In response to the recent financial crisis, Chaebols have acted much more quickly than the Keiretsus
. As soon as the Korean Government decided to accept the International Monetary Fund (IMF) loans, Chaebol leaders reduced their investment priorities, focused on maintaining a stable cash flow, and increased efforts to downsize companies through wage freezes or layoffs.
Third, as studies by Lincoln, Gerlach and Ahmadjian (1996) and Gedajlovic and Shapiro (2002) indicate, keiretsus
and stable owners in Japan have traditionally used their clout to redistribute profits and smooth earnings towards helping poorly performing units within a group (often, at the expense of better performing units).
I'm sure your business would like to one day be the same size as your average keiretsu
(almost all the significant companies in Japan are aligned to one of about 6 keiretsu
or business groupings.
Thus, the interrelationships between these venture capitalists and their emerging partners seem to duplicate the competitive infrastructure underlying Japanese keiretsus
. In a similar fashion, Microsoft has created the E-Commerce Alliance, which provides both funding and software expertise to channel potential rivals into developing integrated e-commerce packages that will have system integrity and synergies with existing Microsoft software (Dalton & Wilder, 1999).
One of the factors supporting this lengthy planning horizon is the "patient capital" produced by the close relationship between Japanese firms and their banks and by the sharing of stock holdings by keiretsus
. Large debt-to-equity ratios allowed by these relationships free firms from heavy reliance on stock financing and the requisite short term profit reporting.
: Because the ownership of individual firms in a Keiretsu
is spread among affiliated companies without a major owner, leadership tends to be collective without a major owner, leadership tends to be collective rather than autocratic.
Joint-venture partnerships help firms deal with the complexities of the Japanese market such as keiretsu
relationships, exclusionary business practices, and complicated distribution systems.
This corporate structure is known as the financial or horizontal keiretsu
. Prowse (1992) and Berglof and Perotti (1994) posit that the financial keiretsu
, with its extensive cross-shareholdings, makes for one of the most complex governance structures.
Prior plant locations by firms in the same business group was measured as the log of the count of prior plant locations in a given country by all firms in the same business group (horizontal keiretsu
An important outcome of the work of these researchers is the asking of the key question, "whether the keiretsu
structures like those so common in Japan should be copied by Japan's leading competitors and trading partners?" (Lincoln et al., 1996, pp.
, the system of cross-ownership among automakers and suppliers, has long been identified by U.S.
ties formed and used by the major Japanese business groups have long been a fundamental phenomenon of the Japanese business system.