as potential problem to the business community worldwide. First, how did keiretsu initiate in Japan?.
HOW DID THE KEIRETSU BEGIN?.
Japan is an island nation. In the ancient time, Japan was ruled by feudal landlords and their.
samurai (warriors) in small feudal fiefdoms like in many countries. Every feudal landlords and their.
samurai provides protection to the common citizens within their boundary of feudal fiefdom. In.
return, the common citizens pay their tax and dues to the feudal landlords as well as their absolute.
loyalty. This basic relationship has persisted over the years even to the modern time.
The same pattern of this relationship applies to the Japanese corporations today. The.
corporation is viewed as the landlord, a top in the social ladder, and subcontractors, wholesales,.
retailers, and consumers are considered as the common citizens in their descending social hierarchy.
This structure has provided a historical foundation for a vertical pyramid in the marketplace [Sakai,.
l990]. This structural relationship provides the rationale for intensive Japanese pursuit for market.
share in both domestic and global marketplaces. If and when the landlords expand their boundary of.
fiefdoms, that is, market share, they would have a greater power base for taxation and manpower in.
their territory.
In the l9th century, the Meiji government launched a historical and drastic economic.
modernization in Japan. A few prominent groups of industrial and financial enterprises were given.
the task of modernizing the Japanese economy in various fields such as manufacturing, banking,.
shipbuilding and military industrial production. These enterprises were called zaibatsu. They.
dominated most of the pre-World War II Japanese industry. The zaibatsu has undergone some.
difficult times following the World War II, but they have transformed into the form of keiretsu during.
the recovery period.
Japan is known as a group-oriented society.