Beyond the Firm: Business Groups in International and Historical Perspective

By Takao Shiba; Masahiro Shimotani | Go to book overview

somewhat different approach. While SMHI built up its own dealer network, MNHI chose to split off its sales division altogether. Thus, in March 1950 MNHI bought 90 per cent of the stock of Fuso Motor Sales Ltd. ( Fuso), which had been established previously by its bus and truck dealers. Subsequently, the dealer network subsidiaries comparable to those of SMHI were placed under the auspices of Fuso ( Mitsubishi Motor 1993: 873). This resulted in the formation of a group of 'sub-subsidiaries', but, as before, the group was connected with motor vehicles and not with shipbuilding or heavy equipment.


Conclusion

In June 1964 the three fragments of the former MHI ( MSL, SMHI, and MNHI) were reunited into a new Mitsubishi Heavy Industries Co., Ltd. (new MHI). The reason for the combination was concern over impending capital liberalization and the future competitiveness of Japanese firms in the heavy equipment industry, along with the fact that the three sister companies had advanced into essentially the same areas. It was rational, then, for their managers to seek to eliminate overlapping investment and R. & D. through the unification of the three. There was a strong feeling that the company, which had formerly been one, should be put back together, and the managers of other former Mitsubishi zaibatsu-derived companies also desired a strong heavy industries core company in the corporate complex that was then being reassembled ( Mitsubishi 1990: 56). These factors worked in favour of the recombination.

As of the end of September 1964, there were only nineteen legal subsidiaries (control of 50 per cent or more) held by the new MHI ( Mitsubishi 1964). This figure rises to fifty-five, however, when affiliated companies (defined here as those in which holdings are 25 per cent or more) are counted in ( Mitsubishi 1990: 387). The scope of the current chapter has not allowed consideration of all the legal subsidiaries, but the majority of these were involved in vehicles, air conditioning and heating equipment, agricultural equipment, etc., and close examination of these companies would not affect the overall course of the discussion. From the late 1960s, however, the number of legal subsidiaries began to rise substantially, reaching thirty-nine by the end of March 1975 ( Mitsubishi 1976). Some former subsidiaries also disappeared during this period, indicating the formation of a large number of new subsidiaries. These new post-1964 subsidiaries can be roughly classified into three types: those formed in response to changes in the business environment or entry into new fields (e.g. the spin-off of Mitsubishi Motors Corp.), those resulting from joint ventures with overseas companies (e.g. Caterpillar Mitsubishi Co., Ltd., which took over

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Beyond the Firm: Business Groups in International and Historical Perspective
Table of contents

Table of contents

  • Title Page iii
  • Acknowledgements v
  • Contents vii
  • List of Contributors ix
  • List of Figures xi
  • List of Tables xiii
  • Introduction 1
  • 1 - The History and Structure of Business Groups in Japan 5
  • Part I - The Corporate Complex 29
  • 2 - Diversification Process and the Ownership Structure of Samsung Chaebol 31
  • Introduction 31
  • Notes 55
  • 3 - From Zaibatsu to Corporate Complexes 59
  • Introduction 59
  • Conclusion 85
  • References 86
  • 4 - Structure and Strategy of Belgian Business Groups (1920-1990) 88
  • Conclusion 104
  • References 105
  • Part II - The Corporate Group 107
  • 5 - Growth Via Politics: Business Groups Italian-Style 109
  • Introduction 109
  • Notes 132
  • References 133
  • 6 - Business Groups in the German Electrical Industry 135
  • 7 - A Path to the Corporate Group in Japan: Mitsubishi Heavy Industries and Its Group Formation 167
  • Introduction 167
  • Conclusion 181
  • Notes 182
  • Bibliography 182
  • Part III - Assembler-Supplier Relations 185
  • 8 'Japanese-Style' Supplier Relationships in the American Auto Industry, 1895-1920 187
  • Conclusion - Japanese-Style' Supplier Relations? 208
  • References 213
  • 9 - The Subcontracting System and Business Groups: the Case of the Japanese Automotive Industry 215
  • Conclusion 239
  • Notes 240
  • References 241
  • Part IV - Japanese Business Groups 243
  • 10 - The Organizational Logic of Business Groups: Evidence from the Zaibatsu 245
  • Conclusion 270
  • Notes 271
  • References 272
  • 11 - Learning to Work Together: Adaptation and the Japanese Firm 274
  • References 288
  • Afterword 291
  • Notes 295
  • Index 297
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