THE COLLAPSE OF BUSINESS STRATEGY AND ITS SETTLEMENT IN THE MONETARY CRISIS

Abstract

From the second half of Taisho Era to the beginning of Showa Era, many firms loosely carried out strategies for expansion and for that reason they collapsed. Kawasaki Dockyard Co., Ltd. was a typical case of them.
The company had acquired huge profit during the First World War. But its management became worse in the second half of Taisho Era, because the company excessively carried out strategies for expansion in the depression. Moreover, in the process, the company excessively depended on its main bank. This bank was Jugo Bank. Therefore, when Jugo Bank had collapsed in the Monetary Crisis in 1927, Kawasaki Shipkyard Co., Ltd. collapsed too. The process of this collapse of the company was a typical case of many management collapses in this age. However, the process of settlement of the company differed from those of other collapsed firms. Because the company had an important position in the Japanese national defense program, and Jugo Bank, the main bank of the company, too had special position in the Japanese financial circles.
This article traces this process of the collapse and settlement in Kawasaki Shipyard Co., Ltd..