The keiretsu, a system of organizations with integrated and interlocking business relationships and joint shareholdings, is a form of networked organization. As an affiliation of enterprises, the keiretsu plays an important role in the growth of automotive manufacturing in Japan. For example, Asanuma and Kikutani (1997) conducted an empirical study of supply chain relationships in the automotive parts industry and electric machine manufacturing and found the longstanding transactional relationships among the keiretsu as a crucial factor for acquiring economic rationality. From a managerial standpoint, Imai and Kaneko (1988) pointed out that organizational structures evolved from the traditional vertical hierarchy to modern horizontal structures through the support and development of information technology in the keiretsu. They also predicted that the “network organization” form will be a most important type of enterprise in the future. According to Lincoln and Gerlach (2004), “the most distinctive form of network organization in Japan—and the most critical to understanding its economy—is the clusters of industrial, commercial, and financial corporations known as the keiretsu ”(p. 15).
Key Terms in this Chapter
Cluster: Clusters are geographic concentrations of interconnected companies, specialised suppliers, service providers, firms in related industries, and associated institutions in particular fields that compete but also cooperate.
Virtual Organisation: The term “virtual organization” is increasingly used to describe a new organizational form including a network of companies or other organisations.
Strategic Themes: Strategic themes describe the strategy of an organisation in a concise way. They describe what management believes must be done to succeed and achieve the desired outcomes.
Balanced Scorecard: The Balanced Scorecard approach is a framework for the communication and implementation of the strategy. The Balanced Scorecard approach translates an organisation’s strategy into tangible objectives and measures.
Strategic Management: Strategic management is a matter of bridge building between the perceived present situation and the desired future situation. Strategy implies the movement of an organisation from its present position, described by the mission, to a desirable but uncertain future position, described by the vision.
Higher Education Institution: Higher education institutions include traditional universities and professionally oriented institutions, which are called universities of applied sciences or polytechnics.
Strategic Planning: Strategic planning involves taking a view of the whole organisation and planning for the long term with clearly articulated values, mission, vision and strategic choices.