The genealogical structure of Japanese firms: Parent-subsidiary relationships

Abstract

We analyze the genealogical structure of large Japanese firms, with particular emphasis on the relationship between parent firms and spinoff subsidiaries. The wide use of spinoffs and subsidiaries in Japan provides for flexible organizational mutations that appear to facilitate increased competitiveness and offer the opportunity to obtain benefits through a deliberate separation of core competencies. We discuss a conceptual framework for the spinoff arrangement, the results of an exploratory empirical analysis of the relationship between parent and subsidiary organizations, and implications of the use of this organizational structure. We suggest the importance of a consideration of the genealogical aspects of large Japanese firms in strategy research.