Understanding ‘Keiretsu Model' in Japanese Industry

and its Implications.Group 8

Rituraj DhirDevanshu Kulthe

Nitin TewariSatvik Jani

Satyadeo ThakurShishir Sharma

What is Keiretsu?• Keiretsu is a Japanese word which, translated literally, means headless

combine.• Formation of enterprise groups called keiretsu was established in

Japan after the Second World War.• Form of corporate structure in which a number of organizations link

together, usually by taking small stakes in each other and usually as a result of having a close business relationship.• A way to defuse the traditionally adversarial relationship between

buyer and supplier.

Keiretsu Structure

History of Keiretsu• Japan's corporate governance system known as a keiretsu dates back

to the 1600s.• Initially propelled by the Japanese government's newly formed Meiji

Restoration in 1866 as the world entered the industrial revolution.• The prototypical keiretsu appeared in Japan during the "economic

miracle" following World War II.• Prior to the war, Japanese industry was controlled by large family-

controlled vertical monopolies called Zaibatsu. Four major zaibatsu that dominated were: Mitsubishi, Sumitomo, Yasuda and Mitsui.