Japanese Business Model Keiretsu

It is the name given to a form of corporate structure in which a number of organisations link together usually by taking small stakes in each other and usually as a result of having a close business relationship often.

Japanese business model keiretsu. The model s success after the second world war meant that japan was the first asian country to become a first world nation where living standards and longevity were. Keiretsu keiretsu is a japanese word which translated literally means headless combine. Japanese style keiretsu relationships are not costless.

If a keiretsu fears that one of its member companies may be taken over it can deliberately shield itself by raising mutual shareholding s to fight off potential takeover attempts. 2 keiretsu groups played key roles in the restructuring of declining industries m l. One of the real strengths of the japanese economy in the post war period has been in its capacity for fast adaptation to macroeconomic shock e g.

In the legal sense it is a type of informal business group that are loosely organized alliances within the social world of japan s business community. Keiretsu refers to the japanese business structure comprised of a network of different companies including banks manufacturers distributors and supply chain partners. The japanese business model is one of the most intriguing aspects of japanese society in my view due to its ability to export high quality products at low prices.

Weaknesses of keiretsu important vehicle for high economic growth during post war period regulated interest rates lower cost of borrowing subsidies and tax measures supportive of investment protectionist trade policies technological catch up the main bank closely monitors. Keiretsu is a japanese term referring to a business network made up of different companies including manufacturers supply chain partners distributors and occasionally financers.

The japanese model this is the business network model which reflects the cultural relationships seen in the japanese keiretsu network in which boards tend to be large predominantly executive and often ritualistic the reality of power in the enterprise lies in the relationships between top management in the companies in the keiretsu network.