display | more...


The zaibatsu* were a small group of financial, industrial and commercial conglomerates that existed in Japan from the Meiji period up to the end of World War II. They originated as family-controlled enterprises that grew around financial organizations, such as money exchanges, into vertically and horizontally integrated groups of companies that operated as cartels or monopolies and accounted for about 1/4 to 1/3 of all the national wealth of Japan in the period just prior to WWII.

The distinctive character of the zaibatsu comes from their being family-governed organizations and having been founded, in most cases, by members of the samurai class. As family-governed organizations ruled by a patriarch, the zaibatsu had a very strong mentality of exclusiveness, or us-versus-them thinking, from the very beginning. To understand the strength of this mentality, it is necessary to understand that the world view of these families had been influenced by centuries of imperial and feudal society. The other character-shaping fact was that the philosophy of the founders was dominated by bushido, or the supposed code of the samurai. These formative factors resulted in organizations that were based on totally authoritarian leadership, paternalism, ethics of extreme loyalty and personal sacrifice, and an extreme sense of identity marked by clear delineation between in-group and out-group.

The success of the zaibatsu is primarily the result of close association with the governments under which they operated and the fact that most of them controlled their own source of captital by owning banks. Although formed shortly after the Meiji Restoration, under favor of the new government, the power of the zaibatsu grew fastest and peaked during WWI, in which they financed imperialistic ventures in Korea and Taiwan. They profited hugely from Japan's wars. The military grew wary of them and tried unsuccessfully to reduce their power between WWI and WWII.

The big four zaibatsu were Mitsui, Mitsubishi, Sumitomo, and Yasuda, but there were several others. The Mitsui family had roots going further back into history than the others, and had close ties with the Tokugawa shogunate. Mitsui Hachirobei Takatoshi first opened shop in 1573, selling premium quality kimono. See detailed histories of zaibatsu here.

The zaibatsu were dismantled by the Allied Occupation Forces (actually, the Supreme Commander for the Allied Powers (SCAP), General Douglas MacArthur) after WWII. The holding companies that were the glue of the organizations were dissolved and large holding companies were forbidden by law. Top zaibatsu leadership was removed, stock was sold to the public (much of it to the government), and assets were transferred to the Holding Company Liquidation Commission.

The post-war legacy of the zaibatsu is complex and interesting, but the short story is that the efforts of SCAP began failing almost before the ink dried. That was partly because of a shift in priorities of SCAP in response to social and economic problems that arose after the war, but mostly because of how entrenched the idea of the zaibatsu is in Japanese social and business thought. It has never been seen as anything other than a highly successful business concept, and the former zaibatsu continue on a slow but inexorable process of self-healing, even today. In the 1950s and 1960s, the zaibatsu form re-appeared in the form of keiretsu or kigyo shudan (企業集団, enterprise groups), although sans family control. In 1998, the Japanese Diet finally repealed the 52 year old ban on holding companies, and the Mitsui Group was first in line to contemplate forming such a holding company (from the Japan Times, Jan. 2, 1998).

The most salient feature, aside from the economic aspects of the neo-zaibatsu, is how deeply imbued is the idealized traditional ethic of the samurai and paternalism (Confucian parent-child relationship) in the thinking of modern keiretsu management. Finally, it should be noted that most of the major Japanese companies that have thrived and came to the fore in Japanese economics in recent decades, the house-hold-name companies like Sony, Toyota, Honda, Suzuki, Shiseido (cosmetics), Sharp, Fuji Film, Canon, and Seiko among others, are not affiliated with the former zaibatsu. The traditional zaibatsu style and connections have not proven successful in the newer technology markets where fluidity, creativity and adaptivity are survival traits.

*Zaibatsu is a Japanese term of two characters: zai, meaning finance or wealth; and batsu, meaning clique or clan.

Some sources:

  • van Wolferen, Enigma of Japanese Power
  • Alletzhauser, The House of Nomura
  • Young, The Sogo Shosha: Japan's Multinational Trading Companies
  • Nakane and Oishi, Eds., Tokugawa Japan-The Social and Economic Antecedents of Modern Japan, Translation Edited by C. Totman
  • Pyle, The Making of Modern Japan
  • Burks, Japan-Profile of a Postindustrial Power

Log in or register to write something here or to contact authors.