Journal Article

Power dependence, diversification strategy, and performance in keiretsu member firms

Hoskisson, Robert E., Wan, William P., Kim, Hicheon

2004

Overview

Conceptualizing the keiretsu as a power-dependence system, we propose that benefits accruing from keiretsu affiliation differ across member firms, depending on their power in (or dependence on) the keiretsu. By integrating power with governance and internal market perspectives on group affiliation, we develop and find general support for the hypotheses that powerful keiretsu member firms are able to place more emphasis on growth in pursuing product and international diversification, whereas less powerful keiretsu member firms are subject to strong monitoring and emphasize profitability. These findings provide support to the study's proposition that power-dependence relationships in a keiretsu influence member firms' appropriation of group affiliation benefits in pursuing diversification strategies.

• Publisher: John Wiley & Sons, Ltd,John Wiley and Sons,Wiley Periodicals Inc
• Subject: Advantages / Alliances / Appropriation / Banks / business groups / Business structures / Commercial banks / Companies / Corporate governance / Corporate strategies / Countries / Diversification / Emerging markets / Enterprises / Financial institutions / Geographic regions / Governance / Internal market / International / international diversification strategy / Keiretsu / Management / Membership / Organizational effectiveness / Power / power dependence / Presidents / Product diversification / product diversification strategy / Profitability / Profitable firms / Sales growth / Strategic planning / Studies / Value creation