Keiretsu
(business association)

The keiretsu of Japan arose out of the prewar zaibatsu but differed from the zaibatsu in essential ways. The zaibatsu were family-owned conglomerate businesses that were promoted by the Meiji government of Japan. When the government ran out of funds to carry out major projects for the development of Japan the government commissioned private businesses, often one which had business dealings with the court, to carry out those projects. The businesses received in return monopolies and special privileges from the government.

The zaibatsu were strong supporters of the militaristic government that gained control of Japan. The Allied Occupation broke up the zaibatsu to punish their leadership but also the Occupation wanted to promote democracy and saw the zaibatsu as anti-democratic concentrations of power. Initially firms such as Matsui were prohibited from operating. However the Cold War dictated the necessity of Japan having a strong, vigorish economy. The zaibatsu companies were allowed to re-form and utilize their old names. For middle management in those companies the process was beneficial; they moved up in the management heirarchy.

The general structure of the keiretsu is an association of companies formed around a bank. They cooperate with each other and own shares of each others stock.

The Big Six Horizontal Keiretsu