A keiretsu (系列, keiretsu^? lit. system or series) ("ei" pronounced as in "weigh") is a set of companies with interlocking business relationships and shareholdings. It is a type of business group. Look up company in Wiktionary, the free dictionary. ... In economics, a business is a legally-recognized organizational entity existing within an economically free country designed to sell goods and/or services to consumers, usually in an effort to generate profit. ... A shareholder or stockholder is an individual or company (including a corporation) that legally owns one or more shares of stock in a joint stock company. ... This article or section is in need of attention from an expert on the subject. ...

Keiretsu in Japan

The prototypical keiretsu are those which appeared in Japan during the "economic miracle" following World War II. Before Japan's surrender, Japanese industry was controlled by large conglomerates called zaibatsu. The Allies dismantled the zaibatsu in the late 1940s, but the companies formed from the dismantling of the zaibatsu were reintegrated. The dispersed corporations were re-interlinked through share purchases to form horizontally-integrated alliances across many industries. Where possible, keiretsu companies would also supply one another, making the alliances vertically integrated as well. In this period, official government policy promoted the creation of new robust trade corporations which could withstand heavy pressures from intensified world trade competition.^[1] Japanese Post-War Economic Miracle is the name given to the historical phenomenon of Japans record period of economic growth following World War II, spurred both by US investment and Japanese government economic interventionism in particular through their Ministry of International Trade and Industry. ... Combatants Allied powers: China France Great Britain Soviet Union United States and others Axis powers: Germany Italy Japan and others Commanders Chiang Kai-shek Charles de Gaulle Winston Churchill Joseph Stalin Franklin Roosevelt Adolf Hitler Benito Mussolini Hideki Tōjō Casualties Military dead: 17,000,000 Civilian dead: 33,000... Conglomerate is the term used to describe a large company which consists of divisions of often seemingly unrelated businesses. ... Zaibatsu ) is a Japanese term referring to the financial cliques, or business conglomerates, whose influence and size allowed for control over significant parts of the Japanese economy throughout the Edo and Meiji periods. ... This article is about the independent states that comprised the Allies. ...

The major keiretsu were each centered around one bank, which lent money to the keiretsu's member companies and held equity positions in the companies. Each central bank had great control over the companies in the keiretsu and acted as a monitoring entity and as an emergency bail-out entity. One effect of this structure was to minimize the presence of hostile takeovers in Japan, because no entities could challenge the power of the banks. For other uses, see Bank (disambiguation). ... Hostile takeover can refer to: For the business usage see takeover. ...

There are two types of keiretsu: vertical and horizontal. Vertical keiretsu illustrates the organization and relationships within a company (for example all factors of production of a certain product will be connected), while a horizontal keiretsu shows relationships between entities and industries, normally centered around a bank and trading company. Both are complexly weaved together and self-sustain each other.

Although the divisions between them have blurred in recent years, there are six major postwar keiretsu:

Toyota is considered the biggest of the "vertically-integrated" keiretsu groups^[2]. For information on Mitsubishi brand computer monitors, see NEC-Mitsubishi Electronics Display of America Inc. ... The Mitsubishi Bank, Ltd. ... The Bank of Tokyo-Mitsubishi, Ltd. ... Mitsubishi UFJ Financial Group, Incorporated ) (TYO: 8306 NYSE: MTU ), or MUFG, is one of the worlds largest banks with assets of around USD $1. ... The Mitsubishi Corporation (MC, 三菱商事, Mitsubishi Shōji) (TYO: 8058) is Japans largest trading company (sogo shosha). ... Kirin Brewery Company, Ltd. ... Mitsubishi Electric Corporation ) (TYO: 6503 ) is a Japanese company based in the Tokyo Building in Tokyo, manufactures electric and architectural equipment, as well as a major worldwide producer of photovoltaic panels. ... Categories: Mitsubishi companies | Stub ... Mitsubishi Motors Corporation ) is the fifth largest automaker in Japan and the thirteenth largest in the world by unit sales. ... Japan-based Nippon Yusen Kaisha ) (TYO: 9101 ) or NYK Line, is one of the largest shipping companies in the world. ... An ENEOS service station in Japan The Nippon Oil Corporation ) (TYO: 5001 ), or NOC, is a Japanese petroleum company. ... Tokio Marine & Fire Insurance Co. ... For other uses, see Nikon (disambiguation). ... Mitsubishi Chemical Corporation(now part of Mitsubishi Chemical Holdings Corporation) (三菱化学株式会社, Mitsubishi Kagaku, MCC) is a Japanese corporation. ... Mitsubishi Estate Co. ... Mitsubishi Heavy Industries, Ltd (MHI) (三菱重工業, Mitsubishi JÅ«kōgyō) TYO: 7011 is a Japanese company. ... Mitsui Group ) is one of the largest corporate conglomerates (Keiretsu) in Japan and one of the largest publicly traded companies in the world. ... The Sakura Bank, Limited (Sakura Bank さくら銀行 Sakura Ginkō) was a Japanese bank. ... Sumitomo Mitsui Banking Corporation (SMBC, Mitsui Sumitomo Ginko) is a Japanese bank based in Tokyo, Japan. ... Fujifilm TYO: 4901 , NASDAQ: FUJIY is a Japanese company known for its photographic film and cameras. ... The Mitsukoshi Department Store in the Nihonbashi section of Tokyo Utagawa Hiroshige printed an Ukiyoe, in which Mt. ... Suntory Limited ) is a Japanese brewing and distilling company. ... Toshiba Corporations headquarters (Center) in Hamamatsucho, Tokyo Toshiba Corporation sales by division for year ending March 31, 2005 Toshiba Corporation ) (TYO: 6502 ) is a Japanese multinational conglomerate manufacturing company, headquartered in Tokyo, Japan. ... This article is about the automaker. ... Sumitomo Group ) is a family of related Japanese companies, or keiretsu. ... The Sumitomo Bank, Limited (Sumitomo Bank 住友銀行 Sumitomo Ginkō) was a Japanese bank. ... Sumitomo Mitsui Banking Corporation (SMBC, Mitsui Sumitomo Ginko) is a Japanese bank based in Tokyo, Japan. ... Asahi Breweries, Ltd. ... Hanshin Umeda Station Hanshin Electric Railway Co. ... Keihan1 Keihan2 Keihan Bus Keihan Electric Railway Co. ... This article or section does not cite any references or sources. ... Categories: Osaka | Railway companies of Japan | Rail stubs ... For other uses, see NEC (disambiguation). ... Fuyo Group ) is a Japanese keiretsu. ... Fuji Bank Head Office in Tokyo, now Mizuho Financial Group Headqaurters The Fuji Bank, Limited ) was one of Japans major banks during the post-World War II era. ... Mizuho Bank Ginza Branch Mizuho Financial Group, Inc. ... Canon Inc. ... Hitachi may refer to: Hitachi (train) trains in Melbourne, Australia. ... Marubeni Corporation is a Japanese trading company Contents // Categories: Stub ... Matsuya (松屋) Japanese department store. ... Nissan Motor Co. ... Ricoh Company, Ltd. ... Tōbu 50000 series trainset Tōbu 100 series Spacia limited express Tōbu Railway Co. ... The Yamaha Corporation (ヤマハ株式会社; TYO: 7951 ) is a Japanese company with a large number of product areas. ... The DKB Group ) or the Dai-Ichi Kangyo Group is the largest Japanese keiretsu. ... The Dai-Ichi Kangyo Bank, Limited ), abbreviated as DKB ), was one of the largest banks in the world during the latter half of the 20th century. ... Mizuho Bank Ginza Branch Mizuho Financial Group, Inc. ... For the district in Saga, Japan, see Fujitsu, Saga. ... Hitachi may refer to: Hitachi (train) trains in Melbourne, Australia. ... This article is about a truck manufacturer. ... ITOCHU Corporation (In Kanji: 伊藤忠商事, Itō-ChÅ« Shōji) (TYO: 8001) (OTC:ITOCY) formerly C.ITOCHU is a japanese general trading (sogo shosha) concern based in Osaka, Japan, ITOCHU was founded in 1958 by Chubei Ito. ... Tokyo Electric Power (東京電力; Tōkyō denryōku) is a company that supplies power to Tokyo and its surronding area. ... Sanwa Group is a keiretsu, or business group, in Japan, one of the main keiretsus. ... The Sanwa Bank, Ltd. ... UFJ Bank Limited is a japanese bank. ... Mitsubishi UFJ Financial Group, Incorporated ) (TYO: 8306 NYSE: MTU ), or MUFG, is one of the worlds largest banks with assets of around USD $1. ... Hankyu Umeda Station and Department Store Hankyu Railway (阪急電鉄, HankyÅ« Dentetsu) is a Japanese private railway that provides commuter and interurban service to the northern Kansai region. ... Skyliner, Keiseis express train from Tokyo to Narita Airport The Keisei Electric Railway Co. ... Kobe Steel Limited (神戸製鋼所, Kōbe Seikōsho), aka Kobelco, (TYO: 5406) is a major Japanese steel manufacturer, headquartered in Kobe. ... Konica Minolta Holdings, Inc. ... Kyocera Corporation ) (TYO: 6971 , NYSE: KYO) is a Japanese company based in Kyoto, Japan. ... ORIX Corporation (オリックス) is financial services group based in Minato ward, Tokyo, Japan. ... Namba Station and Takashimaya Osaka Department Store Shinjuku Takashimaya Times Square in Shibuya-ku, Tokyo Takashimaya Co. ... The English-language version of Tohos famous logo, used from the early 1960s to the late 1990s. ... This article is about the automaker. ... It has been suggested that Vertical expansion be merged into this article or section. ...

The Japanese recession in the 1990s had profound effects on the keiretsu. Many of the largest banks were hit hard by bad loan portfolios and forced to merge or go out of business. This had the effect of blurring the lines between the keiretsu: Sumitomo Bank and Mitsui Bank, for instance, became Sumitomo Mitsui Banking Corporation in 2001, while Sanwa Bank (the banker for the Hankyu-Toho Group) became part of Bank of Tokyo-Mitsubishi UFJ. Additionally, many companies from outside the keiretsu system, such as Sony, began outperforming their counterparts within the system. The Sumitomo Bank, Limited (Sumitomo Bank 住友銀行 Sumitomo Ginkō) was a Japanese bank. ... Sumitomo Mitsui Banking Corporation (SMBC, Mitsui Sumitomo Ginko) is a Japanese bank based in Tokyo, Japan. ... The Sanwa Bank, Ltd. ... The Bank of Tokyo-Mitsubishi UFJ, Ltd. ... Sony Corporation ) is a Japanese multinational corporation and one of the worlds largest media conglomerates with revenue of $66. ...

Generally, these causes gave rise to a strong notion in the business community that the old keiretsu system was not an effective business model, and led to an overall loosening of keiretsu alliances. While the keiretsu still exist, they are not as centralized or integrated as they were before the 1990s. This, in turn, has led to a growing corporate acquisition industry in Japan, as companies are no longer able to be easily "bailed out" by their banks, as well as rising derivative litigation by more independent shareholders. The phrase mergers and acquisitions or M&A refers to the aspect of corporate finance strategy and management dealing with the merging and acquiring of different companies as well as other assets. ...

Keiretsu outside Japan

The keiretsu model of Japan has not appeared outside Japan, but many non-Japanese businesses are described as keiretsu such as the Virgin Group (UK) and Tata Group (India). Airline alliances such as Oneworld and the Star Alliance have also been described as keiretsu. Generally, these groups exhibit more top-down management, centralized control or (in the case of airline alliances) looser equity ownership connections than do "true" keiretsu. Banks cited as being central to keiretsu-like systems include Deutsche Bank and the early years of JP Morgan and Mellon Financial in the United States. One economic group, the Colombian Grupo Empresarial Antioqueño, is often described as such. Virgin Group Ltd is a group of separately run companies that each use the Virgin brand of British celebrity business tycoon Sir Richard Branson. ... The Tata Group is Indias largest conglomerate company, with revenues in 2005-06 of Rs. ... An airline alliance is an agreement between two or more airlines to cooperate for the foreseeable future on a substantial level. ... For other uses, see Oneworld (disambiguation). ... All Nippon Airways aircraft with Star Alliance livery seen in 2006 A Singapore Airlines Boeing 747-400 in Star Alliance livery while still maintaining its corporate logo on the tail, the only Star Alliance member to do so. ... Deutsche Bank AG (pronounced [2]) (ISIN: DE0005140008, NYSE: DB) (literal translation - German Bank) is a leading global investment bank with a broad private clients franchise, headquartered in Frankfurt, Germany. ... John Pierpont Morgan John Pierpont Morgan I (April 17, 1837 – March 31, 1913) was an American financier and banker, who at the turn of the century (1901), was one of the wealthiest men in America. ... This company has completed its merger with Bank of New York for current information, See The Bank of New York Mellon Corporate headquarters, One Mellon Center in Pittsburgh, at night. ...

The venture capital firm of Kleiner, Perkins, Caufield & Byers (KPCB), a major player in the dot com boom, describes its investment portfolio as a keiretsu.^{[citation needed]} Like the Japanese keiretsu of the postwar period, KPCB has invested in independent companies covering a number of business sectors, and encouraged business connections between those companies, making its portfolio one of the closest analogues to a keiretsu outside Japan. Kleiner, Perkins, Caufield & Byers is a major Sand Hill Road venture capital firm in Silicon Valley. ... Dot-com (also dotcom or redundantly dot. ...

A form of keiretsu can also be found in the cross-shareholdings of the largest U.S. media companies—see Columbia Journalism Review's "Who Owns What" website or They Rule. The Columbia Journalism Review (CJR) is an American magazine for professional journalists published bimonthly by the Columbia University Graduate School of Journalism since 1961. ...

There is an angel investor organization called Keiretsu Forum in America, which describes itself as the largest network of angel investors in the world. Angel Investors (or simply Angels) are affluent individuals who provide capital for business start-ups, usually in exchange for an equity stake. ...

South Korean conglomerates, called chaebol, are often compared to keiretsu, but the chaebol conglomerations are much more similar to a Western conglomerate like General Electric or a pre-World War II zaibatsu. For Korea as a whole, see Korea. ... Chaebol (alternatively Jaebol) refers to a South Korean form of business conglomerate. ... “GE” redirects here. ...

Further reading

• Masahiko Aoki and Hugh Patrick, The Japanese Main Bank System (1994)
• Ronald Gilson and Mark Roe, "Understanding the Japanese Keiretsu," 102 Yale L.J. 871 (1993)
• Yoshiro Miwa and Mark Ramseyer, "The Fable of the Keiretsu," 11 J. Econ. & Mgmt. Strategy 169 (2002)
• Kenichi Miyashita & David Russell, "Keiretsu: inside the hidden Japanese conglomerates" McGraw-Hill (1995)

Notes

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