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

Research output: Journal Publications and Reviews (RGC: 21, 22, 62)21_Publication in refereed journal

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Original languageEnglish
Pages (from-to)613-636
Journal / PublicationStrategic Management Journal
Issue number7
Publication statusPublished - Jul 2004
Externally publishedYes


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 powerdependence relationships in a keiretsu influence member firms' appropriation of group affiliation benefits in pursuing diversification strategies. Copyright © 2004 John Wiley & Sons, Ltd.

Research Area(s)

  • Business groups, Corporate governance, International diversification strategy, Keiretsu, Power dependence, Product diversification strategy