Origins of the Zaibatsu Conglomerates: Japanese zaibatsu conglomerates in the Meiji Period 1868-1912

Abstract

The Japanese zaibatsu conglomerates dominated Japan´s economy and industries from the Meiji era (1868-1912) until the mid-20th century following Japan´s surrender after World War II. These groups grew fast from feudal businesses and monopolies during the Meiji period, becoming leading economic forces and played a key role in the industrialization and modernization of Japan following the end of the feudal Edo period (1603-1868). What caused and defined the formation of the zaibatsu? To answer this central question this thesis will examine the early history of the zaibatsu, including the industries they operated in, business practices, corporate structure and political connections in the Meiji period. The two biggest zaibatsu conglomerates, Mitsui and Mitsubishi, will serve as the main examples throughout this thesis. Both groups had immense effect on Japan´s economy during the Meiji period. Decentralization and balancing authority among themselves and their subsidiary groups was a significant problem for Mitsubishi and especially Mitsui, defining their expansions and corporate structure. Both groups adapted monopolistic and exploitative tendencies influenced by 19th century Western business practices, e.g., mistreatment of workers, exhaustion of resources and misuse of political connections. Like many zaibatsu, Mitsui and Mitsubishi played the role of an agent for the Meiji government, fulfilling the political and economic ambitions and expanding through government contracts. The effect and influence of the zaibatsu conglomerates can still be observed in the Japanese business world with former zaibatsu groups like Mitsui and Mitsubishi operating past the 20th century and into the new millennium whilst developing into massive international conglomerates.