Introduction

This introduction presents an overview of the key concepts discussed in the subsequent chapters of this book. The book argues that the state in South Korea and Japan acted as Mafioso throughout the developmental periods. It provides a detailed description of the chaebol structure in South Korea and its Japanese counterpart, the keiretsu structure. The book demonstrates the existence of qualitatively distinct business organizations in South Korea and Japan. It outlines Oliver Williamson’s transaction cost economics. The book discusses why network and culture theory claimed to explain the Japanese variation of business organizations that transaction cost economics failed to. It highlights the main argument that power theory, specifically resource dependence theory, advanced. Since resource dependence theory contends that power is the only incentive for conglomerization and hierarchy, it is the only significant alternative to transaction cost economics. The book explains new facts about organizational structure and change.