Business Information and Business Libraries in Japan

Shukei MAESONO (1)
Professor, Aoyama Women's College

(1) 4-4-25, Shibuya, Shibuya-ku, Tokyo, Japan 150-8366; Fax: +81-3-3409-8199. The paper was delivered at the International Workshop "Information Transfer - as an instrument for trade opportunity in the international arena", Berlin, November 1-7, 1999, Foreign Relations Office, Deutsches Bibliotheksinstitut (DBI/BA).

1. Meaning of business information
2. Beginning of business information service in Japan
3. Information has an influence upon efficiency
4. Role of information in decision making
5. Types of information available for business
6. Reorganization of management organization
7. Management information system based on the computer
8. Activities of business libraries in Japan
9. What business information service should be in a digital & network age

In this paper business information is defined as useful information for business, and business libraries in Japanese companies that offer this type of information are discussed. Business libraries in Japan started to be installed in the late 1980's. However they were inactive, and their reputation was overwhelmed by that of business libraries installed by public corporations. The latter's business information service imposed a great impact on post-war business libraries. In early 1960's, Japanese companies became highly aware of information because of information flooding and introduction of computers. This was the time when decision making theory was introduced to Japan-where information was the element that played a significant role in companies' decision making. This was the time when companies recognized the importance of information. Companies explored type or coverage of subjects that were useful for business, and after identifying them they further went to evaluate ways to obtain, assess and utilize that information. Companies managed to attain some success in the area of internal information; however they could not find an decisive means for external information. Computers were tried but failed. In order to obtain external information effectively, management organization was reassembled. It was in this process that business libraries drew attention and their fulfillment became a purpose. This is evidenced by the increase of company members of Japan Special Libraries Association. In response to the request from companies, business libraries began to improve the organization of conventional reference books, journals, organized and scanned them, so that business information could be incorporated into departments where it seemed useful. Libraries in planning section and research section both started to act rigorously. These activities are now slowing down because of the recession. The arrival of information digitization and networking has also made pessimistic those who consider that libraries will no longer be necessary because everyone has easy access to information, that business libraries have no future. However, these simply added to the flooding of information. Business libraries will remain an indispensable entity because of their ability to pick and evaluate trustworthy information. The libraries have to keep up the effort to remain so.


1 Meaning of Business Information

In Japan, business information has two meanings. One, is information that is useful for business used frequently in profit seeking organizations and the industry. Another is information in commercial and industrial fields.

DBI's Proceedings of the "International Seminar 1997; Business information" contains a paper "Introduction to business information", by Susanne Mehrer, who defines the business information quoted from Business information in the UK, ed. by Kim Potts (Hampton, 1996) as follows:

"Business Information is information which helps a company manage and market itself in a competitive environment. More specifically, it is taken to cover three broad types of information: marketing research information, company information and financial information."

By this definition, business information refers to "the information useful for business" in Japan. Therefore, business information here shall be considered information, which helps a company manage and market itself to take it into further consideration.

Information that is useful for business comes in many types, depending on the company's business fields, departments, and position. Generally speaking, the three broad types of information mentioned in the aforementioned definition is indeed basic information. However in Japan, business information usually covers a wide range of information in the areas of politics, law, economics, customs, psychology, education, and technical information that concerns the company.

The information that a company actually utilizes in business practices is only the tip of the huge information iceberg. The company naturally evaluates and carefully selects the information that seems to influence its business. However all of the information in the iceberg is business information.

Business information is either orally passed on or recorded in some media. Either way, a department or personnel of the company obtains the information and passes it onto the department that actually uses or seems to have some use of that information. Libraries play a role in this process, of acquisition, evaluation and supply of this recorded and publicly open information.

Susanne Mehrer enlists Academic libraries, Public libraries, and Libraries in commerce and industry as the libraries that offer business information to companies. DBI's Proceedings 1997 also introduces a number of examples where these libraries offer business information.

Such libraries in Japan also offer business information to companies. Of them all, libraries in many kinds of associations and institutions are active in business information. Regional libraries in Chamber of Commerce and Industry especially are actively offering business information to small to medium sized companies. In small cities, many businessmen rate these libraries higher than public libraries and use them more often.

Comparatively bigger companies install their own libraries and endeavour to obtain business information just like other countries. In Japan, companies recognized the importance of information in early 1960's and improved the role of libraries as part of this awareness. They decided that they could not get ahead of their competitors if they had only obtained information from public institutions, and this led to their building their own information systems.

Most of company libraries offer some amount of business information. These libraries have a variety of public names, such as: library, business library, information center, knowledge management center, but they are altogether defined as company libraries. However, some of the company libraries are installed in order to improve employee education and welfare; for this reason, those libraries that offer business information should be defined as business libraries.

Here in this paper, I am going to focus on business libraries installed by Japanese companies. These libraries were once requested to supply business information. To cast light upon the background and reasons of this request, and see how libraries responded to this demand, should be beneficial in considering business libraries in this information, digitization and networking era. This analysis will be useful not only for company libraries but public organizations in supplying business information.


2 Beginning of Business Information Service in Japan

Let us see how Japanese business libraries have been providing business information.

Contemporary Japanese companies were born as one of banks established by the government's guidance in 1868. "Double entry bookkeeping system" was introduced to these banks. It is said that this system enabled companies to grasp internal information, the information that generates within the companies, more accurately.

Companies' public activities to obtain business information outside of the companies, are said to have started in 1890 when the Bank of Japan introduced an inquiry staff. The Bank of Japan is claimed to have had primitive library activities such as the collection, sorting, management and supply of written materials, but the detail is unknown.

Following this move, the Mitsui Bank (now the Sakura Bank) installed an inquiry section in 1882. The record remains that this section was making manual for organizing useful book. This could be called the first Japanese business library.

As for technical information, it seems as if there was a time when information was taken from catalogues that came with machinery imported from abroad. In 1899, Tokyo Shibaura Electric Co. (now Toshiba) founded the Mazda Research Center. It is believed that Japan's first technical library was established there. The first technical library in record was the library that President IWASAKI of the Asahi Glass founded in 1918 for its Research Center.

Some of the company libraries around this time were not business libraries. An Example is the Yawata Iron & Steel Co. Library founded in 1913. This library was established in order to improve employee education and entertainment. This library later influenced many other manufacturing companies, and led to the births of many other company libraries as the education and welfare facilities for employees.

After the end of the Second World War in 1945, many business libraries were founded in Japan. Details are spared but there are two points worth a mention.

First, most business libraries were small and rather inactive. Their activities were limited to storing books and other recorded materials and offering them on demand. Should they supply business information, it was an act on request, not an active conduct. Demand for business information was in itself rare, and the libraries were simply warehouses of materials.

Second, there were a few fairly large libraries that were active in these circumstances. Anyone knowledgeable are aware of their activities on business information then and now.

Most of them were libraries installed by public corporations. The leader of these was the East Asia Economic Research Bureau Library built in 1908 by South Manchuria Railways Co. established in 1906. Their activities are renowned and quoted in many areas.

Also famous, were the Japan Industrial Club Library built in 1916, and Mitsubishi Economic Research Institute Library built in 1932. The latter was a library established by the Mitsubishi Finance Group in order to centralize research functions, and actively provided member companies with business information.

As shown in these historical overviews, there were many business libraries in Japan before the World War II. However they were inadequate in supplying business information, and the companies did not demand much. On the contrary, public corporations were more active in business information supply and their reputation was high.

The names of these active organizations were deeply ingrained in people's memories. After the post war chaos, this memory gradually resurrected. "The word Business Library reminds me of Mantetsu", said Mr. DOKO Toshio, President of Japan Federation of Economic Organizations, at the symposium that is to be mentioned later.


3 Information has an Influence upon Efficiency

Why does business need information? Japanese businessmen would say, from experience "without information business is likely to fail".

Nowadays it is common sense that information influences the efficiency of business and individual activities. If one knows a few routes to get to a specific goal, he/she can freely choose the route to cut down on expenses, time, and energy. Namely, adequate information leads to output -or the maximum output-from least input.

With lack of information, the individual takes the most efficient action within the range of already obtained information. That action might coincidentally be the same as the efficiency of when all information is obtained. But the efficiency of that action is likely to be below that of action with all information.

If the individual does not have any information for a specific action, the action will be based on a hunch or estimates, and the efficiency is likely to be low. As a result, the probability to be behind efficient rivals is high.

Low efficiency generates wasted cost, time and energy, and a possibility not to reach the goal. In some cases, reaching the goal may have already lost its meaning.

Company's business activities are the same as those of individuals. It was in early 1960's that Japanese companies became aware of this. They were first focusing on the relationship between company actions and information, but they replaced it with the relationship between information and an individual, and finally came to understand the importance of information in business.

Around this time, Japanese companies were in the position where they HAD TO focus on information. Towards the Tokyo Olympics in 1964, the mass media were growing rapidly, making everything into information. The made-up word Informalized Society became a trend, engulfing the society in flood of information. At the same time, the powerful information processing machine-computers-were beginning to prevail in large corporations.

The public was gradually beginning to be aware of information. Under such circumstances, industrial organizations began to tackle on problems of roles of information on business, and began the activity to emphasize the importance of information. Going with the flow, the following information books were translated into Japanese one after another in early 1960s, becoming best selling books for businessmen.

Of all the above books, the one that made companies aware of the importance of information and motivate them to collect and utilize information, was H.A. Simon (later the Nobel Economy Prize winner) 's "decision making theory".

Decision making theory makes clear the role of information in companies. It pointed out the possibility that unwelcome result could generate from lack of information. The common sense -- Information affects efficiency-is doubtlessly derived from this theory.


4 Role of Information in Decision Making

Simon's decision making theory is originally a theory for business administration. If an organization is to be divided into management, middle management, and operation, the theory targets management. However, this theory was later applied to many hierarchies of business activities, and also to individual actions. Since this theory deeply concerns business information, we shall focus on it a little further.

This theory introduces a principle that decision making is derived from management philosophy and facts related. Management philosophy refers to the company's natural features and policies, whereas facts related means internal and external facts that concern the decision. One of the mainframes of this theory states that if these two prerequisites are determined, decision is automatically derived.

In order to grasp the facts that concern the decision, the decision makes must receive information that comprises that fact. If that information is not appropriate, the decision will not be the most appropriate one either. If the decision is inappropriate, the business actions that are based on the decision will also generate inappropriate results. This is subframe.

This theory explains the mechanism of information influencing business, in the following diagram.

information decision action result

The tendency to make judgement upon information and data to obtain maximum results spread amongst companies. As well as computers, this theory is claimed to have contributed to bringing the scientific rationality upon the Japanese style management at the time.


5 Types of Information Available for Business

Based on these theories, companies began to pour much effort around 1965 in the collection and utilization of information. All of the companies faced the question "which is the information that is useful in business?"

The decision making theory only explains this as information that transmits internal and external facts. From this expression and past experiences, each company managed to understand that this kind of information included internal and external information. However, there were a number of diverse problems that required decision making, and the topics of information that concerned these problems seemed infinite.

All companies managed to resolve internal information. This was because they had been making all kinds of data and reports to understand internal facts. They also had the confidence to make internal information on demand.

The problem was external information. Companies scanned and evaluated many management scholars' theories. The following is a list of business information ranges evaluated by some companies. The items in this list directly link to the types of business information collected and supplied by business libraries.

K. Urabe (Professor of Hitotsubashi Univ.'s "types of decision" is a list adopted by some middle class companies as the range of collected external information. Here are all of the big items, and small items that concern sales and personnel. The sales and personnel items were picked because decision making in these areas frequently adopts external information.

Table 1: types of decision (K. Urabe, Professor of Hitotsubashi Univ.)

(1) on organization
(2) on production
(3) on sales sales estimation, location of business office, roots of distribution, packaging, naming of goods, pricing, advertising, planning of sales promotion, marketing research
(4) on finance
(5) on personnel recruiting, personnel arrangement & promotion, job analysis, evaluation of personnel, wages, welfare, safety & sanitation, suggestion system, retirement, collective bargaining, processing of claims, profit sharing

Some companies listed information needed for planning, in the belief that companies need information that best conveys external facts.

Other companies listed in detail the information that concerned marketing, in the belief that the area that is most important for a company and requires accurate grasp of external situations, is marketing. The following is an example of information collection by an electric company.

  1. Market analysis
  2. Sales analysis
  3. Consumer survey
  4. Advertising survey

After trial and error, companies realized that they had to decide their own range of external information to collect. The type of information needed in repetitively occurring decision making situations was clear by experience. Based on this experience, some middle-sized companies developed a list of range of information to be collected.

Most companies gave up making the list of external information to be collected. All companies were aware that information was necessary in decision making. They also thought that in the near future, this type of information would be processed by computers, therefore it needed to be developed at some point. However, large companies, that had a lot of items to deal with, realized the vastness and complications of this process and withdrew from the list making.

More than half of the large companies then tried to implement information-mind on each personnel, and tried to use the personnel to choose and evaluate external information that seemed beneficial.


6 Reorganization of Management Organization

Reconfiguration of management structure was indispensable in order to collect beneficial information from all personnel. Conventional management organization was constructed by responsibility and authority. Organization chart could be drawn in a clear pyramid shape, based on partial charge.

The flow of information was a set of orders, reports and correspondence either from top to bottom, bottom to top, or sideways. However, this official structure had a disadvantage. The more loyal the personnel was to the partial charge, the less of irregular information was transmitted. Another disadvantage was the tendency that the bigger the organization grew, the more stagnant the information flow became.

To fill this gap, management published an in-house magazine House organ, and implemented a suggestion system to enable a smoother flow of information. Each personnel also exchanged unofficial information. However, no matter how much effort was poured in, it seemed as if the exchanged information had limits and problems.

There arose a need for a method to officially obtain as much useful information as possible for decision making. It seemed desirable to develop an information system from the viewpoint of information distribution, apart from the management structure. The conclusion was to develop a system that overlooked the charges and authority to allow anyone to pass to anywhere the information concerning the company.

A pharmaceutical company delegated one of the president secretary's phone lines to a line for information supply from personnel, and made the phone number known to everyone. The president of a home appliances manufacturer kept the president office door open for 30 minutes before the starting hour every morning and requested personnel to supply information. Another chemical product manufacturer announced that any printed materials concerning the company could always be supplied to the planning section, by anyone, anytime.

The top management who adopted these direct information supply systems received fierce protests from the middle management. It seemed out of company principle and hierarchy for subordinates to skip their direct chiefs and supply information directly to the top management. To this, the top management answered " Computer systems are direct current systems. Are you saying that we should stop that too?"

Then came a new problem about noises. The credibility and flooding of information. However these could be resolved to a degree. As an obligation, information were labeled with the name of the supplier, and complaints about the company and personal rumors about bosses and colleagues were forbidden. Also recorded information supply was preferred by guidance to oral information supply.

Most companies requested their personnel to supply information as it was when they obtained it. This was a conclusion after the debates. In August 1963, a Management Information Systems Symposium was held by the Japan Productivity Center. One of the themes at this symposium was J. C. Hendric (Vice-President in Raython Inc.)'s "information should be supplied after evaluation", from his "Competitive intelligence: Information espionage and decision making." (American Management Assoc., 1959)

There were a few company managers at this symposium. All of these managers insisted that they preferred unevaluated data, rather than evaluated information. Even though they did add "after strict filtering," the Japanese managers definitely had very different ideas from American managers. However their ideas meant that business information could be supplied without too much anxiety.

I participated in the preparation and management of this symposium. It was already clear that companies' external information was going to be the focus, so I included four papers on business libraries by American managers in the 10 papers distributed to the participants.

The papers were chosen from AMA reports of the American Management Assoc., Proceeding of Executive Conference on Organization and Management Information, Chicago, 1957, and Proceeding 1958 (Univ. of Chicago, 1957 & 1958). Needless to say business libraries were argued much in the symposium.

The companies who called on all employees to supply useful external information for business focused on in-house business libraries and started reinforcing them. These business libraries had been receiving recorded trustworthy external information daily, and the companies realized that they should be utilized to the best of their abilities.


7 Management Information System based on the Computer

Companies were introducing computers in order to obtain useful information for business. At first, they processed in-house business information by computers. This internal information was best processed by the power of computers.

It was between 1965 to 1970 that large Japanese companies introduced computers. In 1960, there were only two large computers in Japan. In 1965 there were more than 100 units, but half of them were installed at the government institutions and the other half at banks and other companies. Around 1970, the number of computers reached a few hundred units, and most of the increment was introduced in the commerce and industry.

Apart from the few exceptions, computers were first introduced by large companies. The companies automated finances and accounting, and then salary and inventory management. After that the application of computers gradually increased, until important internal information was processed and supplied to the management by computers.

In those days most of the computers were claimed to be generic machines. However, most of them were used for specific purposes. In theory, these specific uses could be integrated to enable computers to be used as generic machines. Furthermore, the computers were thought to be able to provide information that helped total decision making in the management as a result of internal and external information processing.

Examples employing these ideas were beginning to get introduced, giving a birth to the so-called Management Information Systems Boom (MIS Boom). The detonator was MIS Mission, sent to America cooperatively by economic organizations, and a series of translation of American publications represented by the book below.

- Deaden, John & McFarlan, F. Warren: Management information systems: Text and cases. Richard D. Irwin, 1966.

In later 1965, companies who had introduced computes attempted to develop a total system in order to obtain and integrate useful internal and external information for business. As a result, internal information generating from multiple operations was integrated.

Integrated information facilitated the decision making. For example, a warning system was devised where the display would show a warning sign when a multitude of referred information did not reach a certain threshold. By this, management could easily spot abnormality and make a swift decision to pursue its cause and improvement.

However, external information was not that easy. Computers at that time simply did not have large memories. There was a vast amount of information that generated outside of and still concerned the companies, and it was impossible to enter all of the information into computers.

This led to an idea to limit types of external information to be inputted, and the range of the types was thought most appropriate in the aforementioned "list of range of external information." Making of this list accompanied some difficulties, and the few companies that made the list had to resort to human power to compare external information to be entered against the list.

It was necessary to have people to evaluate the information. If an individual looks at the information, he/she should be able to immediately provide the information to the people and departments for whom the information seemed useful, and this meant that memory-lacking computers did not need to be used in this process. In short, MIS failed to incorporate external business information.

At present, this MIS is acting as DSS (Decision support system) and deeming some success for some type of information. However in those days, it was judged impossible to process external business information by computers. This type of external information was subsequently processed manually, which led to the realization of importance of business libraries.


8 Activities of Business Libraries in Japan

Company business libraries are installed because the companies need them. They are not installed by law, so if they fail to satisfy the company's request, they are reduced in size anytime, or ultimately closed. Conversely if they manage to satisfy the company need very well, they will be improved. Because of this nature, business library staff always tried their best to respond to company requests.

Company requests come in the form of a request from some personnel. Their requests depend on their positions. Top management shoulders decision making, so they require information from inside and outside the company that is likely to affect the company. Middle management also requires similar information, within their responsibility range delegated by top management.

Workers in operational level use business libraries to resolve problems that generate in day-to-day operations. To respond to this type of request from office workers, business libraries always had reference books at hand. They also collected periodicals such as academic journals for technical researchers at this level.

Business libraries had to expand the range of collected materials in order to supply business information. Statistics, almanac, white papers had to be widely collected, as well as survey reports, documents, and proceedings. More periodicals also needed to be subscribed.

The most important and energy consuming operation added to the conventional library operations was active supply of business information that was useful for decision making. In order to do this, library staff had to scan received materials. This led to librarians becoming very knowledgeable about operations of each department in the company, deepening the knowledge on the subject, and being competent in English and other foreign materials.

It is almost impossible for one librarian to have all of these assets and scan all of new materials. Some of the librarians were indeed capable of doing this, but it was a rare case. Most business libraries tried to incorporate all of these skills and operations. They divided and delegated the tasks depending on the skill, interest and personality of each librarian.

Many business libraries distributed current awareness magazine, and reinforced reference service. More than half business libraries surveyed information needs of each department and personnel, and immediately supplied the obtained information to those concerned. Not many but some libraries directly supplied topics memo to top management.

Of them all, the information needs survey and business information service by Sumitomo Marine & Fire Insurance Co. Information Center is famous. Also, the Selective Dissemination of Information (SDI) service by Matsushita Electric Industry Co. Technical Information Dept. covered from technicians to top management.

From 1970 to 1990, that is, until this depression arrived, Japanese business libraries were actively supplying business information service. Many of these examples are published in the Bulletin of the Japan Special Assoc. and Journal of the Nippon Documentation Inst. (both written in Japanese.)
Japan Special Libraries Assoc. is constituted by member organizations, more than half of them being business libraries. Most of the business libraries joined the association after 1960, and the increment of members shown below is mostly business libraries. This number indicates that business libraries were very active in this period.

At present, Japan is under extreme business depression and companies are trying to downsize their business operations. It brought redundancy and salary cuts. Business libraries are also affected by this, and their activities are being stagnant. The saying "business information becomes important especially in depression" does not seem to apply in extreme depression.

Table 2: Increase of JSLA membership

Year JSLA member libraries increase notes
1952 56 Established year
1960 316 +260 (an increase by the participation of existing special libraries)
1965 405 + 89
1970 459 + 54
1975 540 + 91
1980 585 + 45
1985 627 + 42
1990 693 + 66
1998 669 - 24 (Decrease by depression)


9 What Business Information Service should be in a Digital & Network Age

Packaged CD-ROMs that record a vast amount of information in digital form, is a very useful resource for libraries. It is a very clearly recorded multimedia form, and contributes to saving space. More than anything, it is easy to retrieve information from CD-ROMs.

Because of the lack of speed in information transmission, CD-ROMs cannot be used in business information supply because in business information, time lag is a problem. However it takes the place of conventional reference books. Libraries consider this to contribute to service improvement, and are hoping that all types of digitally recorded materials clear copyright and quality deterioration issues and act as useful resources.

In comparison, information that flows through networks, will greatly affect business libraries. Such information can be transmitted worldwide and in real time, and can be obtained by anyone anywhere. In early 1990's, some American companies downsized business libraries in the belief that it is an era that an individual can access necessary information, and not an era where information should be centrally managed.

However, there are some problems. Take the Internet for example. There are e-mails where there are specific recipients, but other than that there is too much information adrift on the net. If an individual attempts to filter necessary information, he/she needs to have a certain degree of knowledge on networks and a vast amount of time and energy. Not to mention the presence of untrustworthy information on the net.

If all company personnel spent such time and energy for information search for the company, the personnel would not be able to concentrate on business. Minimum information can be obtained by each individual, however, total acquisition of business information is more efficient in the hand of network specialists.

Faced with the vastness of external information, Japanese companies used to ask for cooperation from all personnel and tried to strengthen business libraries. Here lies the difference between Japanese and American ideas on business libraries. However, American business libraries do not seem to have regressed and it seems as if, during the depression, companies tried to use divided information management as an excuse to downsize libraries.
Business libraries should function as a group of specialists on information including network operations. This is because libraries obtain information from all kinds of media as well as networks, and are a department that is capable of highly trustworthy information.

Overviewing the history of Japanese business libraries, it becomes clear as to why companies need business libraries. In the current depression, business libraries' activities are stagnant, but librarians are challenging the potentials that this network era brings. At least in Japan, business libraries will continue to function as an in-house company information specialist and supply business information.