In the Japanese keiretsu system, contract enforcement between firms and suppliers is less problematic because of ________.
A) overlapping judicial systems
B) cross-ownership of shares
C) horizontal integration
D) value chains

Question

Quizplus · Accepted Answer

In the Japanese keiretsu system, cross-ownership of shares among firms and their suppliers fosters mutual trust and commitment, reducing the need for external contract enforcement mechanisms. This interconnectedness through shareholding helps ensure that all parties have a vested interest in each other's success, thereby minimizing disputes and the need for legal intervention.

In the Japanese Keiretsu System, Contract Enforcement Between Firms and Suppliers