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| 1. Ten Companies in One (1) New ten-in-one system takes shape In February 1995, Hitachi shifted to a group system that put the individual operating groups in charge of all aspects of business management from R&D through production and marketing. By increasing group self-sufficiency and market orientation, this system considerably upgraded Hitachi's responsiveness to market changes. But the market revolution moved forward faster than ever imagined. The emergence of "megacompetition" and other new market realities soon underscored the need for even quicker management reflexes. Another weakness of the system was that it did not give the groups enough self-sufficiency to totally eliminate their sense of interdependence. The new system introduced from April brings the group system up to full potential. It reorganizes operations into ten Groups and makes each an essentially independent company that can move flexibly forward with its businesses based on its own decisions at its own responsibility. To ensure this independence, Hitachi simultaneously put in place new company officer and management systems and reorganized the Head Office. By clarifying accountability and speeding up decision-making, these reforms can be expected to make every Group a more formidable competitor in its market. (2) Turning over authority The Groups have been delegated the broad authority they need to make them functional as essentially independent companies. Previously, all important matters were deliberated and decided by the corporate Board of Directors. Most of this power has now been turned over to the Groups. From now on, each Group will make, and be responsible for, substantially all decisions regarding business and product strategies. Each has a President and CEO heading a group management committee composed of newly assigned Administrative Officers. Decision making powers and responsibility for conducting the Group's business rest with the group management committee. In most cases the President & CEO's position at the corporate level is that of a Senior Corporate Officer or Corporate Officer. As persons in these positions are not simultaneously directors responsible for companywide management, they can devote themselves entirely to Group management. Each Group is responsible for managing affiliated companies with related businesses. Group performance will be evaluated on a consolidated basis including these companies. Delegation of broad authority has thus been bundled with strict clarification of responsibility. As the Groups will find it much harder to carry deadwood than in the past, they will have a strong incentive to streamline and consolidate unprofitable operations. |
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WRITTEN BY Secretary's Office
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