Philip's vs. Matsushita Assignment Example | Topics and Well Written Essays - 2750 words

Philip's vs. Matsushita - Assignment Example remained poor and its global competitiveness are was still a question (Bartlett, 2006, p. 1). Philips case study highlights following important factors that contribute its poor performance over three decades. Unbalance and undefined power shearing between PDs and NOs. Lack of effective restructuring. Lack of well defined performance criterion. Fragmented organizational structure. Matsushita Matsushita is a key manufacturer over a verity of consumer appliances and products having world wide manufacturing facilities. Initially started as a modest home based manufacturing facility making double-ended electrical sockets, in 1918 by Konosuke Matsushita, a 23-year-old inspector at Osaka Electric Light Company, Matsushita has evolved as a versatile consumer appliances and products manufacturer with a wide retail and marketing network across the globe. It manufactures a broad line of 5,000 products including video and audio equipments, home appliance and house hold equipments, information, communication and industrial related equipments, power backup and electronics equipment (Exhibit 7, p. 20) (Bartlett, 2006, p. 20). Matsushita total sales has attained a figure of US $68.862 million with net income of US $ 941 million for fiscal 2000 (Exhibit 6, p.19) (Bartlett, 2006, p. 19). Since the announcement of Konosuke Matsushita 250-year corporate plan on May 5, 1932, Matsushita has been facing difficulties and struggling in capability building and re-establishing its competitiveness. Matsushita case study reveals following important reasons that contribute toward these difficulties (Bartlett, 2006, p.8-12). During 1933-50 period, Matsushita followed a centralized leveraged technology strategy. Also, central research... To have a strong operating control over their offshore production units, Matsushita had followed the centralized management policy before the 1980s. In the mid-1980s, Matsushita had over 700 expatriate Japanese managers and technicians on foreign assignment for four to eight years. Local managers were only made responsible for achieving the targets. In 1982, as Toshihiko Yamashita took over the charge as President of the company. He launched his â€Å"Operation Localization† ‘to boost offshore production from less than 10% of value-added to 25%, or half of overseas sales, by 1990. To support the target, he set out a program of four localizations-personnel, technology, material, and capital (Bartlett, 2006, pp. 11-12). Toshihiko Yamashita’s â€Å"Operation Localization† policy brought a reasonable change to Matsushita organization structure and it increased the number of local nationals in key positions. In the United States, for example, US. nationals became the presidents of three of the six local companies, while in Taiwan the majority of production divisions were replaced by Chinese managers. But unfortunately, these local staff did not have direct contact with the senior administrative body and they were not free in their decisions. They were directed and advised by senior Japanese advisors, who had a direct link with Matsushita’s parent management team. Toshihiko Yamashita policies also gave the offshore production subsidiaries to some extent to buy minor parts from local vendors as long as quality could be assured.