Transformation of Matsushita Electric Industrial Co., Ltd 2005

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Problem: Mr. Nakamura must decide on what action plans to pursue for the rest of the year (i.e., the "Value Creation 21" and the 5 emergency measures) Learning from Morishita's experiences, Mr. Nakamura should consider the following Critical Factors: 1.Full cooperation of senior management in the implementation of the plan. Mr. Nakamura's plan will fail if he never got the full cooperation of the whole management team of MEI. To get the cooperation, he must be able to get management to fully understand and believe in the principles of his plans, as the senior management team will serve as the implementers of the plan. They will also be the one who will drive the employees to the direction that they want to go. With management being clear with one goal prevents confusion among employees. This would also avoid any sabotages or complacency out of conforming attitudes from some management. Mr. Morishita was faced by many opposing parties especially from the powerful division managers. This led him to give up his plan because he couldn't push it through, as the implementers won't implement. I feel that Mr. Otsubo, who was responsible in revamping the current manufacturing system in Kadoma, sabotaged the whole process. I believe Mr. Otsubo made sure that the physical manufacturing system was changed as efficiently as he can so that nothing can be said about him not following nor is his performance affected because it was done very fast and efficiently. However, I think he intentionally ignored the need for staff training with the change of the system to prove that the plan will fail. It is impossible for Mr. Otsubo, who did an "all out effort to implement the change" and is supposed to be "highly capable and experienced factory manager", would have overlooked such a basic task that should be done. 2.Employee morale will play a key role in the success of the implementation of Mr. Nakamura's plans. An important aspect for employee morale is for them to feel that they are really part of the company, besides wages. This is because, in the Japanese business context, the Japanese people see the companies that they work for as their second family and home. This is why all employees pretty much stay in MEI and in the division that they started with. During Mr. Matsushita's era, all employees were happy and believed in his philosophy. Under Mr. Morishita's management, the employees felt "confused" because they didn't know what work they should do. Even though one can say that Mr. Morishita was facing a lot more challenges than Mr. Matsushita, Mr. Matsushita handled the problems while keeping the drive in the employees (e.g., cutting production down to half, with employees that were redundant were sent out to sell the products). 3.Impact on Brand Equity. Brand Equity refers to the value of perception of the brand to consumers. It represents the identity of both the company and the products it produces; and is important for MEI as it produces consumer products. Its brand equity has been hurt during the past years and it is vital for the plans of Mr. Nakamura to improve on or at least not to damage it further. Already, there is skepticism on "Nakamura's ability to implement his ambitious plans" and is being compared to Y. Morishita. This is bad publicity that will hurt the Brand if it becomes true. Option 1: Mr. Nakamura drops Value Creation 21 by just consolidating the changes that have been implemented and focus on implementing the 5 emergency measures for the rest of the fiscal year. The good side of this option is that it's fast (has immediate results) and action-oriented. The 5 measures plan immediately addresses, if successful, the potential problem that will be caused by the failed change in the manufacturing system by increased sales revenues and reduced costs to maximize the net profits. However, the bad side of this option is that by giving up Value Creation 21 plan, Mr. Nakamura admits defeat to the...
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