Different forms of business organisation
The Japanese organisation is characterised by many large enterprises; these differ from their UK and US counterparts in that there is concentration on a limited range of business activities and homogeneity of skills and resources. Much of the work though is specialised and there is much subcontracting out. Much has been made of the importance of Kiraetsu as a way of maintaining control over operations.
In contrast with Anglo‐Saxon firms, Japanese firms attempt to maintain authority hierarchy over their suppliers by working with them to ensure constant improvements in productivity and quality, as well by insisting that any cost savings are passed on to the large enterprise. Anglo‐Saxon firms, on the other hand, attempted to maintain control over their supplier by engaging in horizontal and vertical integration. In some ways, a number of Anglo‐Saxon firms of late have moved towards outsourcing. The advantages of this include the fact that there is more competition from a wider source of supply and this can lead to lower prices. There is also the advantage in that many large Anglo‐ Saxon firms that have grown from vertical integration have suffered from the undesirable effects of increased bureaucracy and diseconomies of scale. The privatisation programme and the encouragement of small business by many European governments have forced many Anglo‐Saxon firms to question the benefits of acquiring suppliers through the integration process.