Japanese Keiretsu system
... However, in the past decade, the Japanese economic is suffering difficulties; its growth’s rate is about 1% or lower in the years from 1992 to 1995. ... This paper will address the Japan’s web of horizontal and vertical business; the Keiretsu system, it wills also analysis the problems that this system is facing in the economical environment. The Japanese main economical structure: 1) The keiretsu system Keiretsu has a long history. During the decades leading up to Japans wartime economy, the zaibatsu (a group of firm) played an important role in Japanese economy. ... Other things such as permanent employment, long-term buyer-supplier relationships created a tightly knit and internally consistent business system, which lead to the evolution of keiretsu networks (Resources from Lincoln, et al. ... Keiretsu can be divided into two basic types: financial (horizontal) and non-financial (vertical). ... Members of horizontal keiretsu are linked by the power and the obligations of the large bank that sits at the centre of the organization and, to a lesser extent, by the groups trading companies; in some instances, they are tied together by a shared history. The cohesiveness of vertical keiretsu, by contrast, depends on one or more large non-financial companies that hold substantial equity positions in affiliates and that serve as important customers and suppliers to the rest of the group.