Japan – Major Source of Conceptual Shocks
...embeddedness in an industrial structure whose major relationships and transactions are in the final analysis by and large not based on economic considerations of profit-making, but rather on political considerations of mutual protection and long-range expansionary goals. Two huge intersecting organizational structures ensure order among Japan’s large corporations: the set of horizontal keiretsu and the web of federations in every branch of industry. They perform powerful complementary functions that are extralegal and frequently at odds with official regulations (such as the anti-trust legislation that is supposed to be enforced by Japan’s Fair Trade Commission). The keiretsu that tie companies in different industries together, and form huge corporate safety nets, have become relatively well-known since 1989. But the many federations that tie companies in the same industry together, ensuring relative stability, order and hierarchy among firms in the same field, have remained largely unexamined. There are no all-powerful keiretsu centers that exist to dictate corporate policies to members. But the assertive tendencies of each firm are strongly curtailed by the informal commands of group integration, mistakenly represented in Japanese parlance as loyalty (they have no choice). A few very powerful companies (Toyota, for example) need not worry much about fellow keiretsu...