Japan and China having to rule over the enterprises under family and government ties, slowly changed in its ownership structures and strategies in tackling the modern world. Constant improvement for both japan and china in product and services were much required. This report will be covering on the areas of Ownership Structure, Market Relations and Management of Japan and China Enterprise and doing a comparison to see how enterprises move towards economic growth and enterprise stability.
Zaibatsu conglomerates such as Mitsui, Mitsubishi, Sumitomo and Yasuda dominated the Japanese economy by specializing and operating in different sectors. ...view middle of the document...
However the new Zaibatsu did not last long in the economy and soon, Keiretsu emerged and started to change the economy (Chapter 1). Keiretsu do not hold large individual stakes unlike Zaibatsu but rather, keiretsu member, dominates the overall ownership structure (Jean McGuire, 1999).
China’s economy grew from only State Owned Enterprises (SOEs) into diversification of Privately Owned Enterprises (PIE) and Foreign Invested Enterprises (FIE) to aid in disparate economy and growth, which acts in configuration of different features (Redding & Witt, 2009)
State owned enterprises (SOEs), intended to be the backbone for china economy and are known to be both capital and labour intensive, resulted in poor output in 1998 due to lack of supervision. Many had negative balance sheet, poor skills sets and obsolete procedures contributed to the failure of the SOEs (Huang, Linfen, 2003). Government began to scrutinize the SOEs as private enterprises were growing exponentially (Ho, Daniel 2012). Hence, SOEs were required to upgrade skills and match with other private businesses otherwise to be privatized. With new management, the state sector share in the economy is estimated to be 15% (Redding & Witt, 2009).
Foreign-Invested Enterprises (FIEs) become important element in china economy where example of manufacturing FIE has accounted for 47 percent of manufacturing exports and 24 percent of manufacturing sales whereas electronic FIE accounting for 95 percent of china exports. By definition on FIEs, domestic assets or enterprises are ‘Foreign Controlled’ because of the investments that are channeled into the business. The lasting acquisitions are of investors’ interest, having the effective influence or power in the management of the enterprise (Yasheng Huang, 1999).
FIEs have both directly and indirectly nurtured and groomed the economy. Firstly, brining both capital and new technologies to directly increase innovation and growth. Secondly, with the new technologies, it helps other business to grow through training and imitating the product or services. Thirdly, because of the training, this allows transferable of knowledge, as FIE employees are highly skilled. Lastly, vertical linkages and suppliers of FIEs can be established to domestic enterprises by learning from FIEs (Jian Li, Dylan Sutherland – 2014)
Private Owned Enterprises (POEs) consisting of large number of small and medium enterprises serving the local market or participating in network capitalism of the world (Redding & Witt, 2009). Although number of SOEs had been converted into POEs, majorities were formed through allowing new enterprises to decide on the new ownership structure. (Li, Shaomin 2004).
Both Japan and China enterprises, Zaibatsu and SOEs were run and managed by families and government to aid to grow the domestic market and both diversifying the sectors on which required more growth. However ever since the dissolution of Zaibatsu and rise of...