zaibatsu

Zaibatsu (財閥) are large, family-controlled industrial and financial conglomerates that dominated Japan's economy from the late 19th century through World War II. The term translates roughly as "financial cliques" or "financial conglomerates." They arose during the Meiji period as Japan industrialized, combining private capital, merchant houses, and banks into integrated enterprises that could coordinate production, financing, and distribution across sectors.

Although not a single corporate structure, zaibatsu were built around a core family leadership and a holding-company system that controlled a network of subsidiaries. Leading groups included Mitsui, Mitsubishi, Sumitomo, and Yasuda. Each zaibatsu operated across multiple industries—mining, steel, shipbuilding, textiles, chemicals—as well as banking, trading, and utilities. Control was maintained through interlocking shareholdings, affiliated companies, and associated banks, enabling centralized decision-making and long-term investment.

World War II era and Allied occupation led to dissolution reforms. In 1946–1948, authorities dissolved the zaibatsu by breaking up holding companies, banning cross-ownership, and distributing assets to create independently run firms. The reforms diminished direct family control but did not erase the organizational ethos; many former zaibatsu reorganizations re-emerged as keiretsu—loose intermarket alliances among manufacturers, traders, and banks—formed around cross-shareholding and bank relationships. The zaibatsu legacy shaped Japan's postwar industrial structure, contributing to how corporate groups and banks interact in the modern economy.