Merging with People Staff into the Temp Holdings joint holding company (2008)

A merger chosen for its form, not its partner

Measured from the partner’s side, what this merger brought in looks small. People Staff’s ¥30.1 billion of sales was a little over a tenth of Temp Staff’s ¥228.9 billion, and its Tokai customer base was in later years absorbed along with the name itself. If the decision nevertheless appears to have settled the following nine years, the reason lies in the form rather than the substance. A structure in which a share transfer creates a new holding company and operating companies are lined up beneath it as subsidiaries is excessive for taking in one firm, but appropriately built for taking in a second and a third. Had the company remained a single operating business led by its founder, neither Nihon Techseed nor Intelligence could have been accommodated by the same procedure.

That structure, however, raised the speed of acquisition while deferring the question of how to bind together the companies it lined up. The reorganization of ten domestic subsidiaries from 2018, the move to an SBU system, and the difference in profitability between the businesses it bought and the businesses it grew in-house all appear as consequences of holding them side by side. A structure that makes merging easy is not the same as having merged — the form chosen in 2008 was a means of gaining scale and, at the same time, an acceptance of a question that would stay with management long afterwards.