Beyond the Firm: Business Groups in International and Historical Perspective

By Takao Shiba; Masahiro Shimotani | Go to book overview

10
The Organizational Logic of Business Groups: Evidence from the Zaibatsu

MICHAEL L. GERLACH

Every economy faces an ongoing set of decisions concerning the optimal organization of its business activities. Firms acquire other firms, they sell corporate assets, they form strategic alliances, and they spin off their factories and divisions as independent enterprises--all in response to changing technological and market opportunities. In so doing, they help to establish boundaries around business units and define the interrelationships among those units.

Special attention has been devoted in recent years to distinctive features of Japanese economic organization, and in particular to the ways in which firms in Japan have crafted alternatives to traditional arm's-length markets or vertically integrated hierarchies. 1 But the reality is that these alternative forms are by no means unique to Japan. Whether termed alliances, networks, hybrids, or intermediate forms, both the business press and students of organization have recognized the increased importance of the loosening of organizational boundaries in many sectors in advanced industrial economies, and especially in the complex networks of alliance that constitute Silicon Valley and other areas of intensive high technology activity.

The starting point for this chapter is the observation that the common interest among Japan specialists and organizational theorists is no coincidence. That is, both the emerging industrial structure of Japan that resulted in the present-day keiretsu and the emerging structure of contemporary high technology that has resulted in strategic alliances share similar origins: they have arisen to resolve the co-ordination and governance problems created by undeveloped markets of the sort common in dynamic and innovative sectors of the economy. Phrased differently, business groups and strategic alliances are both the natural outcome of conditions of rapid and unpredictable industrial development and technological change.

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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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