Final answer:
The middle ground approach between few suppliers and vertical integration adopted by Japanese manufacturers is known as the keiretsu system. This network of aligned companies supports stable supply chains and quality control, contributing to the success of Japan's manufacturing sector, especially in the automotive industry.
Step-by-step explanation:
Japanese manufacturers often find a middle ground between relying on a few suppliers and engaging in vertical integration. This approach is known as the keiretsu system. In a keiretsu, manufacturers form alliances with suppliers and other related companies to secure a reliable flow of parts and materials without fully owning the suppliers. This helps maintain quality control and reduces risk, as suppliers are part of a close-knit network that often includes cross-shareholdings.
The keiretsu system emerged post-World War II, as Japanese companies sought to rebuild their economy. It aided not only in securing materials and components but also in creating long-term, stable relationships that have been crucial to the success of Japanese manufacturing, exemplified by the strength of the automotive industry with companies like Toyota and Honda.
This middle ground approach allowed Japan to take advantage of the efficiencies of a close supplier network while avoiding the capital-intensive route of vertical integration, striking a balance between control and flexibility.