The engine of Japanese economic growth has been private initiative and enterprise, together with strong support and guidance from the government and from labor.
Corporations range from large to small, but the favored type of organization is the joint-stock company, with directors, auditors, and yearly stockholders' meetings.
Together with agricultural land reform and the start of the labor movement, these measures helped introduce a degree of competition into markets that had not previously existed.
While market forces determined the course of the vast majority of enterprise activities, adjustments in the allocation of bank credit and the formation of cartels favored the reemergence of conglomerate groupings (keiretsu).
In contrast to the dualism of the prewar era--featuring a giant gap between modern, large enterprises and the smaller, traditional firms--the postwar system is more graduated.
The average Japanese business executive is well aware of the firms that lead production and sales in each industry and is sensitive to minute differentiations of rank among the many corporations.
Mitsui, Mitsubishi, and Sumitomo are former zaibatsu, while other groupings were formed around the Fuji-Sankei, Sanwa, and Dai-ichi Kangyo banking giants.
In the late 1980s, subcontracting firms accounted for more than 60 percent of Japan's 6 million small and medium-sized enterprises (those having fewer than 300 employees).
In the 1970s and 1980s, a number of independent middle-sized firms-- especially in the services and retail trade--were busy catering to increasingly diversified and specialized markets.
The law was changed in 1981 to control this kind of excess, to enhance the power of auditors, and to reduce the number of stockholders in the employ of management.