Koito

Question 1Many economists argue that the keiretsu governing body has been a formidable balk to theentry of Western companies into the Japanese market. However, the absence of liberal marketcompetition may rule in Japanese firms from implementing more cost-effective sourcingstrategies at the global standard.Furthermore, it is a lot argued that the keiretsu system has been partly responsible for thedecade-long recession: while there was need for quick changes, the negative features of thekeiretsu form of governance hold the economic slump. The interdependence of suppliers, unproductive cost management and top-down decision making based uponcontinuity and consensus all contributed to the decade-long recession.We will immediately discuss the corporate governance issues that may arise, seen from differentperspectives.a)

From the perspective of financiers.
Financiers atomic number 18 always looking for the best app belment possibilities. The keiretsu system mint make it ambitious for (individual) financiers to invest in the best possible option. Thisis because of the fact that a keiretsu will not allow foreign or extraterrestrial companies into theirsystem.



On the other hand, when the leading connection of the keiretsu needs money,financiers privy more or less be obliged to invest: the money is invested in a bad projectand possible get are lost (Kawai, 2009).b)

From the perspective of owners.
One of the key features of the keiretsu system is member cross-ownership. These ownersare the control-oriented owners. Their primary concerns are the relationships with thebusinesses in which they have stocks. So their objective is to maximize the relationshipvalues and the economic performance of their keiretsu as a whole, not maximizing themarket value of a single company: these cross holding arrangements also lead toambiguity on whose interests are really being represented.c)

From the perspective of suppliers
The major issue for suppliers is that they can be exploited by their Keiretsu...If you want to get a full essay, order it on our website: Orderessay



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