Keiretsu

This article discusses the concept of the Japanese keiretsu. Interestingly, translated literally, it means "headless combine." As we learned, the keiretsu system, which is a weaker form of zaibatsus, is characterized by organizations forming close relationships to work together. Often, firms are suppliers to each other.

American trade officials disliked keiretsus because they saw them as a restraint of trade. Corporate America, however, has not been so opposed. Chrysler is cited as an example of an American keiretsu; it is claimed that Chrysler has such good relationships with its suppliers that the two sides work together to lower costs and share savings. (Not sure that this has been working all that well for Chrysler, but who knows!)

The American keiretsu is different from the Japanese version, however, because Japanese keiretsu were regulated by specific laws and were virtually compulsory, but in other parts of the world, any loose network of alliances between more than two organizations is considered a keiretsu. Ken Auletta predicts that the keiretsu will become "the next corporate order."