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FAQ :: Regarding New Management System

Q What has changed?

A The authority of the individual Groups has been markedly increased. Each Group can now take charge of all aspects of management, even financial planning, just like an independent company. In line with this, the corporate-level decision making process and the organization and role of the Head Office were drastically simplified. In combination, these changes sharply define who is responsible for what.

Q How will you gauge a Group's performance?

A Basically based on accounting indicators like profitability - return on assets over a fixed period, for instance - growth, improvement, and goal achievement. Consideration will also be given to customer satisfaction, foresight as reflected by investment and R&D planning, and contribution to the community.

Q How will the new company officer system change things?

A We've drawn a sharp line between the Board Directors responsible for making corporate-level decisions and the Senior Corporate Officers and Corporate Officers responsible for conducting the business of the individual Groups. Each Director's job is now limited to some aspect of corporate-level management. This allows the Directors to devote themselves to management from the companywide perspective at a level above the ups and downs of the individual businesses. It also helps to sharpen the focus of Board meeting discussions. On the other hand, the Senior Corporate Officers and Corporate Officers can concentrate totally on Group management. The level of the new Senior Corporate Officer and Corporate Officer positions more or less corresponds to that of the Executive Managing Director and Board Director positions under the old system, though the difference between the old and new systems makes an exact comparison impossible.

Q In some cases a President & CEO is also a Senior Vice President. Why is that?


A Groups engaged in exceptionally large-scale businesses, like Power & Industrial Systems, Information & Telecommunication Systems and Semiconductor and Integrated Circuits, strongly affect the whole company. They also provide technical information that is indispensable to businesses throughout Hitachi. So they were put under a Board Director with corporate-level responsibilities.

Q Where do the Administrative Officers stand?

A They are selected by the Board of Directors to take charge of general, marketing and R&D management at the individual groups. You could call them Group board members. At this point, most were chosen from among Senior Corporate Officers and Corporate Officers.

Q How will the roles of the R&D division and the laboratories change? What evaluation standards will apply?


A Our seven laboratories have been placed under the newly established Research & Development Division, which is to coordinate all R&D activities in line with a companywide strategy. The R&D sector will be treated as a single Group expected to strive for higher efficiency and effectiveness. As with the other Groups, R&D Group performance will also be judged based on specific criteria. Though these are still under study, the main items will be contribution to development of new products that support company growth, accrual of patents and other intellectual properties, achievement of technology development goals, customer satisfaction, environmental protection, global standardization activities, and overall contribution to science and technology.

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