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The difference in the concept of family in Japan and Korea has an important implication to the family inheritance and to the ownership structure of zaibatsu and chaebols. In Korea, the family inheritance is strictly based on the blood relationship, with the eldest son given the priority. This system is called "the unequal inheritance favoring the eldest son" (Lee, 1975). In Japan, however, the concept of ieh is applied to family inheritance, and its primary purpose is to maintain the wealth of the family under the leadership of a capable person rather than to bequeath the wealth only to the blood-related family. Therefore, the family wealth may be bequeathed to an adopted son with no blood relationship or to an in-law. In other words, under the ieh concept, the head of the family is not as much the successor of blood lineage as the one who takes the leadership role in the family (Hiroshi, 1967).
Understanding the difference in the concept is critical in comparing the ownership and management structure of the Korean chaebol and Japanese zaibatsu. In Japan, because the family wealth is inherited by a person on the basis of his or her ability to preserve it, regardless of blood relationship, it is a common fact that the zaibatsu family hardly participates in management of the zaibatsu business. The zaibatsu families in Mitsui, Mitsubishi, and Sumitomo, which have a long business history, have not participated in management (Lie, 1986). In the case of Mitsui, its family members are prohibited from participating in the management of those companies whose stocks they own, from being a guarantor to other people, and from belonging to a political party or being government officials. This separation of business ownership and management is to maintain the family wealth as an economic foundation. In contract, in Korea, as the family wealth is inherited on the basis of blood relationship, the blood-related family members usually assume the managerial responsibility also.
