Corporate Group Strategy of Japanese Manufacturers in an Age of Global Competition : How did globalization in accounting standards effect the management style of Japanese Manufacturers?(The Commemorative Issue on the Retirement of Prof. Masayoshi KAMEI)

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The purpose of this paper is to discuss how the corporate groups of manufacturers in Japan shifted their strategy through the Japanese Accounting Big Bang. The paper preliminarily explains the pattern of business ties in Japan and overviews their history. There existed a kind of conglomerate called zaibatsu and there exist three types of business ties in Japanese economic society: corporate group, business complex and keiretsu. This paper concentrates on the corporate group. A corporate group is a pattern of business ties in which a core (parent) company and its subsidiaries form a business group. Japanese established manufacturers actually extended their businesses as corporate groups. This paper first explains how they succeeded internationally as a corporate group. They produced and sold the goods efficiently and effectively with the advantage of intra-group transactions, and they accumulated profits on the core companies' accounts. Afterwards it discusses the effect of globalization and the Japanese Accounting Big Bang on the management of corporate groups. The globalization of business competition entails the constant flow of new entries into established markets, the speeding-up of innovations and shortening of product-lifecycles. These effects put pressure on the Japanese manufacturers to change their strategies.