The intricate links of the Zaibatsu families mirrored the interconnectedness of Japan's society and economy." -Ronald P. Dore,
What is Zaibatsu?
Zaibatsu means "Money Community", which is a combination of the words Zai => Money" + "Batsu => Clan/Community/Tribe".
Zaibatsu is the general name given to family businesses that are usually organized around a conglomerate, controlling a number of related companies and controlling much of modern Japanese industry.
Zaibatsu operate in many different sectors such as banking, mining, manufacturing and transportation.
History of Zaibatsu (1868-1945)
The historical origin of the Zaibatsu dates back to the Meiji Restoration (1868-1945). During this period, one of the cornerstones of the Japanese business model, Japan was rapidly modernizing and industrializing. The government has invested in many strategic collaborations to promote economic development.
These industries, which were later transferred to the private sector, formed the infrastructure of Zaibatsu.
From the 18 Zaibatsu group that stood out in this period, “Mitsui, Mitsubishi , Sumitomo and Yasuda” groups “Big 4”, they are the largest of the Zaibatsu formations.
Other Zaibatsu Groups;
The Impact of Zaibatsu on Purchasing Processes
Zaibatsu operated effectively among Japanese suppliers. Their tightly integrated structure and easy access to international markets have enabled them to gain cost advantages in both national and international markets.
Contributions of Zaibatsu to the Japanese Economy
Industrialization and Modernization: Zaibatsu's during the Meiji Restoration period He was among the pioneers of Japan's rapid industrialization and modernization processes. This process played a key role in the country's transformation from an agriculture-oriented economy to an industry-based economy.
Investment and R&D: Zaibatsu formations were pioneers in technological innovations and R&D investments. This played an important role in Japan's progress towards becoming a global technology leader.
Employment and Education: Zaibatsu contributed to economic stability by providing great employment opportunities. They also created corporate training programs to provide education and training opportunities to their employees.
International Trade and Investment: Zaibatsu were important players in Japan's international trade and investment. This helped Japan take a larger role in global markets and expand its foreign economic relations.
Integrated Production: Zaibatsu effectively managed their supply chains by keeping different stages of production under their control. This vertical integration increased production efficiency.
Finance and Banking: The Zaibatsu owned many large banks, which played a critical role in financing the Japanese economy. These banks provided financing for Zaibatsu companies as well as other businesses.
Economic Stability and Growth: Zaibatsu's contributions to the economic structure promoted both economic stability and long-term growth.
Cultural and Social Impact: In addition to their economic impact, the Zaibatsu also had a profound impact on Japanese society. Zaibatsu Families did significant charitable work supporting cultural and social events.
Transition from Zaibatsu to Keiretsu
The transformation of Zaibatsu Groups into Keiretsu took place in a period after World War II. . If we explain this process in order;
The first stage was with the collapse of the Zaibatsu;
Disbandment of the Zaibatsu: From the perspective of the United States, the Zaibatsu were Japan's key force in World War II. For this reason, the disbanding of these troops immediately after the war was among the first priorities.
Prohibition of Holding Companies: Due to the "logic of rallying around a holding company", which is the main feature of Zaibatsu, the US occupation forces banned holding structures.
Enactment of Anti-Monopoly Laws:It was not enough to ban holdings, an Anti-Monopoly law was also passed so that there would be no circumvention.
After the Zaibatsu collapsed and the focus on this issue lost its former strength, Japanese companies rolled up their sleeves for a new organization and a more democratic and corporate structure. Keiretsu gathered around the system.
Keiretsu s made Japan a leading figure in the world economy again in this period. It helped him become stronger.
Note: My article about Keiretsuis below You can read it from the link;