Keiretsu


Also found in: Dictionary, Encyclopedia, Wikipedia.

Keiretsu

A network of Japanese companies organized around a major bank. The term is also used outside of Japan to describe how a large corporation with many subsidiaries and associated firms can manipulate revenues. For example, firm A and B are controlled by firm C. Firm A is forced to buy its input from firm B at a high price. As a result, A is unprofitable and B is very profitable.

Keiretsu

In Japan, a number of independent but related companies centered on and financed by a single bank and/or a joint stock company. That is, the institution (and no other) provides financing for companies in the keiretsu. There are two main types of keiretsu. A horizontal keiretsu is essentially a diversified conglomerate; that is, it may have companies in several, completely unrelated industries so as to reduce the risk of loss if one industry or other has a bad year. A vertical keiretsu, on the other hand, is more centrally controlled such that companies in the same keiretsu provide all steps on the supply chain. For example, a mining company may sell a metal to a refinery in the same keiretsu, who then sells it to an auto company, who then sells cars to consumers. In Japan, these consumers are often employees of the very same keiretsu. Critics of this system contend that they are inefficient; proponents, however, argue that they are sustainable and have helped Japan recover from the post-war period. See also: Japanese miracle, Zaibatsu, Chaebol.

keiretsu

a Japanese term relating to a network of customers and their suppliers working within a related industry, or with a single customer. Developed by the multinational organizations in Japan initially with the idea of exercising control over suppliers. Kereitsu has developed to mean closer links between customer and supplier and includes the sharing of technologies, of skilled employees and of product development. See SUPPLIER DEVELOPMENT, LEAN MANUFACTURING.
References in periodicals archive ?
They keep their finger on the local trade pulse for major customers (other keiretsu members), and they help set up raw material and components supply networks.
Indeed, interviews with American suppliers conducted in 2000 by Ro, Liker, and Fixson (2008) suggested that the emulation of Japanese supplier relation practices by American automakers has created a "new emerging US model" that differs from the traditional Japanese keiretsu model.
More specifically, the valuation in equity markets of keiretsu members in dissimilar industries could be different.
However, Dietmar Ostermann, global lead director for PRTM's automotive industry practice and author of the report, says: "Despite the fact that Toyota Keiretsu suppliers show very well as potential buyers in our study and have the financial strength and capability to be a consolidator, we don't expect them to be very busy with M& A activities.
Moreover, these relationships were more pronounced in non-keiretsu than keiretsu firms.
Main Stage has live music on the Sunday, with headliners Keiretsu rapidly gaining national recognition for their huge live drum `n' bass/breakbeat sound.
Ask Rick Wagoner or Bill Ford how they feel about the fact that the Mitsubishi keiretsu, or industrial group, is about to give a $5 billion bailout to Mitsubishi Motors on top of an earlier $5 billion infusion.
In the Japanese system, central firms in a relationship called keiretsu own a majority of shares of other firms (e.
A specialL jazz showcase at Durham's Gala Theatre a week tonight features seven-piece jazz-funk outfit Highstreet Anywhere, contemporary jazz group Different Worlds, piano trio Jazz Up, and Keiretsu, a ten-piece band who combine jazz with a drum and bass break beat fusion.
The Japanese Style of Business Accounting presents research, generally by Japanese business faculty, into the structure of the Japanese economy, its business organizations including the keiretsu form of affiliation, and the resultant implications for its accounting and auditing systems.
At first, the uninitiated reader is tempted to lump organizational arrangements across these contexts--new-economy startups in Silicon Valley, intra-enterprise partnerships in Budapest, horizontal keiretsu in Japan--into the common mold of "network" forms of organization.