The call for organizational reform that is leading many Japanese companies and even government agencies to struggle to streamline operations is finally reaching the nation's business groups.

Although the idea of consolidating Japan's business organizations is not new, efforts toward that end are finally under way, spearheaded by Hiroshi Okuda, who became chairman of the Japan Federation of Employers' Association (Nikkeiren) last year. He is pursuing a consolidation of his group and the Japan Federation of Economic Organizations (Keidanren).

Earlier this week, Nikkeiren set up a 10-strong team to collect opinions from member organizations on the merger proposal by summer. The subject is to be further discussed at Nikkeiren's annual summer seminar.

"As member companies of business organizations are making strenuous efforts to rationalize their management, it is natural that business organizations seek to raise their efficiency," Okuda told a general meeting of Nikkeiren on Thursday.

To that end, the project team is aiming to review the activities of Nikkeiren and the business circle as a whole. The consolidation with Keidanren should be examined as one option to improve the efficiency of business organizations, Okuda said.

Nikkeiren consists of 47 regional employers' associations and 60 trade-based groups, while Keidanren, which is considered Japan's largest and most powerful business lobby, consists of more than 1,200 member firms.

The current merger proposal came as no surprise to the business community; the idea of uniting the country's four major business organizations -- Nikkeiren, Keidanren, the Japan Association of Corporate Executives (Keizai Doyukai) and the Japan Chamber of Commerce and Industry -- has often been raised in the past.

As to why the consolidation plan has recently gained momentum, observers point to the growing overlap of activities due to economic and social changes since the groups' establishment more than 50 years ago.

Nikkeiren was founded in 1948 to reflect the voice of management at a time when the country was experiencing a series of strikes as the influence of the labor movement increased.

Nikkeiren conducts research and makes policy proposals on labor-management issues and is best known for setting guidelines for wage hikes and other working conditions at annual springtime "shunto" negotiations with labor unions.

But as Japanese companies have come to adopt a variety of employment and wage systems, the significance of setting such uniform guidelines now appears to be diminishing.

Keidanren, meanwhile, stopped its longtime practice of coordinating political donations among member companies and associations in 1994, thereby weakening its influence over politicians and the government.

Since then, Keidanren has come to place more emphasis on policy proposals, including those covering labor-management issues -- Nikkeiren's territory.

The burden of providing business groups with human resources and financial support seems to be weighing on some member companies in this era of high competition and low economic growth.

Many major corporations belong to both Keidanren and Nikkeiren. Although membership fees are not disclosed, they are believed to be quite high.

In addition to supporting the Tokyo activities of the business groups, a Keidanren official pointed out, large-scale corporations are also often requested to support regional activities through their local offices and factories.

If the proposed Keidanren-Nikkeiren merger is realized, it may serve as a catalyst to facilitate consolidation with Keizai Doyukai and the Japan Chamber of Commerce and Industry.

"What we are talking about at present is the consolidation of Keidanren and Nikkeiren, but we are certainly looking at the future consolidation of the four major 'zaikai' (business) groups," a senior Nikkeiren leader said.

The two-party plan, however, is still uncertain, as Nikkeiren's regional associations have not indicated their position on the plan.

Keidanren, meanwhile, appears to be taking a wait-and-see attitude.

Some say it will take time to create consensus within Nikkeiren itself, pointing out that discussions on how to make a consolidation effective have yet to begin.

Said a Nikkeiren spokesman, "We still have to examine the advantages and disadvantages."