The Story of Iwasaki Yatarō, Founder of Mitsubishi

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In the history of industrial Japan, few figures are as pivotal as Iwasaki Yatarō. As a son of impoverished samurai parents, Iwasaki took advantage of the upheavals of industrializing Japan to establish one of the world’s largest and longest-enduring corporations, Mitsubishi.

Mitsubishi Corporation has long been a symbol of Japanese industrial technology and wealth. But it started in poverty with the story of Iwasaki Yataro.

Early Life and Background

Born on January 9, 1835, in the Tosa Domain (now Kochi Prefecture), Iwasaki was the son of a low-ranking samurai. This period in Japan was marked by the rigid Tokugawa shogunate system, which dictated strict social and class structures.

His ancestors were part of the Iwasaki clan, which had links to the famous Takeda clan from Kai Province. However, due to financial troubles during the Great Tenmei famine, his family lost their samurai status.

Despite the isolation of the Tokugawa shoguns, Iwasaki was exposed to both classical Chinese education and the growing power of Europeans who defeated China in the opium wars when he was young.

Iwasaki started his career working for the Yamauchi clan, rulers of the Tosa Domain, who had business interests across Japan. At 19, he went to Edo (now Tokyo) for education but returned home a year later when his father was injured in a dispute.

After challenging a local magistrate’s decision and facing jail time, Iwasaki struggled to find steady work until he became a tutor. Back in Edo, he got involved with political activists and studied under Yoshida Toyo, a reformer who influenced him with ideas of modernizing Japan through industry and foreign trade. With Yoshida’s help, Yatarō landed a job with the Yamauchi government and eventually regained his family’s samurai status.

Iwasaki’s big break came when he was put in charge of the Yamauchi clan’s trading office in Nagasaki, where he was responsible for trading essential goods like camphor oil and paper to acquire ships, weapons, and ammunition. This position set the stage for his future success in founding Mitsubishi.

The 1850s and 1860s were a period of great upheaval in Japan. The country was opening up to the West, and the samurai class, to which Iwasaki belonged, was in decline. Recognizing the winds of change, Iwasaki took a bold step into the world of commerce.

Founding of Mitsubishi

Iwasaki Yataro

Iwasaki seized the opportunity provided by the Meiji Restoration of 1868, which overthrew the ruling of the Tokugawa Shogunate. This change abolished the feudal system in Japan and forced the disbandment of the shogunate’s business interests.

Iwasaki bought a number of ships, capitalizing on the growing need for reliable transportation and communication in a country that was modernizing at a breakneck pace.

He founded Tsukumo Shokai, which later became Mitsubishi, in 1870. He founded this shipping company on behalf of the Yamauchi clan and leased the trading rights. The name “Mitsubishi” combines “mitsu” (three) and “hishi” (water chestnut, used in Japan to denote a rhombus or diamond shape), symbolizing the three-diamond emblem of the Tosa Clan.

Iwasaki gained a reputation for ruthlessness as he relentlessly pursued profit. He even sold ships with motors about to burn out. Because of his pursuit of money, he played a huge role in the industrialization of Japan.

Under Iwasaki’s leadership, Mitsubishi didn’t just thrive in shipping; it expanded into various sectors. Iwasaki believed in diversification as a means of stabilizing and growing his business. Mitsubishi ventured into banking, warehousing, insurance, and trade, laying the foundation for the zaibatsu (conglomerate) it would become.

However, his aggressive expansion tactics and involvement in politics attracted criticism and controversy. Mitsubishi’s role in national events, including the Satsuma Rebellion and its rivalry with other zaibatsu, painted Iwasaki as a shrewd, if sometimes ruthless, businessman. People labeled him a “sea monster,” and angry crowds brought effigies of him to burn.

Ties with the Government

Between 1874 and 1875, the Japanese government hired Iwasaki Yatarō’s Mitsubishi to move troops and war supplies. During the 1874 expedition to Taiwan, the government bought several ships, which were later handed over to Mitsubishi, strengthening the company’s ties with the government. This connection helped Mitsubishi grow rapidly.

The company even transported soldiers who put down the Satsuma Rebellion in 1877, linking Mitsubishi’s success to the development of Japan’s modern state and economy. Mitsubishi became one of Japan’s top four zaibatsu (conglomerates). In 1885, Mitsubishi merged its shipping with Kyodo Unyu Kaisha, forming Nippon Yusen Kabushiki Kaisha (NYK), a major global shipping group that still operates today.

This was also the time when Iwasaki also ventured into mining, ship repair, and finance. In 1884, he leased the Nagasaki Shipyard, turning it into a large shipbuilding hub known as the Nagasaki Shipyard & Machinery Works, now a part of Mitsubishi Heavy Industries.

Iwasaki was known for hosting lavish dinners for important guests, spending a lot on these events but also making valuable connections that benefited his business ventures.

Death

In the years leading up to his death, Iwasaki Yatarō faced numerous challenges. His aggressive expansion strategies and involvement in politics had positioned Mitsubishi as a central player in Japan’s industrial landscape but also attracted controversy and criticism. Despite these challenges, Iwasaki continued to steer Mitsubishi towards greater diversification and expansion, solidifying its position as a powerhouse in the Japanese economy.

Iwasaki died on February 7, 1885, at age 50, due to stomach cancer, a condition that he reportedly battled in his final years. The nature of his illness and the demands of his role as the leader of a rapidly growing enterprise likely took a toll on his health.

His death marked a turning point for Mitsubishi. The leadership of the conglomerate passed on to his brother, Iwasaki Yanosuke, who continued his vision of expanding and diversifying the company’s interests. Under Yanosuke’s stewardship, Mitsubishi navigated the complexities of the Meiji period and continued to grow, albeit with a different leadership style.

Legacy and Impact

Headquarters of the Mitsubishi Corporation

Iwasaki Yataro passed away at a relatively young age, but his legacy lived on. He left behind a business philosophy centered on “Shoki Hoko” (paying respects to integrity) and “Shoji Komei” (striving for enlightenment). This philosophy guided Mitsubishi through turbulent times, including the transition through World War II and into the modern era. Let’s explore his legacy and impact in Japan and in the world:

Building Mitsubishi

Iwasaki’s most visible legacy is Mitsubishi, a conglomerate that started as a shipping firm and expanded into various sectors. His vision and entrepreneurial spirit turned Mitsubishi into one of Japan’s most influential zaibatsu, a business conglomerate that played a critical role in the country’s industrialization. Under his leadership, Mitsubishi ventured into mining, shipbuilding, banking, and trading, setting the foundation for Japan’s modern economy.

Impact on Japan’s Modernization

His contributions were crucial during a transformative period in Japanese history known as the Meiji Restoration. By aligning his business strategies with the government’s goals of modernization and industrialization, he helped propel Japan onto the world stage as an emerging industrial power. His initiatives in shipbuilding and transportation were particularly significant, as they bolstered Japan’s infrastructure and global trade capabilities.

Cultural and Social Contributions

Beyond his industrial achievements, Iwasaki’s influence extended to cultural and social domains. He was known for his progressive views on education and his efforts to promote Western-style business practices in Japan. His approach to corporate governance, emphasizing integrity and responsibility, set new standards for Japanese businesses.

Economic Philosophy and Business Ethics

Iwasaki’s economic philosophy was a blend of traditional Japanese values and modern business practices. He believed in the principles of “Shoki Hoko” (respect for integrity) and “Shoji Komei” (striving for enlightenment), which guided his business decisions and interactions. These principles not only shaped Mitsubishi’s corporate culture but also influenced broader business ethics in Japan.

Mitsubishi’s Evolution and Global Presence

Today, Mitsubishi is a global brand involved in everything from automobiles to electronics, real estate to finance. This diversification and global reach are testaments to his foundational vision. Mitsubishi’s evolution from a national conglomerate to a global powerhouse reflects the enduring influence of Iwasaki’s entrepreneurial spirit.

Philanthropy and Community Development

Iwasaki also recognized the importance of social responsibility. His education and community development initiatives reflected a belief in giving back to society. This aspect of his legacy continues through Mitsubishi’s various philanthropic activities, including educational programs and community development projects.

Conclusion

Iwasaki Yatarō was more than just a businessman; he was a visionary who played a crucial role in shaping modern Japan. His ability to foresee trends, adapt to change, and maintain integrity in business practices left an indelible mark on the corporate world. His life story is not just a tale of business success; it’s a narrative about the power of vision, resilience, and the relentless pursuit of excellence. As the architect of Mitsubishi, Iwasaki Yatarō’s influence extends far beyond the confines of his time, echoing through the annals of global business and industry.

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