" Nakagawa's definition emphasizes zaibatsu as a natural historic product in the process of economic development. In contrast, Shinichi Yonekawa (1981) defines zaibatsu as "a diversified corporate group which is tied to the "ieh" concept based upon family (plural members) and/or blood-related plural kinfolks." These definitions have technical differences but they all emphasize two basic concepts in the definition of zaibatsu: one is an exclusive interlocking ownership by family or kin members, and the other is diversified business operations.
Let us apply this definition of Japanese zaibatsu to the Korean chaebols. Korean chaebols confirms the second concept, namely diversified business operations. Large Korean chaebols exert oligopolistic power in their respective industries (Sakong, 34, 1980). Differences, however, exist in the first concept. As far as the exclusive interlocking ownership is concerned, the concept does apply to Korean chaebols. A Korean chaebols controls 20-40 percent of the stocks of its subsidiary companies listed on the Korean Stock Exchange directly or indirectly (Hattori, 65, 1984a). According to the Korea Development Institute, the stock ownership by a chaebols family may actually exceed 50 percent if we consider those companies that are not listed on the stock exchange (KDI, 1982). .
But the Japanese concept of family does not apply to Korean chaebols, because there is a fundamental difference in meaning between Japanese and Korean concepts of family (Hattori, 1984a.) The concept of family in Japan has two connotations. One is the concept of family based strictly on blood relationship, and the other is the concept of "ieh," that is not only based on blood relationship but also adoption. The Japanese do not make much distinction between the two connotations and generally apply the ieh concept in case of family inheritance (Hattori, 1975). On the other hand, the Korean concept of family is strictly based on the blood relationship.
