According to the footnotes on the initial page of this case study, it was written by Nancy Rothbard of the Harvard Business School for the purpose of discussion rather than for analyzing the handling of an administrative problem. The format is generalized and it gives a broad spectrum of information from which a student can extract pieces relevant to his or her area of study for a specific class. Since this case analysis is for a class in Strategic Cost Management, the main area of interest for this paper will be in the area of “cost management”. However, given the broad spectrum of information, the analysis is not limited only to cost management facts and issues, but also includes information that that is relative to other management topics. Rather than looking for a group of existing administrative problems, the focus is strategic in nature and addresses issues that could be problems in the future based on the status of the company at the time the case was written. The analysis includes information for the time period covered in the case study with a few references to Kyocera in the period of time after this case was written and up to the present.
Kyocera Corporation was founded in Japan in 1959 as the Kyoto Ceramic Company., Ltd. by Dr. Kazuo Inamori and seven colleagues. With Dr.Inamori providing strategic direction, the company grew from a small niche market player to an international conglomerate in a relatively short period of time. Within 30 years Kyocera was a world-class leader in their core product (electronics packaging) market. In addition, through mergers and creation of new business units Kyocera was able to successfully diversify into other areas of technical expertise. Seven product groups accounted for ninety-nine percent of Kyocera Corporation’s sales of approximately $2.7 billion in 1990. (The additional 1% of sales was simply labeled “other” in the case study documentation.) The products are divided among 80 companies in different geographical locations. The firm differentiated itself from competitors by providing world-class customer service. After establishing itself in a core product line and market, the firm was in a position to take the risk of entering additional markets, with additional products added to the mix. Kyocera had a unique management system based on work cells called “amoebas” and a somewhat unique corporate philosophy and culture based on Dr. Inamori’s personal beliefs. The leaders of the company were very dedicated to the corporate philosophy and placed high value on making sure all newcomers were indoctrinated and accepted the corporate culture as well. The management philosophy, international business parameters, diversified product lines, corporate culture, and continued growth all have their challenges for the company. Some of these challenges are in the area of costing. Close examination reveals that there are both strengths and weaknesses in the way these business characteristics are handled by Kyocera.
• Dr. Kazuo Inamori – Founder and architect of the firm’s business strategy. Dr. Inamori was a powerful force in the development and growth of the corporation. Without his leadership the company would likely not have grown as fast or been as diversified as it became by its thirtieth (30th) year in existence. • Seven unnamed colleagues of Dr. Inamori who founded the company with him. – They provided upfront capital, labor, and personal sacrifice to get the company started and on solid ground. Although these men had vision, they were no match for Dr. Inamori’s foresight, enthusiasm, and philosophical predisposition for success. • Kinju Anjo (Vice Chairman) and Kensuke Itoh (Kyocera President) who stood in for Dr. Inamori when he could not be present at meetings....