Professional Documents
Culture Documents
Final
Final
Final
VS
Presented by;
Gohar Fatima
Sadia Khan
Rabiya Khan
Jilal Janjua
Philips vs Matsushita
Goals
• Profitability.
• Defining relationship between PDs and Nos and assign
responsibility.
• Cost cutting.
Actions Taken
• Closure of inefficient local plants and focus on converting the
best production plants into International production centers
(IPCs).
• Single management that looked after the technical as well as
the commercial aspects of the business.
Results
• The power struggle and lack of central control continued in the
company..
Wisse Dekker Reorganization, 1982
Goals
• Cost cutting & increase profitability.
• To get rid of bureaucratic culture.
• Focus on core operations.
Actions Taken
Results
• Sales declined and profits remained stagnant.
Vant Der Klugt Reorganization, 1987
Goals
• To regain .top position in consumer electronics market.
• Profitability.
• Gain more control over Nos & PDs.
Actions Taken
• Bifurcation into Core & non core businesses.
• Reduction in head office staff by relocating them to product
divisions.
• Experienced work force posted to most competitive markets.
• Utilization of globally located work force.
• Result oriented R & D.
• Major job cuts to cut cost and for financial recovery
Results
• Company declared losses.
• Vant Der Klugt and management team was repleced.
Jan Timmer, 1990
Goal
• Turn around the bankrupt company, expand software, services &
multimedia to become 40% of revenue
• Restart the growth engines on innovative capabilities
Actions Taken
• Cut more jobs, headcount was reduced by 68000 or 22%
• Change the way of working by committing managers to specific
financial goals and their accountability for the losses
• Recruited Frank Carruba, the director of HP research, to focus on
developing15 core technologies and invested $2.5 billion
Results
• 37% R&D personnel cuts left company with few who understood
technology, thus no innovation
• Morale was low in middle management due to the failure of these
technologies
Cor Boonstra, 1996
Goal
• Production shift to low cost areas, simpler manufacturing and
marketing
Actions Taken
• Sold 1/3 of the businesses, shift production to low-wage countries
• Replaced 21 PDs with 7 divisions and 100 business units
• Moved HQ to Amsterdam, reduced the employees from 4000 to
300
• Increased Marketing efforts
Result
• Performance improved, reaching 24% return on net assets
Gerard Kleisterlee, 2006
Goal
• Increase sales, outsource activities where they can’t add value
• Eliminating more overhead/costly production plants
Actions Taken
• Close non value adding operations, outsource such activities
• Trying to shift to core competencies of technology developer
& global marketer
Results
• Rise in shareholder pressure
• Reported losses
MATSUSHITA
Value Management
Goals
To build a successful company through fairness
and giving back to the world around them
Actions Taken
Opening of “National Shops”,
Various attempts at product line extension, Outsourced production, Licensing
agreements, METC, Worldwide production
Internal competition- One product one division structure
Results
Successful development of efficient, superior VHS
production and good relationships
Toshihoko Yamashita, 1982
Goals
To “help overseas companies develop the innovative
capability and entrepreneurial initiatives”
Actions Taken
Operation Localization: personnel, technology, material and capital
Allow local division to have more control over their operations
Increased number of local nationals in key positions, local division given choice
over products sold, quantities, prices, and features
Results
Overseas productions remained too dependent on
the central organization
Akio Tanii, 1986
Goals
To expand on his predecessor’s initiatives of helping the overseas
subsidiaries become independent and not simply remain
implementing agents of Osaka based product divisions.
Actions Taken
Tried to integrate domestic and overseas operations
Brought foreign subsidiaries under the control of METC and merged METC into the
parent company.
Relocated major regional HQ functions from Japan to US, Europe, and Southeast Asia.
Results
Although the changes generated huge cash reserves,
the overseas divisions were still very dependent.
Yoichi Morishita, 1993
Goals
Cut HQ staff and decentralize responsibility.
Actions Taken
Slogans of simple, small, speedy and strategic.
Moved 6000 staff to operating jobs
Shift of production offshore to low cost Asian countries.
Management unwilling to restructure due to company culture of lifelong employment. Investment in
R&D and technical exchanges.
Results
Resistance within the organization prevented the
promised changes.
Kunio Nakamura, 2000
Goals
Raise profitability to 5% of sales by 2004 , flatten
hierarchy and empower employees.
Actions Taken
All key HQ functions transferred to overseas offices
Destruction and creation program; disbanded basic organizational
product division structure and created multi product production centers.
Results
Company still in deep financial trouble.
Philips Analysis
Decline of success due to the lack of consistency and lack
of ability to deal with a changing competitive international
environment.
Frequent structural changes
No clear strategy since 1960
Struggle to balance the roles of NO’s and PD’s
Conflict in terms of power and responsibilities
Focus on core products led to giving up on various
products
Closure of least efficient plants
Could not manage to produce high-quality, high-
tech products and at a low price