In my investigation of the South Korean chaebol and the Japanese keiretsu, I have argued for an interactive approach to the understanding of the rise and the current reform of these two different capitalist conglomerate organizations in two very similar countries. Instead of the deterministic explanations of transaction cost economics, network (culture) theory, and power theory, I argued that the rise of different capitalist organizations in South Korea and Japan should be conceived as a concrete process of social relationships constituted by state and business actors. Therefore, the analysis should focus on observable reality, rather than on the logical refinement of arbitrary assumptions.