Later On

A blog written for those whose interests more or less match mine.

It took Toshiba 70 years to reach its peak—and just a decade to fall into an abyss

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Josh Horwitz has a fascinating article on Toshiba’s rise and fall. From the article:

A 334-page report by an investigation committee set up by Toshiba stated that Nishida at times encouraged accountants to fudge the numbers. In January 2009, when an employee told Nishida the PC division would incur an operating profit loss of ¥18 billion (about $203 million then) over a six-month period, Nishida demanded an “improvement” in profit of ¥10 billion, lest the unit face closure. “Do all that you can as if your life depends on it,” Nishida reportedly told subordinates (pdf, p. 245).

While the scandal didn’t lead directly to Toshiba’s downfall, it exposed deeper problems at the company, shared by many tech conglomerates in Japan. Managers accustomed to beating out the competition were afraid to deliver bad news to the leadership, who didn’t want to hear it in the first place. As a consequence, this culture stifled Toshiba’s ability to innovate, at a time when it badly needed to. (Toshiba declined an interview request for this story.)

Professor Ulrike Schaede, who researches Japanese conglomerates at the University of California, San Diego, described Toshiba and its ilk as “full of yes men that do things because they think the boss wants them to do it, rather than what they think is a good idea or the right thing to do.” As a result, “everyone’s moving in lockstep in the direction of the bosses, and you don’t get any new ideas.”

Sound familiar?

Written by LeisureGuy

29 April 2017 at 8:00 pm

Posted in Business

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