The Hoshi Ryokan, a traditional Japanese inn, has been managed by the Hoshi family since it was established in 718 A.D., making it the world’s oldest independent family firm.
The inn is currently in the hands of the 46th generation of Hoshis, with Zengoro Hoshi at the helm, who is preparing to hand over the reigns over to his grandson, after the unfortunate death of his eldest son. This hand over will bring the Hoshi Ryokan into its 48th generation of Hoshi family ownership.
The only other business to come close to this legacy was Kongo Gumi, a miya daiku (“shrine carpenter”) construction company established in 578 A.D., which lasted through 40 generations before succumbing to the economic turmoil in Japan during the 1980s.
The Hoshi family credit the longevity of the business to following clear cut succession rules with each passing generation, as well as instilling the simple business motto in each new generation of, “study the water running down a small current”. Zengoro explains that this refers to the ideology of being like that small but powerful stream of water that focuses on removing each small obstacle out of its path as it moves along to improve the stream in the end.
It is this practice of focusing on the present, which to Hoshi is the important task of affording hospitality to every guest, as well as preserving a successful business to bestow onto the next generation, that has allowed the Hoshi Ryokan to pass so seamlessly between so many generations.
Having the family’s, as well as the business’, core values well-stipulated, allows for the Hoshis to ensure that the inn continues to be run along the same successful guidelines, while still allowing each generation to adapt the business model to what attracts the current market.
In order to bypass any conflicts or confusions that could arise from the family growing larger and more diverse with every generation, the Hoshis have instated the strict rule that the family business is to be passed onto the eldest son of each generation. This ensures that every member knows, long before succession needs to happen, who the next owner of the inn is to be.
If there is no eldest son, then a son-in-law is chosen to take the helm, who is then adopted into the family so that the family name is still preserved. This practice also allows the family to bring in new talented blood to the equation through arranged marriages.
As frowned upon as such a practice may be in the western world, arranged marriages to improve business ties is common practice in Korea, and has effectively ensured strong connections between major businesses, including the likes of Samsung and LG.
The succession of the family business is taken very seriously within the Hoshi family, which is why the Hoshi name, along with the family wealth, is only given to the family member inheriting the family business. This practice allows the family to shuffle non-selected children to other family names, as well as easing the adoption process of an heir who has married into the family.
This may seem unfair by modern standards, but this strict protocol has ensured the success of the business for over 1300 years. The strong set of values, as well as the evaluation of the business assets before each succession, has allowed the Hoshi family to achieve what many families cannot. Each new generation tends to come along with their own set of ideas, which can soon crumble down the businesses very existence. But the Hoshis have ensured that each heir is fully invested in the success of the business and keeping its legacy going.
Morten Bennedsen, “Centuries-old Japanese family-owned inn a model for succession”, South China Morning Post, 1 March 2014.