset Management.

More: http://www.bbc.co.uk/news/magazine-19505088

Adult adoptions: Keeping Japan's family firms alive

Adult adoptions: Keeping Japan's family firms alive

Anarcho-Capitalist Categorical Imperatives

AnCaps' Laissez-faire Free Trade Zone