In chapter 5 we found that links between managers' ideologies and corporate governance views on the one hand, and employment and industrial relations on the other, were rather loose. This picture is partial, however, as we have not yet examined an important area of management which is related both to corporate governance and to employment. This extends beyond the boundaries of individual companies, to encompass enterprise groups.

Through extending our horizons we will see that community companies have been sustained by the evolution of quasi internal labour markets, encompassing companies within the enterprise group. Historically these developed around the practices of secondment (shukko) and transfer (tenseki). The extent of these practices differs according to industry; two extremes are the ‘city bank pattern’ and the ‘department store pattern’. In the former, secondments and transfers begin at age 47–48, and almost no one reaches 60 at the city banks. In major department stores, by contrast, there are relatively few secondments and transfers, and most regular employees stay until they are 60.

Recent changes to financial disclosure requirements, however, have triggered a growth in consolidated management, which is linked to the increasing emphasis on capital efficiency and profitability on a group-wide basis. We explore this development and its implications through the JRK management strategy survey of corporate planning heads, carried out in February–March 1999.

Consolidated management will potentially have a major impact on the evolution – or dissolution – of quasi internal labour markets.