Human Resource Management System Reforms at Matsushita
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Case Details:
Case Code : HROB028
Case Length : 15 Pages
Period : 2001
Pub Date : 2003
Teaching Note :Not Available
Organization : Varied
Industry : Consumer Electronics
Countries : Japan
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"The collapse of lifelong employment in the world's
largest consumer electronics manufacturer shows the company is hell-bent on
surviving cut-throat global competition by urging middle-aged employees to quit
or polish up their skills."
- mdn.mainichi.co.jp1
(2001)
"We must be reborn as a 21st century-style Matsushita. We
have a deep sense of crisis. Signs of hope for an early recovery aren't there."
- Tetsuya Kawakami, Director, Matsushita (www.canoe.ca, July
31, 2001)
Revising the 'Generous' Employment System
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In July 2001, Kunio Nakamura (Nakamura), the President of the world's largest
consumer electronics manufacturer, Matsushita Electric Industrial Company
(Matsushita) of Japan, decided to put an end to the company's policy of 'lifetime employment,' which had been an important part of the Japanese
management philosophy for decades. In September 2001, Matsushita introduced an
early retirement plan and planned to implement it in five major companies2
of the Matsushita group.
This news shocked the Japanese business world, as Matsushita was well known for
its age-old lifetime employment policy. The drastic changes announced by
Nakamura were unheard of in the Japanese business community.
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Moreover, the company also acknowledged that this was the first time it was
asking its employees for an early retirement. Matsushita took pride in never
resorting to lay-offs even during severe recessionary periods that followed
the Second World War in Japan.
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Analysts felt that Matsushita was forced to change
its lifetime employment policy mainly because of a significant
decline in its operating profits in the financial year ending March
31, 1999 and 2000 (Refer Exhibit I) coupled with problems such as
global economic slowdown and Asian currency crisis. They felt that
Matsushita had no other alternative to retain its position but to do
away with its 'generous' employment policy of the company. Nakamura
said, "If every employee over 50 left the company, including myself,
Matsushita would revive instantly."
By December 2001, Matsushita received 10,000 applications from its
employees at five companies. |
Human Resource Management System Reforms at Matsushita
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