Mabuchi Motor, Study Case

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International Human Resources

Enterprise Background

Mabuchi Motor Company is the world's number one manufacturer of small electric motors. The company holds 70% of the market for motors used with automotive, toys, computer, industry. All started in 1946 when Kenichi Mabuchi (now the company's honorary chairman) founded "Kansai Rika Kenkyusho," a scientific research institute. He created the world's first high performance horseshoe-shaped magnetic motor in 1947. On January 18, 1954, Kansai Rika Kenkyusho established Tokyo Science Industrial Co., Ltd. for the production of small electric motors for toys and scientific apparatus. By the dawn of the 1970s, Mabuchi became one of the world's leading producers of original equipment motors for consumer electronics, toys and model aircraft. In the early 1980s Mabuchi entered both the VCR and battery-operated power tool market. The development of a heavy-duty printer motor in 1985 led to Mabuchi's entry into the office equipment market. The Mabuchi Technology Center was created in 1992 for in-depth research and development of small electric motors. Operations in Europe and China began in 1993.

1. Multinational enterprises use expatriates as a control mechanism, to transfer skills and to develop managers. Why the decline in the numbers of Japanese expatriates?

The decline of Japanese expatriates became due to several reasons: a) To maximize its competitiveness by minimizing its cost the production was shift outside of Japan. The production capability had been shifted outside of Japan to take advantage of the low cost labor, like in Hong Kong in 1964, because the labor rates were low.

Furthermore the cost to maintain a Japanese expatriate (salary, accommodation ...) was 10 to 20 times that of local manager. Interfering with the strategies of cost minimization and continued aggressive expansion.

b) Several numbers of Japanese subsidiaries, to continue its strategy of production expansion, Mabuchi established new factory in Taiwan, in China and employed local workers.

c) The Performance advantages associated with using local managers, were that they share the same language and the same culture that the employee. Therefore it was easier for local managers to run a team whose understand the problems.

d) The Local government had preferences for local managers; the regulations of work were facilitating the employ of local managers. Even if the skills of the local worker were inferior to the Japanese employees.

e) Mabuchi decided to increase supply of qualified local managers to develop corporate training programs for foreign personnel: NIHAO (New Integrated Headquarters and Overseas Operation) to improve the management competence of local managers.

f) It was easier to manage from a distance. In beginning in the 1990s, to shift many of the responsibilities back to the individual subsidiaries. And encourage subsidiary managers to communicate directly with their counterpart in other subsidiaries. With the goal to reduce duplication of effort and efficiency management control. Also thanks to the Establishment of the COMPASS program, a computer based management information system to improve and reduce the time of transfer of the information between department and subsidiaries. To conduce the decrease of need of Japanese managers in the foreign subsidiaries. 2. What are the key elements of Mabuchi’s strategy and structure? What are its.

Management philosophy, Respect of the hierarchy
Mabuchi had the assumption that all the people are the same in what they need and want. They have a common longing for security, peace, ease of living and freedom. And that the work than they can get in Mabuchi Company can contribute of these desires. As well is in the culture of the Japan Company to encourage employees to take on the organization’s goal as their own. Also like all the Japan Company Mabuchi had the respect of the hierarchy and...
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