Should US Companies Establish Keiretsus?

Economic success in today's business environment requires a clearly focused strategy that builds on the distinctive competencies of the organization. Empirical studies over the past 20 years have confirmed that profitability decreases as the degree of diversification increases. Having followed a strategy of growth through conglomerate diversification for over two decades, many organizations have found that they are no longer flexible enough or innovative enough to meet the challenges of global competition. In response, they are restructuring to regain strategic control.