The object of this paper is to trace the formative process of business organization in coal mining of the Sumitomo family and analyze its business results during the period.
It is a well-known fact that the Sumitomo family invested in other undertakings as well, a large amount of profits derived from operating the Besshi Copper Mine and thereby diversified its business into coal mining, banking, rolled copper industry and warehousing business in the 1890's.
In such a case, the high level of strategic decision-making shown by the Sumitomo family is worthy of consideration, since it extended its business to coal mining with the intention of not only providing for itself a great deal of coal which was consumed in the Besshi Copper Mine, but also obtaining a profitable investment.
In 1893, the Sumitomo family bought the Shoshi Coal Mine and, for the first time participated in coal mining. Further, the next year the Sumitomo family succeeded in purchasing the Tadakuma Coal Mine which was regarded as very promising in the Chikuho Coalfield, and then opened a place of business in Wakamatsu (coal trading center).
Business results at these three places were very favorable because the years 1894 and 1895 were the boom years due to the Sino-Japanese War. In a few years after starting its business, the business organization of coal mining was arranged in order, and at this point the Sumitomo family acquired a position as one of the leading coal-mine owners in the chikuho district. But, afterwards coal mining business of the Sumitomo family couldn't show a substantial development because of its failure to get other promising coal mines from the latter half of 1890's to the first decade of the 20th century, in addition to the Tadakuma Coal Mine.
As mentioned above, in this paper we made an attempt to observe the managerial characteristics of the formative process in coal mining business of the Sumitomo family.
