ntained such great staying power is that Japanese business managers, or companies, have a major talent for turning adversity into advantage, since, historically speaking, Japan's biggest hardships have inspired its most impressive innovations. In addition, the internal societal pressures that Japanese companies have overcome during the last few years--slow economic growth, price deflation, over-crowded markets, and copying of innovations by rivals, are spreading to the rest of the rich world Western world.
This study seeks to determine the major reasons why the keiretsu form of management, even after so many changes and so much pressure still maintains an incredible competitive advantage in the global economy. The study will include an investigation of the pertinent literature available on the topic, followed by an attempt to take the most important points of that literature to form a basis for further understanding of the importance of the keiretsu concept. Finally, the study will attempt to show what directions Japanese managers must go in their attempts to re-invent the keiretsu.
A great body of literature has been written trying to come to grips with the success of the Japanese style of management. Ozawa (1996) suggests that Japan used a neomercantilistic formula to build competitive export industries such as autos and electronics. But, he argues, the consequence has been the rapid transplantation abroad of those once-fostered industrial activities. In other words, the concept of the keiretsu has been exported as well as Japanese products. Dunning (1995), in his discussion of the Japanese paradigm of the keiretsu claims that this is a role model that could, and should, be copied by all nations wishing to build profitable economies. Casseres-Gomez (1994) writes in the Harvard Business Review that this "price-industry-flow" mechanism which is a major part of the keiretsu structure is similar to David Hume's "price-specie...